PB&J Approach to Growth

If you’ve been following my facebook, you probably participated in a poll on peanutbutter storage post-jar-opening. While doing some light research to support my (minority) position that it belongs in the fridge, I found this article on the J.M. Smucker company, owner of (obviously) jellies and (less obviously) the Jif peanut butter brand. The article explains how a CPG company like Smucker’s managed to make it to #2 (beating out Apple) on this year’s Barron’s 500 list of the top publicly traded companies based on growth metrics.

What caught my attention was the short paragraph on this view of product innovation: Co nsumers don’t buy products; they hire products to do a specific job. The article doesn’t really go into the detail on this philosophy that it really deserves, but as old as this concept is (and believe me, it’s old), it’s surprising how many companies view their product from this lens. The companies that do view their product innovations this way usually have higher success rates on their new product lines.

iPods are not music players, they are tools hired to fight off boredom, stay entertained, or immerse yourself in music in any surrounding. In grad school I read a study about McDonald’s effort to improve their milkshakes, when they surprisingly found out that 40% of milkshakes were purchased in the morning by workers embarking on long commutes. These particular milkshake customers didn’t want a milkshake, they were hiring something quick, not messy, that they could consume with one hand on a long, boring commute. It’s probably not a coincidence that shortly after this research McDonald’s also came out with a line of smoothies (for those who want to hire the same type of product, but healthier). Harvard professor Theodore Levitt (who was surprisingly not quoted in this article out of HBR!) has the perfect way to sum this up: “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.”

P.S. – Jif’s official position on the storage of peanutbutter is that peanutbutter consumed in under 3 months is fine in the cabinet. If it’s kept longer than 3 months, it needs to go in the fridge. My peanutbutter’s chief “job” is to complement the jelly, and as a result I store it in the same place as my jelly – the fridge!

My next office/facebook debate? Creamy vs. Crunchy.

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