Learning to Succeed on the Job

Pharmaceutical ExecutivePharmaceutical Executive-10-01-2010
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Innovating in R&D may not be such a complicated task. Consumers simply want to find the product that gets a job done right every time

"The consumer rarely buys what the business thinks it sells him," is one of management guru Peter Drucker's most resonant insights. The story of Mucinex, an over-the-counter medication and one of the greatest successes in consumer marketing history, demonstrates the immense value of understanding what the consumer really wants and selling her something that actually fulfills that purpose.

Greg Beasley

When a grumpy consumer with a cold walks into a pharmacy, she has a need that must be fulfilled: to help her feel better quickly and effectively, as safely as possible. But the overwhelmingly massive wall of over-the-counter products she encounters offers little relief and more likely adds to her anguish. It is a classic example of product proliferation—a blurred mass of largely undifferentiated products touting variations such as drowsy versus non-drowsy, cold and flu versus allergy, and regular versus extra-strength. The result is 39 varieties of Tylenol alone.

Dr. Jason Hwang

It is simple to understand how this situation arose. Over-the-counter product managers are asked to "innovate," which in most cases means creating a slightly different recipe from a short list of generic ingredients and adding a little flash to the packaging in the hope of stealing market share away from competing products. This game of "I win only if you lose" carves up existing markets into ever-diminishing slices.

Meanwhile, in order to grow existing markets or find new ones, the same managers rely upon data from corporate IT centers and market research firms that generate sales forecasts with tremendous precision, but whose reports and conclusions refer to demographic categories that have great meaning to marketers and little relevance to consumers.

The so-called "heat maps" that result from these marketing forecasts are intended to reveal underserved or faster-growing categories of consumers. But they generate more heat than light. A consumer's buying process has nothing to do with the easily-defined and observable demographics and product type categories typically used by marketers. The consumer doesn't want to decide between fast-acting gelcaps and long-acting capsules—she wants to feel better.

The massive wall of OTC products a consumer encounters at the drug store can be overwhelming. A little packaging flash goes a long way in helping to steal market share.

On the other hand, understanding the consumer's "job to be done" offers companies a much differentperspective. The blockbuster cold and flu remedy Mucinex, developed byAdams Laboratories and later acquired by Reckitt Benckiser, created a sensation by offering a product that focused on a very specific job shared by many sick consumers—getting rid of excess mucus. The average consumer doesn't care about what caused the mucus, where the mucus is coming from, or what the active ingredient is; she just wants the mucus to go away. Without a doctor's visit and some tests, the consumer wouldn't even reliably know the answers to these questions. Why confront her with choices requiring knowledge she doesn't have?

Mucinex is now the brand of choice for many consumers seeking to "hire" a product to remove mucus, and it crosses multiple traditional product families in doing so. With a memorable marketing campaign and straightforward tagline ("Mucinex In…Mucus Out"), Mucinex SE was launched in July 2002 by Adams, and sales of Mucinex products grew dramatically to reach $254.7 million in 2007. Mucinex represented 77 percent of Adams's total revenue before the company was acquired by Reckitt Benckiser for $2.3 billion (10 years after it was founded). According to Rob deGroot, Reckitt's Executive Vice President for North America, "Despite being No. 1 in the market right now, it has only reached 25 percent of the consumers that it can reach" and has plenty of room to grow.

A remarkable fact to keep in mind is that guaifenesin, the expectorant found in all Mucinex formulations, is also the active ingredient in most other cough medicines. Success for Mucinex is almost entirely the result of offering to do the right job for the customer, not millions of dollars and years of investment in new R&D.

What are the benefits that a "jobs" insight brings to pharmaceutical innovation? Key points:

» Segmenting consumers by meaningless categories will produce meaningless outcomes. Think about the jobs consumers want done, not just who they are. Analyze how they are currently hiring products for a job, and position your product so that it can get an interview. Persuasive evidence across industries indicates that products designed to do a job perform better than those attempting to fill a niche.

» Proliferation is not creation. By widely shared estimates, more than half of all new products fail. Drug companies may yearn for more shelf exposure, but simply churning out new multi-symptom formulations and delivery mechanisms will not hold that hard-won space for long. No shopper today wishes for more choices where there are already too many, but they will climb mountains to find a product that gets a job done perfectly.

» Having a startlingly clear purpose for a product makes it easier to develop and expands its potential market. Product design intrinsically deals with hundreds of variables, from formulation, to package size, to the scope of symptoms to be treated. Don't start from a formulation and try to find a purpose for it—start with the consumers' "job." Designing products consumers can hire to "relieve my heartburn," "get rid of my headache," or "help me get a good night's sleep" appeal to a much larger target market than products that first ask consumers to self-segment themselves into demographic slivers.

True to form, the customer is always right. Do right by them—simply—and they'll keep coming back.

Greg Beasley is an expert in new product development and a healthcare researcher at Innosight Institute.

Dr. Jason Hwang is Executive Director of Healthcare at Innosight Institute. He can be reached at jhwang@innosightinstitute.org

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