When You’re NOT Really Doing it for Your Customers

We all are probably familiar with accidental innovations like plastics and penicillin–products that only came about because of the inventor’s inadvertent mishap. What I am going to write today is about innovations designed to resolve an immediate business threat but not capitalized upon, some of which later down the line pioneered by a better organized, bigger company with enough resources and R&D.

During the mid-seventies the affordable, lighter, fuel conserving mopeds (a low-power, lightweight motorized bicycle) segment grew rapidly in India. City roads were not well developed, public transport was poor. So, this was a preferred economical means of conveyance for rural and people in the lower economic strata.

Automobile Products of India a company established in 1949 and more famous for the ‘Lambretta’ brand of scooters under license from Innocenti of Italy, also launched the ‘Laxmi‘ brand of mopeds which was later sold to Kirloskar-Ghatge Patil Motors. Arvind, whose family business was in manufacture of ‘bobbins’ (a cylinder or cone holding thread, yarn, or wire, used in textile industry, especially in weaving, machine sewing, and lace-making) had to daily use this vehicle for making delivery at textile mills and often run out of fuel as the tank capacity of the mopeds was small. Dragging the moped to the next gas station involved physical labour and waste of time resulting into penalty by the mill due to downtime and loss of production.

Arvind found a small size lead acid battery from a scrap dealer and clamped it on the front suspension of his laxmi moped, by attaching a separate battery-powered hub motor to the front wheel he could still run it when it goes out of petrol. Now this was purely a need based innovation which was taken few steps further, in collaboration with the company showroom owner, who knew the family, suggesting customers if they need this additional option they can visit the Garach’s Garage to get a battery fitted at a cost. The showroom manager also enthusiastically shared it with company representatives who visited Arvind’s Gara(g)e. They rewarded him Rs.1000/-.Took pictures.

And as it happens, a few months later the company sent him a legal notice that any modification on their brand is covered under copyrights and Arvind will not be eligible for any royalty but taken to court if he does any modifications for his commercial gain without their legal approval. This was in the late 70s when reputation of families was more valued and small businesses feared taking on bigger business houses who had better lawyers, so the family decided not to challenge it in court. It was only some 25 years later, two final year mechanical engineering students in Mangalore registered similar innovation and much later, a Steel Engineering Company of Gujarat launched an eco-friendly electrical bike in 2004.

Long before Tata Salt, pioneered the packaged branded salt movement in India in 1983 (at that time most of the salt was sold loose without consistency of quality and accuracy of weight), Two cousins from a Rajasthani family accidentally developed the first packaged salt (albeit non-edible). The Kala family business suffered a major setback during late seventies when a consignment of industrial salt was affected by rain, rejected by the end user industry and trucks had to be unloaded in the home compound to avoid heavy demurrage charges. The landlord, dholakia, a london based NRI gave them an ultimatum to clear the compound within 3 days. The entire family of 2 brothers with help of school-time buddies toiled for 50 hours to pack the salt in plastic bags purchased from local markets, all different size and shape procured on need basis as the packaging activity progressed. Much after free samples distributed to relatives, friends and neighbors a commercial sale was made to 2 leading soap companies (one of them owned by another school mate Ram whose innovation story is also appended here under).

During the late 80s branded washing detergents were already making inroads into the local manufacturer’s market shares. There were Tatas, Levers and Swastik Industries and a local Gujarati entrepreneur was aggressively pushing his Nirma brand, giving the organized players the early scare. Two local washing soap manufacturers, of Bhavnagar, belonging to same community, were also experiencing the heat in a shrinking local market share where dealers and retailers were demanding more margins to stick with them. One of the short sighted, selfish local manufacturer resorted to unethical practice of bribing the temporary daily wage workers on the (soap) shop floor of his competitor, to deliberately let some empty containers pass through the conveyor belt before they are stacked and packed inside the cartons. Rejection, loss of reputation and settlements harried Ram who was the affected party.

Physical checking of each carton before dispatch will involve extra cost and labor when margins were shrinking. Ram’s factory was next to the railway station. He requested them for a 400-mm diameter high powered carriage fan from their scrap lot and placed it by the conveyor belt so the empty cases will fly off. This resolved the problem.

The common factor in all three case studies is the incidental innovation by lads from traditional business families. Perhaps a more customer focused effort could have really contributed to predict the commercial outcome. Who knows.

In case of the first and second case, there was a potential to turn the idea into a viable commercial venture but maybe then it was too early as there wasn’t a more conducive environment. But that shouldn’t stop us from trying. Isn’t it ?

[ All incidents are real life events witnessed by this writer. Much information about the family name, companies etc. is suppressed for sake of maintaining privacy]




Blog at WordPress.com.