New Product Category: Energy Chips?

If the energy rush of downing a can of Red Bull isn’t enough to stimulate you, help is on the way! Birmingham, AL-based Golden Flake has introduced NRG Phoenix Fury, a caffeine-coated potato chip. The product has the taste of hot and spicy barbeque, but a 3.5 oz bag packs the same caffeine punch as 3.5 cups of coffee. NRG Phoenix Fury is the latest extension of energy products arising from the popularity of energy drinks.

This innovation falls under the category of “just because it can be done, should it really be done?” It is logical that the energy products category can be expanded beyond energy drinks, but the potato chips category does not seem as compatible as extensions such as energy gum or energy bars. NRG Phoenix Fury is likely going to be a fad product that will join the annals of product failure. Golden Flake could make a greater contribution to society if by improving the nutritional value of its snack foods! Such innovation would have greater long-term value in the marketplace. Link

P.S. – Interestingly, there is no mention of the product on the Golden Flake web site. A new product should be touted, not kept quiet!

The iPhone Effect

Initial response to Apple’s iPhone has not been at the level the company expected. Forecasts called for initial sales between 500,000 and 750,000 units. Actual sales have been stated to be around 270,000 units, a figure which includes phones and accessories. Price may be one factor limiting sales as well as Apple’s exclusive distribution arrangement with AT&T. The remainder of 2007 will be a critical sales period as opportunities to sell iPhones in conjunction with back-to-school and Christmas could boost sales performance.

Regardless of whether the iPhone reaches sales forecasts (remember sales forecasts are only predictions and just like the weather forecast is often wrong, so are sales forecasts!), the launch of the iPhone is noteworthy in terms of product development. The combination of multiple functions and incorporation of control via touch screen represent innovations in the consumer electronics category. Also, it enourages innovation efforts by suppliers that design components for the iPhone, accessories that can be purchased to complement the iPhone, and future generation products that build on technologies appearing in the iPhone. So, even if you do not buy an iPhone it is possible that products you encounter in the near future have their roots in innovations related to the iPhone. Thus, the “iPhone Effect” is likely to extend beyond the number of units in use and will show itself in the product development process. Link

Are You Ready for some iPhone?

I think I now understand how football “experts” feel the week of the Super Bowl. All of them weigh in with their opinions about which team will win the big game, keys to success, and other observations that could impact the outcome of the game. For marketing experts, the launch of Apple’s iPhone this week has a similar atmosphere surrounding it.

Depending on which experts you wish to believe, the iPhone will revolutionize the wireless industry and add $10 billion in reveunes for Apple, or it will serve as a humbling experience for the same company that gave us the Newton. I believe conditions are favorable for the iPhone to succeed, but there are three keys to success that must be met:

1.The user experience must be positive. One of the reasons iPod has been a smash is it is easy to use. If users can learn to perform the multiple tasks of the iPhone with ease, they are much likely to sing the iPhone’s praises to others and serve as unofficial buzz agents by giving demos to people in their network. The multiple uses of the iPhone are irrelevant if owners perceive it’s too hard to use.

2.Behavior modification is necessary. Consumers must go from thinking in terms of specialized devices to generalized devices. We have been conditioned to shop for separate devices to serve our needs for wireless phone, camera, music player, and mobile email. Now, we’re being told that a single device can do all of these things. Accepting a generalized device involves making trade-offs in performance as you can buy specialized devices that do each of the tasks better than an iPhone. The iPhone’s promise is one of simplifying our electronic gadget needs!

3.Customer support will be crucial. Service at point-of-sale and post-purchase will be influential in determining whether the iPhone succeeds. This key has a twist in that this is not up to Apple alone. AT&T will be a key partner in educating consumers about the iPhone and keeping them satisfied when product or service failure occurs. Conumers want a seemless experience; they don’t care which partner’s part of the offering is at fault. If they purchase an iPhone at an AT&T store, they will expect support there. If they contact Apple with a problem that is technically a phone service issue, they’re going to expect Apple to provide assistance.

So, for all of the hype surrounding the Apple iPhone the bottom line is that if consumers see value in the iPhone, that it adds to their quality of life in some way (e.g., adds enjoyment, creates convenience, or enhances image),the iPhone will likely succeed.