Case Study: Philips' Norelco

How neck hairs led to the remaking of an icon
BW 6/11/07

This is a classic example of “customer forward” product innovation!

THE PROBLEM

How do you dare redesign an icon? When the Dutch company Royal Philips Electronics (PHG ) pioneered the rotating blade electric razor in 1939 and sold it in 1947 in America as the Norelco shaver, it designed a brand as much as a product. "Norelco" stood for modern, industrial, technological. In the early 1960s, Norelco launched the first fully cordless razor and had 18% of the electric shaver market. By 1978, it controlled 60%.

But in more recent years, electric shavers have been overshadowed by the blade wars of the wet-shaving world. Gillette (PG ) has captured the high-tech high ground with its multibladed razors. By 2004, though Philips held 50% of the electric market, only 18% of all men used solely electric shavers, according to the company's market research. Last year, Philips decided to talk to customers to figure out how to redesign the Norelco electric shaver to give as close a shave as possible.

THE RESEARCH (They studied their targte customers)

Philips interviewed 5,000 men in the U.S., Europe, and China. Its target customer was between the ages of 35 and 54, an experienced shaver who is likely to spend more for a premium razor that will last six to seven years. The company searched for some undiscovered consumer need that might be met with a dynamite product—and found an opportunity in an unlikely place. It learned that one of the most common frustrations of shaving has nothing to do with the face: it's those pesky few flat-lying hairs on the neck under the chin. The men interviewed by the company had to shave over those hairs six or seven times, often irritating their skin and leaving welts or spawning in-grown hairs. Philips decided to develop a razor that closely shaves those neck hairs the first time. To do so, it needed to design an electric razor with much greater maneuverability to navigate the tricky area around the jugular vein. Its research also led the company to a name for the new model: the "Arcitec," a combination of "the arch of the neck" and "technology."

PROTOTYPING

Philips' teams of engineers, designers, and business strategists, led by Nico Engelsman, a senior vice-president for business management, and senior design director Tammo de Ligny also studied consumer trends among potential customers. They learned from interviews that their customers wanted materials that radiated strength, like stainless steel in the razor head. The teams also looked in hundreds of magazines and ads showing cars, phones, and men's accessories. For color, they drew inspiration from the silver Motorola (MOT ) RAZR phone, the BMW Z4 Coupe, and the Volant silver series skis: They made the Arcitec models black, charcoal, and silver.The designers began working up rough pictures of solutions to tackle the neck-shaving. Then they began prototyping and testing plastic models with consumers, iterating very quickly. To make the electric shaver more flexible and maneuverable than previous models, they created a bigger separation between the shaving head and the handle that men grasp as they shave. That allowed the head to pivot 360 degrees. Their testing also made clear they had to miniaturize the moving parts to make the grip easier as men moved the shaver under their chins along their necks. In the final testing in October, 2006, the designers tried out the razors in four sessions with four different panels of 50 participants each. In the first, the blades didn't protrude enough to give a close shave. The designers raised the blades, but went too far. The blades were too high, irritating the skin. On the third try, they got it right. They also tested the razors' performance using what they call a "paintbrush test." They shaved paintbrush bristles made of the thickest synthetic hair possible to evaluate how the shaver would perform on the toughest whiskers.

MARKETING

Philips will start selling the Arcitec in the U.S. and Britain in July and in the rest of the world in September. Prices will range from $169 to $249, depending on the model. The company will not market it as aggressively in India or China yet. Why? In India people can get a shave at the corner stand for 20 rupees, or 50 cents, so that huge market is not yet primed for a premium product like the Arcitec, Philips learned.Chinese men, the company found in its research, generally have less hair, and Asian hair tends to be rounder in shape and thicker in diameter than Caucasian hair, making it stronger but slower-growing. So the Chinese don't necessarily need a razor with three rotating blades like the Arcitec. Electric shaving is growing in popularity with young men in China, however, so Philips will launch a double-headed razor there along with the Arcitec to give customers some options.

And what about female consumers? Philips' research shows nearly half of electric shaver purchases are gifts, and 75% of those are bought by women for men. Yet wives, girlfriends, and moms don't know much about men's razors and are terrified of choosing the wrong one, the company found. So Philips will create a specific marketing campaign for female shoppers, and will have video demos online through Amazon.com (AMZN ) showing typical male shaving dilemmas, like getting at those nasty little neck hairs.The Arcitec's packaging will represent Philips' broader attempt to unify all its products under one brand name worldwide. For decades, the company sold its products in the U.S. under many brands, including Norelco. The Philips logo will now appear above the Norelco logo on the packaging. And in the future, Philips plans to phase out the name "Norelco."