SUNDAY, NOVEMBER 14, 2010
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G5 How innovators can draw from Lasker, Jobs playbooks innovation from G1 Let’s imagine an example that’s
not too far removedfromreality. Say you’re watching late-night
TV tonight, and an ad comes on offering you your own personal DNA map. The excited voice-over wouldgosomethinglikethis: “No- bel Prize winner and DNA-decod- er genius James Watson got his personal DNAmap in 2007—the first ever! The cost: amillion dol- lars. Your price?Only $19.95, plus shipping andhandling!” So:Doyouturnover your credit
cardnumber? Before youdo that, letme intro-
duce Albert Lasker, a man who could sell a revolution like no one beforehim—orperhaps since. Although Lasker has been
largely forgotten by all but adver- tising buffs andmedical research- ers hoping to win the prestigious LaskerPrize,heandhiscolleagues at theLord&Thomasagencywere responsible in the first three de- cadesof the20thcenturyforintro- ducing an astonishing array of products that we take for granted today — from orange juice to toothpaste, all-weather tires to sanitary napkins and disposable handkerchiefs. I thought of Lasker in recent
weeks as I’ve fumbled with my new iPad — the latest gee-whiz device from Steve Jobs and the gang atApple.The iPadwas intro- duced in January to great fanfare. By July, something like 3.3million had been sold, and in the follow- ing quarter, an additional 4.2mil- lion. Itmay be only the beginning of a technological tsunami: One analyst predicts that 28 million iPadswill be sold in 2011 and that iPad app sales alone will consti- tute a$1 billionbusiness by 2012. Inthemiddleofmy fumbling, it
struck me that despite the enor- mous differences between their characters and circumstances — Lasker the formal, proper, but- toned-down and intensely private advertising executive who flour- ished in another age; Jobs the uber-cool, aggressively informal andhighlyvisibletechnologyguru who is shaping ourmodernworld — they faced similar challenges and opportunities. Both lived through periods of incredible technological innovation. Both figured out how to bring a mass marketalongfor the ride. Ifweare indeed on the verge of yet another riot of innovation, what can we learn from the Lasker and Jobs
JUSTIN SULLIVAN/GETTY IMAGES
AppleCEOSteve Jobs and Lasker have faced similar challenges and opportunities.
LIBRARY OF CONGRESS
Albert Lasker, left, returned to his advertising agency after Edward P. Farley succeeded him as chairman of theU.S. Shipping Board in 1923. playbooks?
Hype and hoopla Thefirst thingis that itall starts
withtheproduct.Hypeis just that: hype.With the exception of short- lived novelty items — Pet Rocks and the like—no amount of hype and hoopla can make up for a junky product. Most people have forgotten that Apple introduced its first handheld device back in 1993: the woefully bad Newton, which was about the size of a hard-bound Stephen King novel (big!)andhadtrulypathetichand- writing-recognition software — supposedly its biggest selling point. The Newton sank like a stone. The iPad, by contrast, is a great
product. According to a study re- leasedinSeptemberby theAmeri- can Consumer Satisfaction Index, the iPad had the highest consum-
er-satisfaction scores ever record- ed.
