Saturday, April 24, 2010

Successful Innovative Companies: Volume 22

The Successful Innovative Company of the week is: The Gillette Company!
What they do right: They invented the razors and blades business model (also known as the bait and hook). Gillette is very good about sending new 18 year olds the handle to a razor and a few blades. They motivated me to buy many blades and even a new handle after I lost my first one. Now I've lost that one and a third that my dad gave me...

In the jet engine industry they say they could give away the engines and make money just selling the blades. In the razor industry they actually do it. As far as making the best razor blades I really have not tired other companies (except for disposable 1-2 blade razors) so I can not say. I can say that I have always been pleased with Gillette razors.

If a business model can be traced to one person or one company they get a nod for innovation. There are only a handful of business models, maybe 25. That's about how many people have climbed the 14 highest mountains in the world. About twice as many people as have walked on the moon. Far more people have been president of the US (a young country).

What they could improve: targeted marketing. Sending out razors I will not complain about at all. However, commercials and advertising in mature men's magazines may not be the most effective. Companies have known for a long time that targeting the young people to build customer loyalty is a winning strategy. Cigarette companies have kind of had a bad rap on that. McDonalds hasn't had such a nice reputation either for feeding calories to kids. Shaving on the other hand, I say target the teens! Get the boys while they are young like Gillette did with me so that I inevitably ended up buying $30 of their stuff. So they aren't bad, but I think they could do better.

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