The Chicken or the Egg?


When I was a little boy the role of Lucozade was simple. If you were ill your Mum went to the shop, bought a large bottle of Lucozade, poured you a glass and stuck the bottle by your bed “for when you wake up in the night, dear.”

Lucozade was orange, it was fizzy, it came in large bottles, its mission in life was to “aid recovery…” And sales were declining.

And then Lucozade was re-born. Completely, utterly, totally changed. Suddenly, it didn’t “aid recovery.” Now it “replaced lost energy.” It wasn’t for ill people any more – it was for fit people who wanted to be fitter. Daley Thompson blasted down the track and then grabbed his Lucozade Sport. Premiership footballers walked off the pitch throwing plastic bottles of Lucozade to each other. And sales rocketed.

In my view, the best re-launch of a product I will ever see. Ogilvy & Mather, I salute you.

Fast forward to six or seven years ago. A friend of mine is in hospital and I go to visit him. As I enter the ward, there’s a plastic bottle on the wall. Something called Spirigel. A sign says, “Please sanitise your hands before entering ward.” Fair enough. I do as I’m told. Are my hands sanitised? I’ve no idea…

And now? I spend half my damn life sanitising my hands. Everywhere I go: schools, offices, hotels – you cannot live in the modern world without sanitising your hands. I don’t know the advertising, marketing agency or sales force to credit here, but someone’s done a remarkable job.

So two products; two great pieces of marketing. But which is more important? The product or the marketing? And perhaps more importantly if you’re looking at your own business and thinking of developing a new product (or service), which comes first? Product – or marketing? Today, it’s the business equivalent of ‘the chicken or the egg.’

In the old days it was simple. The designers designed something and then tossed it to the engineers to see if it could be built. If the engineers said ‘yes’ they built it, and then it was up to marketing to sell it. Did this produce some costly mistakes? Oh yes. (Anyone remember the square steering wheel on the Austin Allegro?)

But you see the same mistake still repeated today. Over the past couple of years I’ve seen three or four instances of entrepreneurs putting their heart and soul (and plenty of money) into a product; get it to a stage where it’s ready to be manufactured – only to discover that there’s no market for it.

When I was researching this blog post I read a great story about a team of developers in the US who finally brought a scheduling software app to market, only to discover that their customer acquisition cost was $1,000 – and that similar products were selling for $100.

There were two fundamental changes they should have taken into account. Number one, testing the market is much easier than it used to be. If you’re developing a product or service – and I’m not talking something groundbreaking like the Model T or the iPod: I’m talking the everyday products and services that are the cornerstone of your business – then it’s relatively easy to use social media to gauge your audience reaction. That may cost some time: it won’t cost much money.

Number two is financing. As you know I think outside investors are going to play an increasingly important part in more and more businesses. And outside investors want to know that you’ve tested the market. What are the first questions that are always asked on Dragons’ Den? How many have you sold so far? What’s the size of the market? Investors know it’s easier to make a product than it is to sell it.

So whatever you’re planning, do your research. Test your marketing first.

The story I’ve just mentioned illustrated this perfectly with a superb quote, which exactly summarises the situation:

It takes 2 hours to write a Google or Facebook ad. It takes 2 years + 2 hours to build a product and then write the ad.

That’s the question. How much time – and money – have you got?

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4 comments

  1. Chris Buckley (@Buckley_C) · January 20, 2012

    I had an Austin Allegro for a short while! Great blog and very true. Did you see the 3D Printing thing recently, so you can make the story in 2 hours and ‘print’ the product afterwards.

    • edreidyork · January 20, 2012

      The 3D printing kit is amazing, isn’t it? Thanks for the comments Chris

  2. Dave Rawlings · January 20, 2012

    When Total Quality Management was popular, there was a training video about a gradually fading company that was led by product development. They produced “innovations” like a toaster with a built-in garlic press, and a kettle with a tape measure!

    • edreidyork · January 20, 2012

      Dave – is it just me, or is everyone else upset the garlic press toaster never made it to market? Could you still design the equivalent for your bread oven?!

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