When the iPadwas announced,
therewas a short-lived controver- sy about the new product’s name. In cyberspace, women cringed. “Did Apple merge with Kotex?” askedone tweeter. Laskerwould have been hugely
amused. In 1922, he took on the advertising of the original Kotex. Itwas a challenge, to say the least. Wood-products giant Kimberly- Clark had invented a cotton sub- stitute in 1915, and enterprising Army nurses on the front lines of World War I had discovered that “cellucotton” served as an excel- lent rawmaterial for a homemade sanitary napkin. When the war ended and there were no more wounds to dress, Kimberly-Clark needed a newmarket for cellucot- ton.The company seizeduponthe nurses’ discovery and beganmar-
keting a new product called “Ko- tex.” There were enormous obsta-
cles.First, theproductwas revolu- tionary. People didn’t immediate- ly understand it. Second, you couldn’t talk about it or its pur- pose. The all-powerful Edward Bok — publisher of the Ladies’ Home Journal and other leading magazines — didn’t allow the word “menstruation” in his publi- cations; he certainly wasn’t going to approve ads for Kotex. Third, the retailing channels of that day weren’t congenial to the market- ing of a new and unmentionable product. Self-service hadn’t yet beendiscovered,andmostwomen simply weren’t willing to walk up tothemalepharmacistbehindthe counter andask forKotex. Lasker energetically tackled all
of these obstacles. On a visit to Bok’s Philadelphia office, he per-
Juicing demand for an obscure fruit In the early years of the 20th
century, California’s orange grow- ers facedadouble-edgedproblem: ever-increasing production and flat demand. This gave them a weakbargainingpositionwiththe Southern Pacific railroad, and en- sured years of low — or no — profitability. After a false start in 1904, the
California Fruit Growers Ex- change hired ad agency Lord & Thomas in 1907 to try and pump up demand for oranges. This wasn’t easy. Most Americans didn’t know much about citrus fruits, and certainly didn’t know the difference between California and Florida oranges. CFGE con- sistedof about 2,000fiercely inde- pendent growers, each with their own brand. What, exactly, could admanAlbertLasker sell? The first answer lay in a brand.
Lord & Thomas proposed that all the growers in the CFGE collabor- ative subordinate their separate brands to a single, unified brand: Sunkist. It was a made-up word that lent itself to both marketing andtrademarking.
The second answer lay in gim-
micks suchaspremiums.Onepro- motion involving spoons was so successful that CFGE became the biggest seller of flatware in the world. The third answer lay inthe pro-
motion of a “revolutionary” new product: the juice of anorange.By teaching consumers how to squeeze juice from oranges, and by providing different kinds of juicers for that purpose, Lasker created a newuse for oranges that increased the fruit’s consumption per serving in the United States from half an orange to between two andthree oranges. Lord & Thomas subsequently
didthe same for raisins—pushing the Sun-Maid brand — and lem- ons—selling lemon pie, lemon in tea, lemon garnishes and lemon juice as ahair rinse. In a consumer revolution — as
Lasker well understood — the challenge lies as much in educa- tionas inpersuasion. —JeffreyL.Cruikshank
With the exception of short-lived novelty items— Pet Rocks and the like—no amount of hype and hoopla can make up for a junky product.
suaded the publisher to invite his secretary in to read the copy of a proposed Kotex ad. “If she’s em- barrassedor repelledbyit,”Lasker promised, “I’ll accept your judg- ment.” The secretary — a digni- fied, white-haired woman in her early 60s, read the copy. “Why,Mr. Bok, this isawonderful thing,” she exclaimed, halfway through Lask- er’s copy. “I certainly think we should run this in the Journal. Women deserve to be told about it.”
On the retail front, Lasker
seized upon an idea developed by a Wisconsin druggist: a counter display of double-wrapped Kotex boxes stacked in a pyramidwith a signat thebottom: “Kotex—takea box—65 cents.” Itworked. So did his scheme to install Kotex vend- ing machines in women’s rest- rooms across the country.
Margin formarket share AsecondthingthatbothLasker
andJobswouldsayaboutarevolu- tionary new product is that you’d better plan to trade margin for market share. The Newton cost $700 in 1993—just over $1,000 in today’s dollar, and a lot of money for a baffling product. Jobs, then in exile from Apple (a long and messy story, all by itself ), scoffed at thatpricepoint. “They’re going to have trouble
getting the volumeup,”he toldthe New York Times. He told another interviewer that the only way for Apple — then foundering — to save itself was to get back to its original vision as a company that sold “appliances” to the largest number of people possible, mak- ing reasonable profits and build- ingmarket share. Of course, this is goodmedicine
foranyproduct,but it’sparticular- ly true when you’re selling a revo- lution. Apple purposefully set the iPad price point low($499 for the base model) to make it easy for people to take a plunge into the unknown. Kimberly-Clark had the great
advantage of having no competi- tors in those early days, and — withaproduct thatsomethinglike half the people in theworld need- ed — it certainly could have en- gagedinsomemonopolisticprice- gouging. But Lasker, who had been granted a block of stock in the company and, therefore, felt proprietary about it, consistently arguedfor lowpricepoints so that “his” company could dominate the sanitary-napkinmarket. Again, the strategy worked.
