Thursday, July 22, 2010

Strategic Planning Analogy #340: The Box vs. The Contents

A short time ago, I bought a fancy new water dish for our cats. It came with an electric pump. The pump pushed the water up over the outside of an inverted bowl. The cats were then supposed to lick the water as it ran down the bowl.

The manufacturer claimed that cats would love this fancy device. After all, cats are supposed to prefer gurgling running water over still water. In addition, this fancy device increased the levels of oxygen in the water, which is supposed to make it tastier.

I assembled the fancy water dispenser and waited for the cats to show their loving approval by instantly licking the water off the inverted bowl. Instead, I found one of the cats crawling into the box the product came in and playing with the cardboard flaps on the top of the box.

Apparently, the box was more interesting to the cat than its contents.

This experience with my cats should be familiar to anyone who has given gifts to small children. Quite often, they find the gift box to have greater play value than the toy that came in the box.

I have seen many parents get upset when the expensive toy is tossed aside as preference is given to the cheap box. But I say so what if the box is getting more attention than the contents. The child is happy and having fun. Isn’t that they whole point of giving in the first place?

Many business people also find themselves like those gift givers. They struggle mightily to create a superior product that their customers are supposed to love and then are disappointed when the product is ignored because the consumers are more interested in something deemed by the manufacturers as “superficial.”

“What’s the matter with these stupid customers?” they may ask. “Don’t they realize that my product is superior? Why are they distracted by these superficial things?”

My response? If something other than the actual product is what is making the customer happy, then perhaps you should be paying attention to more than just the product. Consider the entire package when developing your strategy. The whole idea is to make the customer happy, and if happiness comes from something other than the product itself, then that’s okay…just figure out a way to win on these non-product attributes.

The principle here has to do with recognizing the difference between a focus on the product and a focus on the customer experience. A focus on the product tends to be internally oriented—a focus on what I do to make the product superior. A focus on customer experience is externally oriented—a focus on how the customer interacts with the product. If you focus on the customer experience, you may find that the customer is not looking for ultimate product superiority. What they want is a better total experience, and that can only be improved by looking attributes external to the product.

For example, consider bleach. The purpose of bleach is to cleanse and disinfect. Therefore, one might think that to make customers happy, one should focus on making superior bleach—one that is the absolute best at cleaning and disinfecting.

The problem is this…it is difficult to make any one formulation of bleach meaningfully superior at cleaning and disinfecting. They all perform pretty much the same.

So what did Clorox do? They focused on the packaging. They created a unique spout on the top of their bleach bottle which reduced splashing. This made it easier to pour the bleach and less likely that any of the bleach would accidentally spill onto the person doing the pouring. Like in the story, they focused on the box (the bottle) rather than the contents (the bleach).

From a consumer experience perspective, this was a huge benefit. If bleach accidentally spills on a user, it can ruin the clothes they are wearing. By reducing the risk of ruining clothes being worn, Clorox made a superior user experience. Even though Clorox did nothing to improve the performance of the product (the bleach), they made the customer happier. And isn’t that the point?

I was working on a project one time to try to do some business in Mexico. During my conversations with one of the Mexicans, he made the following comment. “I don’t understand you Americans. Here in Mexico, we consider Corona to be one of the lowest quality, poorest tasting beers available. Yet, Corona is the beer you Americans decided to import, and you treat it like it is a premiere, high quality product. And by the way, everyone knows that the US has higher quality water than Mexico. So why are you importing beer, which is mostly water, from a place known for having inferior water?”

The problem with my Mexican friend’s logic was that he was product focused. He assumed that superior sales should go to superior products. He saw Corona as an inferior beer product. First, it came from a nation with inferior water and second, among other beers using that same water, it was considered by locals to have an inferior taste.

Here in the US, however, the major concern was not the quality of the liquid in the beer bottle, but the experience the customer had when holding that Corona bottle. Shortly after the conversation with my Mexican friend, I was on a camping trip in the US. On the campsite next to mine, a group of status-conscious Yuppies set up for the night. It’s hard to say they were “camping” because they brought all the creature comforts of their city life with them, including large propane street lights.

