this could have a Huge impact on Your Product Strategy

By the late 1990s, the Bounty, an established paper towel Proctor & Gamble's brand was struggling with the global expansion.

The family-care team at P&G inspired by corporate stretch goals to think big started to work on tangential, white-space ideas, like plastic-wrap technology, food containers, and paper plates. These new products seemed promising, but they had little connection to better paper towels.

The president's of Global Family Care initial reaction was: "If it is true that we can’t get a decent return from the existing business, we should get out of the business entirely.” 

It was hard to do a brand globalization due to several challenges in Europe, Asia, and Latin America. In these markets, prices and willingness to pay were very low, running a niche strategy — target customers who valued premium performance — was nearly impossible.

Eventually, the company made strategic geographic choices where to play as well as choosing where NOT to play as well.


Deciding what NOT to do is as important as deciding what to do.
— Steve Jobs

With geography decided, where-to-play shifted to products. Innovation team decided to pursue new products, like food containers and paper cups, that were outside of the core of paper towels. Instead of innovating on the existing products, the team was chasing speculative product categories. 

Later they realized they could reorient the focus back to the core business, focusing on improving the competitive position in paper towels again. 

 

Critical questions to ask while considering where to play

  1. Who is the consumer?

  2. What is the job to be done?

  3. Why do consumers choose what they do?

After talking to customers, the team found that there were three distinct type of customers, each one with their own expectations for the product (strength & absorbency, a cloth-like feel, low-price). Ultimately, the family-care team discontinued the idea of targeting each customer segment with its own product type (Bounty Basic, Bounty Extra Soft) and chose not to play in the commodity portion of the market.

Where-to-play choices were made on several levels:

  1. Geography ( In what countries or regions will you seek to compete?) (North America)

  2. Consumers (What groups of customers will you target? In which price tier? Meeting which customer needs?)(Three segments in the top half of the market)

  3. Products (What kinds of products or services will you offer?)(Paper towels, branded basic and premium)

  4. Channels (How will you reach your customers? What channels will you use?)(Grocery stores, Mass discounters, Drugstores, and Membership club stores like Costco)

  5. Vertical stage of production (In what stages of production will you engage? Where along the value chain?)(R&D and production of the paper towel itself, but not growing, harvesting, or pulping the trees).


Making these clear where-to-play choices, for Bounty and the family-care category, spurred innovation and helped powerful brands grow even stronger.

As a result, P&G family care consistently delivered business growth and value creation at industry-leading levels.

The choices above are applicable for any type of business, no matter the size of the company or type of industry.

Think of a small farmer. He must answer a number of questions to get a clear sense of his playing field. 

  1. Will he sell only locally or to his friends and neighbors, or will he attempt to join a co-op that has a larger geographic footprint?

  2. Which fruits and vegetables will he grow?

  3. Will he sell organic products or standard ones?

  4. Will he sell bushels of fruit unprocessed or process apples into juice before selling them?

  5. Will he sell direct to consumers, or through a warehouse middleman? If he does process the fruit into juice, will he do that himself or outsource that phase of production?

If he is thoughtful, the farmer will consider where to play in a manner that enables him to choose geographies, segments, products, channels, and production options that work well together (e.g., selling organic veggies locally at farmer’s markets or processing fruit to sell nationally while minimizing spoilage).


Takeaways

  • Don't embark on strategy without specific where choices. If everything is priority, nothing is. There is no point in trying to capture all segments. You can't. Don't try.

  • A choice to serve everyone, everywhere or to simply serve all comers is a losing choice.

  • As you work through your own choices, recall that where-to-play choices are equally about where not to play. They take options off the table and create true focus for the organization.

I think considering where you are going to play as well as where you are NOT going to play is crucial for any strategy.

What are your thoughts on this subject? Excited to hear your opinion, post it in the comments below 👇🏻.

Thank you for reading!