Feb 20th 2012, 17:17 by B.R.
THE world of retail is polarising. Nowadays, it seems, there are only two options if you want to sell your product: you can be a commodity or a luxury. Which makes life difficult, you might think, if you are a toilet-paper manufacturer with haughty aspirations.
Not so. INSEAD has written a case study looking at Renova, whose big idea is black toilet paper.
The INSEAD case study documented how Renova, a privately-held European paper products company headquartered outside of Lisbon, Portugal, managed to differentiate itself from its international competitors, transform white toilet paper from a commodity into a premium product, and then enter new business sectors through innovative marketing. The result was “Renova Black,” the world's first black toilet paper, which rapidly shifted from a novelty item to a luxury fashion item. Equally rapidly, the company moved from supermarket aisles into boutique hotels, fashion shows and the headlines.
INSEAD's study won an annual competition run by ecch, an online depository of such works. The French school is the first non-American institution to win. Pierre Chandon, one of its authors, reckons that writing case studies for business-school students is an evolving art. Whereas a few years ago teaching material was primarily paper-based, he says, they are now “multi-sensory, multi-media super-productions”. In the Renova case, he goes on, “INSEAD created video interviews of consumers, company executives, and opinion leaders with computer animations and sent out product samples to instructors.”
There is a whole other world, right there. For a start, who are these toilet-paper instructors? And how exactly does one qualify to be an "opinion leader" in the field? On second thoughts, I don't want to know.
Award winning author, Pierre Chandon, Professor of Marketing, INSEAD, France talks about the development of his case Renova Toilet Paper: Avant-garde Marketing in a Commoditized Category.
In recent years I have written six cases and won four ecch European Case Awards so I set myself high standards before deciding to write another one (since this article was published the Renova case has won the Overall Award at the ecch Case Awards 2012). After writing many cases about large multinationationals (L'Oréal, Unilever, Diesel), I wanted to examine how a medium-sized European family business could manage to survive in a commoditized industry when facing competition from international giants and strong pressure from big distributors.
I was also looking for a product category that most people would know, but for a story that most people hadn't heard of. Although it is important to study well-known companies, you don't need a case to learn about Apple or Google's marketing strategy - these companies are in the news every day. I was looking for a business that was a leader in its market and had done extraordinary - and successful - things that most people hadn't heard about! Amazingly, the Renova case fits all of these criteria.
How did you make contact with the company?
The idea to write a case about Renova, and the link to the company, came from Raquel Seabra de Sousa. Raquel was enrolled in my Brand Management class at INSEAD at the time and had worked at BCG before joining INSEAD. She was able to establish the contact with Paulo Pereira da Silva, Renova's CEO, through BCG in Portugal.
The case is a very inspiring illustration of the value of good marketing. In a nutshell, Renova understands that it is not a paper company (the word paper is taboo). Instead, they are providing skin care (and thus well being) and now, with coloured toilet paper, home decoration.
With zero marketing investment, Renova completely changed the rules of the category and turned a very boring product, one that most people would never talk about in public, into something fun and interesting; almost a work of art. And now the world is talking about Renova, they have opened new distribution channels, they are selling in 57 countries (vs 4 before), and they are the subject of an INSEAD case study!
What the case also illustrates is that good marketing doesn't happen by accident. Renova's CEO combines, at an unusual level, a deep command of the science of management (he is himself a physicist who started as a production manager), acute sense of the artistic aspects of good marketing (product design) and, above all, a passion for understanding consumers.
At INSEAD, we are fortunate enough to have a wonderful team of multi-media journalists and technicians and they helped put together an extensive library of video material to accompany the case (available free to instructors when they purchase the teaching note). Shellie Karabell, our director of Media Relations, immediately understood the power of the story and, although she speaks no Portuguese, she went with Raquel to Portugal to interview people on the street, shoving black toilet paper in their face and asking them about their reactions! But then Shellie has 20 years of experience working as a journalist for US TV networks, including reporting about the Lebanese and Yugoslavian civil wars.
The video material adds tremendously to the learning experience of the students. Most guess correctly that Renova launched black toilet paper, either through a Google search or because they guess that we wouldn't have written a case otherwise. However, when they see the horrified or mocking reactions of consumers captured through the videos, it forces them to really think about the pros and cons of this risky idea.
How could this case be used by colleagues?
This is a great case for a core marketing course, for a marketing strategy or a brand strategy course. It also works for people teaching retailing and market research and could also be used in the strategy core course to illustrate market orientation.
Colleagues can watch an intro video at http://faculty.insead.edu/renova or download an inspection copy of the case from The Case Centre.
Any advice for case writers?
My advice is to favour cases with clear decisions and not just a description of what happened. In the case of Renova, students need to decide whether to cut prices, introduce new technological innovations, manufacture for private labels, or launch black toilet paper, among other decisions.
Watch Professor Chandon and Renova CEO Paulo Pereira da Silva introduce the first video segment of the video case study.
Click on the case title to view further details and, where available, an inspection copy.
Renova Toilet Paper: Avant-garde Marketing in a Commoditized Category
Pierre Chandon, Yakov Bart, Steven Sweldens and Raquel Seabra de Sousa
About the author
Pierre Chandon is Professor of Marketing at INSEAD and Academic Director of the INSEAD Social Science Research Centre. firstname.lastname@example.org
Yakov Bart is an Assistant Professor of Marketing at INSEAD. email@example.com
Steven Sweldens is an Assistant Professor of Marketing at INSEAD. firstname.lastname@example.org
Raquel Seabra de Sousa was an INSEAD MBA 2009 and consultant with BCG. e Seabra.email@example.com