They decided they were going to have a party all night (which made it hard for my family to be camping next door). Everything about their party broadcast to the world their attachment to anything regarding status consciousness, including the way they dressed, the way they talked and the way they acted. And, as part of this status conscious behavior, they only beer they had was Corona.

To these Yuppie “campers,” it was almost irrelevant how the Corona tasted. It was just one more prop to enhance they experience of status-conscious lifestyle (and a darn good prop at that). Crown Imports, the firm that imports Corona to the US, apparently understood the importance of the packaging over the contents. They spent their time positioning Corona as the perfect beer for the status-conscious beer drinker. At the time they introduced the US to the beer, it was uniquely positioned as the beer where you put a lime wedge in the mouth of the bottle (how’s that for unique status packaging?).

There are lots of ways to improve the consumer experience that have nothing to do with the quality of the product itself. You can make the product easier to use through packaging (like Clorox). You can package the product inside better customer service (see this blog on gravel). You can connect the use of the product to charitable or social causes (see this blog on Toms shoes). You can improve convenience through the choice of delivery schedules or distribution channels. You can imbue the product with a status appearance (like Corona). You can take the same contents and customize them through packaging for different end users (consider Tide to Go stick versus Swash Get it Out stick).

You can position the product to be more fun to use (like McDonald’s Happy Meal packaging around a regular hamburger). Having watched how some kids “consume” a Happy Meal, this is a true case where the contents (the food) are often thrown away and the packaging (box and toy) is what is really enjoyed. This is very much like the story of my cat and the box.

So What have we Learned?

1) Don’t Just Focus on the Product
I’ve seen many business people get overly focused on the product and ignore almost everything else. The strategic emphasis is only on those internal product issues—improving production, improving quality. This is the “est” strategy. If I can only make my product the big-est, fast-est, cheap-est, strong-est, or some other “est,” then I am all set.

Unfortunately, the winner is often someone whose product is merely “good enough” but is packaged in a superior way.

I’m not saying to ignore the product. Product functionality must surpass certain minimum thresholds. But obsessing on complete product superiority to the exclusion of all the other factors important to the consumer is a mistake.

If you must focus only on the product, then define the product broadly, to include the packaging, the positioning, the image, the service behind the product, and so on. This is where key strategic choices can really make or break your business.

2) Focus on the Customer
Products must be seen within a context. That context is the way in which the customer will interact with that product. Improving that experience is more important than just improving the product. The goal of customers is not to make your production manager happy. It is to make themselves happy. And that happiness comes from having happy experiences. The more you can package your contents to accommodate and reinforce happy experiences, the better off you are—even if the actual functionality of the contents in that package are merely “good enough.”

If you want to focus on functionality, look at the functionality of the customer rather than the product. Are the customers functioning at a higher level of satisfaction (which could be rational or emotional)? If not, what can I modify in the entire package to improve their functionality?

Winning strategies look beyond merely seeking superiority in product function. They look at the entire package surrounding the product to ensure that the company is superior at creating consumer experiences with the product. These superior solutions may have little to do with the actual contents of your product and more to do with how it is packaged.

Don’t be upset if your customers act like my cat and ignore the product in favor of its box, so long as they are satisfied. And maybe you should spend more time on making your “box” more enjoyable.


  1. Gerald,
    I want to ask you a question, if you may. When you write these thorough posts do you think of your customer (the reader). Or, does it come by naturally. Your posts are customer-oriented and I wonder how much deliberate effort you make to make them so?

  2. Ali,

    I'm a firm believer that if I'm going to try to get someone to read something as long as my blog (which is huge in size relative to Twitter or most other blog entries), I should make it worth taking the time to read.

    Therefore, I try to make it both entertaining and practical--including both theory and examples to bring it to life. That makes it a fruitful use of the reader's time.

    I know of a famous pastor who used to complain about other pasters who preached short little sermon-ettes. He said that seronettes are for Christian-ettes. He said that he wanted his congregation to be a full-fledged Christians, so he preached full-length sermons.

