Wednesday, December 04, 2013

Rogaine - lesson learned from innovation blunders

Here’s another great story with lessons learned from innovation blunders.

In this series of case studies, Hodock shares insight on avoiding 8 common mistakes in new product development. 

In the case of Rogaine, it was mismatched positioning.

Fifty million American men experience male-pattern baldness. In 1996, they received some very good news.  The Food and Drug Administration cleared Rogaine, a topical 2 percent minoxidil solution, as an over-the-counter hair regrowth drug for men and women with common hair loss. Hallelujah! Men suffering from hair loss often experienced “anxiety, loss of self-confidence and even depression”. Rogaine gave hair-challenged men a dual benefit—a full head of hair and the restoration of self-esteem.

Rogaine had a natural contagion, because the preliminary buzz purported it to be nothing short of a miracle. As a result, it had an avalanche of positive publicity prior to its market introduction. Wall Street was especially euphoric about Rogaine’s prospects, and its parent company, Upjohn (now Johnson & Johnson), did nothing to temper the financial cheerfulness coming from the street. In this situation, Rogaine’s positive buzz turned out to be destructive rather than helpful. Here’s why.

Balding males naively believed their departed hair follicles would return instantly by rubbing Rogaine into their scalps twice a day for a month or so. Rogaine initially attracted the most extreme cases of male-pattern baldness, primarily older males in their fifties and sixties desperately grasping for their youth. Rogaine could not deliver for these extreme cases. There was a deep ravine between positioning expectations and product delivery. 
Rogaine is a complex product, as explained to me by a Pfizer marketing executive. It is only effective in about 40 percent of the cases. It can take eight months to see the best results. The product is not particularly effective in cases of frontal baldness or receding hairlines. Compliance is essential to see any results. It must be used twice a day. If treatment is stopped, reversal occurs, losing any benefits from treatment. The application process—rubbing it into the scalp twice a day—is awkward.  Rogaine later attempted to make it easier with an aerosol foam version.  

Since many of the initial users represented extreme cases and a desire for instant gratification, they dripped out; their perceived expectations—“where’s my new hair??—weren’t instantly achieved. The buzz-worthy product was still talked about, but the talk turned negative from a large segment of disappointed men, dampening Rogaine’s prospects for marketplace success. 

Rogaine currently does target younger men with a more forthright approach that the product works for a certain type of male-pattern baldness, but it is not a panacea for every conceivable case of male baldness.
The makers of Rogaine made two major mistakes:

  1. Rogaine made no attempt to dismantle the early perceptions that it was a miracle product. This set an unrealistic level of expectation with respect to its product performance with the brand’s early bird customers.
  2. Rogaine required an extensive educational process to help men understand its strengths and limitations; this was never acted upon.

The net result was a wide gap between positioning expectations and product performance.

The product must be able to deliver on the positioning’s benefit promise, or there will be inevitable consumer backlash.  It’s hard to get the toothpaste back in the tube. That’s why marketers must get the positioning strategy right the first time out of the staring gate. 

Second chances are very rare. 

Rogaine never lived up to its potential, because the initial positioning and target segment were wrong from day one.

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