Eventhoughthe formidable John- son & Johnson entered that mar- ket in 1926, Kimberly-Clark con- trolled about 70 percent of the market throughout the 1920s.
A reasonwhy A third thing that Lasker and
LEFT, ASSOCIATED PRESS; RIGHT, AMERICAN STOCK/GETTY IMAGES
An advertisement, left, for Sunkist “California Oranges, best for juice and every use,” published in the Saturday Evening Post in 1949.Model Lucille Laverne, above, demonstrates the Sunkist juice extractor in 1925.
Jobs would agree on is that you havetogivethemareasonwhy.On this score, Lasker had the easier time of it: As soon as women learned about Kotex, they knew why theywanted the product.His ads stressed convenience, afford- ability, ease of use, product hy- giene andavailability. Jobs,bycontrast,hadtoexplain
why the world needed something that sat somewhere between his phenomenally successful iPhones and his resurgent laptop line. If there is such a “third category,” Jobs told ameeting of the faithful inlateJanuary, theproduct inthat category had to be better than
either of its older siblings at all kinds of everyday applications — Web browsing; e-mailing; photo viewing; enjoying videos andmu- sic, games ande-books. It’s like “holding the Internet in
your hands,” he told the crowd, cuddling the 1.5-pound device in his arms. “It’s so much more inti- mate than a laptop, and so much more capable than a smart phone.” Then he spent 20 near- flawless minutes showing exactly what thisnewthingdid. Jobs andhis colleaguesdecided
tomake a virtue of the iPad’s nov- elty by invoking the idea of “mag- ic.” This is a “truly magical and revolutionary product,” Jobs told the crowdinJanuary. Inthe eight- minute product-launchvideo that followed, Jony Ive, Apple’s senior vice president for industrial de- sign, carried the theme forward: “When something exceeds your ability to understand how it works, it sort of becomesmagical. Andthat’s exactlywhat the iPadis. It’s hard to see how something so simple, so thin and so light could possibly be so capable.”
Healthy dose of evolution Finally, both Lasker and Jobs
wouldsubscribe tothenotionthat the revolution will gomore easily if it includes a healthy dose of evolution.Apple tookgreat care to make the iPad fit into the sleek family style of all of its products, and it stresses the continuity be- tweentheiPhoneandiPad(inpart by using the same App Store for both). Of course, Lasker had no precedents to invoke in the mar- keting of Kotex; butwhen it came time to introduce the next revolu- tionarycellucotton-basedproduct for Kimberly-Clark, that new product — a disposable handker- chief called “Kleenex”—was pur- posefully positioned to draw on thehalo effect of its older sibling. Tobehonest, Ihadno intention
of buying an iPad. My MacBook Pro is super-powerful—dual Intel processors in a reasonably com- pactandlightpackage; thankyou, Gordon Moore — and reasonably portable. It hooks up to an Apple cinemadisplay inmyoffice,giving me about three acres of high-reso- lution screen space. Meanwhile, my BlackBerry does fine in its primaryroleof tetheringmetomy various work and family obliga- tions, although I’m constantly aware that having the eyes of an eagle and thumbs that came to a point would be hugely helpful for BlackBerrying. Sowhy did I buy an iPad?Well,
yeah, there was a good business reason to do so (a clientwas ready to be wowed by an iPad-based presentation). But more impor- tant:As I stood at the iPad display table at anApple Store on a Satur- day afternoon, watching adults fumble and kids dive effortlessly into theworld of iPad-based gam- ing, I realizedthat Iwas looking at a technological revolution — one that might well make my laptop and my BlackBerry obsolete. Don’t start the revolutionwithout me! And by theway: Assuming that
you’re near a wireless hotspot or you get the 3Gmodel, you can use your iPad to go online and buy a genetic predisposition kit — in- cluding pre- and post-test “per- sonal counseling” — for less than $400. So:Doyouturnover your credit
cardnumber?
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