    I feel the same and do not want Strategic Planner-ettes, so I don't do blog-ettes.

  3. Gerald – Yet another great post! You bring up an important - yet often overlooked aspect of marketing – the experience based mindset (long lasting functional experience, brand equity, emotional equity etc.). For example, we all have heard this definition from Theodore Levitt, "consumers don't want to buy a quarter-inch drill. They want a quarter-inch hole!” I am sure the same definition applies to all consumer goods – as consumers rent those goods for a job to be done – and I would perhaps even go one more step - and say - consumers are renting the product for not “just the average job to be done” – but rather – for the “best experience filled job” to be done.

    What does that mean from marketing standpoint? For example – while increasing the market share for a product - say - smoothies/milk shake. The conventional wisdom will ask us to slice the market segment by product—and then segment it further by profiling the demographic characteristics of those consumers who frequently bought smoothies/milk shakes- their volume, dollar spent and finally we might invite few sample consumers to do a product testing - whether it needs to be thicker, more cheaper, or flavorful etc. While all of this tactics are all very much valid and a place to do -the problem with this approach is that it is very product/quantitative analytics focused and does not take in to account the qualitative/experience dimension. The better approach is – on top of the conventional segmentation approach – we also must do consumers behavior analysis and solve for the following: when or what day part they consume it? Why or what experience moments they want to fulfill (taste, flavor, H&W, nourishment etc)? What experience moments we have missed? Where do they consume it (at home, on road or driving etc)? And few more…

    As it turns out – solving for this qualitative experience dimension will help us to come up smoothie/milk shake experience in three key experience dimensions – Relevance, Access and Value. Relevance part will address the taste, nourishment etc - whereas the Access part will help us to come up with different packaging (as it happened in your cat story) or channel options (may be moving product closer to consumption etc) as part of this holistic experience equation. Value dimension - on the other hand will help us to come up with multiple brand strategies very much like how P&G came up with Tide in different value propositions (basic and regular.

    To get to this experience dimension mindset – in my opinion, companies can consider doing the following -

    • First and foremost - Change the product mindset to “job to be done” mindset and then to “best experience based job to be done” mindset as you have alluded.
    • Transform the static product portfolios to experience portfolios.
    • Explore ways to sell static products as dynamic service and/or experience enabled bundles – very similar to the emerging “product as service” concept that is popular in some industries.

    By understanding this best experience based job to be done mindset in social, functional, and emotional dimensions – marketers can be rest assured that they would gain share – not just in their like-by-like competitors (i.e. smoothie/milkshake) – but also in the adjacent experience categories (say like breakfast) – that might be fulfilled by other products like coffee, bananas, doughnuts, and bagels etc. which again reinforces my earlier experience portfolio point. The key lesson here is that experience based Job-defined market segments are generally much larger and longer lasting than product category-defined markets. A great lesson for Marketers indeed!

    Sorry my comment went little longer this time - as this is one of my favorite and passionate topics. As always – you have done a wonderful job in coming up with yet other high impact topic. Keep it going Gerald…


  4. This short/full length sermon metaphor reminds me of the milk/meat metaphor which also happen to have a scriptural origin - milk relates to basic insight or teaching, and meat to the deeper insights or teaching.

    Gerald – to your point – I guess followers of your blog are mature readers and so you give them meaty messages or full length blogs as opposed to the milk or short basic messages that are common elsewhere. The next question is who defines short blogs as "milk" and long blog as "meat". I am not trying to define it here either. Rather, "milk or meat" is generally used to indicate the relative nature of insights or discussion. The meatier the insight – it needs more explanation in terms of metaphors, analogy and stories to get the message across - and so Gerald’s blog end up being larger in size.

    To Ali annani’s point – I can perhaps speak for myself as well – While I definitely think about my readers – like Gerald - I also sometimes get carried away with my thoughts and so they end up being bigger.

    At the end – it does not matter whether it is short (milky) or long (meaty) – the answer I guess is balanced moderation – as long the blog gives us value –add insights, I don’t mind whether it is small (milk) or big (meat).