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A missed prediction 

21 March 05

Last year, on January 26, 2004, I reviewed the innovation effectiveness of Gillette’s new M3 Power vibrating razor and gave it a thumbs-down.  This is what the product looks like, and how it maps onto the 4 factor diagram:  

Based on this mapping, I predicted that the product wouldn’t succeed in the mass market.  Here’s part of what I wrote:

“The results of the four factor model make me doubt that this product will be a winner for Gillette.

“My concern comes from the mismatch between size of market and motivation to buy. The M3 Power is a specialty product. Gillette will have a hard time selling the Ferrari of its product line to the mass market.”

It turns out I was wrong.

On March 10, 2005, I heard Eric Kraus, the VP of Corporate Communications for Gillette, discuss the launch and success of the Gillette M3 Power.  According to Mr. Kraus, the M3 Power is now the number 1 selling razor in the UK, France, US, and Germany. 

While Gillette does not release sales and profit figures for the M3 Power alone, the total company had an excellent year in 2004.  Gillette sales grew 13 percent from December 2003 to December 2004.  Its per-share earnings rose 24 percent, and its net margin improved as well.  On 28 January, 2005, Gillette agreed to be acquired by Procter & Gamble at a premium of 18 percent over its pre-announcement share price.

The M3 Power contributed significantly to Gillette’s overall performance.  It did what successful innovations are supposed to do – it grew sales and profits, and pre-empted competition.

Yet my interpretation of the four factor analysis of the product did not indicate a success.  What went wrong?

One clue came from listening to Mr. Kraus’ very compelling presentation (there’s a reason why he’s in charge of corporate communications).  It turns out that many men, especially in that crucial 18-34 age group, are very interested in the closeness of their shaves.  Many women are also very interested in the closeness of men’s shaves, and women buy more than 30% of men’s shaving products.

There was a mismatch between my assessment of the market’s interest and what that interest actually was.  Razor innovation does not hold much strong personal appeal for me, and I made the classic innovation error of “mistaking myself for the market.” 

Even after the introduction of two-bladed, three-bladed, and four-bladed razors, many men are still not satisfied with the quality of their shaves.  A significant number will pay higher prices for the promise of a better shave.

Gillette knows this; I did not.  With a little help from Johnny Damon, Gillette’s M3 Power proved to be a winner.

Boston Red Sox hero Johnny Damon

Shaving off his beard

(Note the background)

More Information:

1. My 2004 update on Gillette’s M3 Power: http://www.biz-architect.com/gillette_m3_power.htm

2. Thanks to Schneider & Associates for inviting me to the Gillette presentation.  Here’s a link to their web site on successful product launch: http://www.schneiderpr.com/

3. Four factor model explanation: http://hbswk.hbs.edu/item.jhtml?id=4378&t=strategy&nl=y

4. Here’s a piece I wrote on the innovation problem of “mistaking yourself for the market:” http://www.biz-architect.com/mistaking_yourself_for_the_market.htm

5. Red Sox 2005 season schedule: http://boston.redsox.mlb.com/NASApp/mlb/bos/schedule/tentative_2005_season_schedule.jsp

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