Case 4.2 ‘A FRIEND FOR LIFE ‘The Glades Company is 2 small manufacturer. It has produced and marketed a number of differ- ent toys and appliances that have done very well in the marketplace. Late last year, the product designer at the company, Tom Berringes, told the president, Paula Glades, thar he had invented a small, cuddly, talking beac that might have a great deal of appeal. The beac is made of fluffy brown material that simulates fur, and it has a tape inside that contains 50 messages. ‘The Glades Company decided to find out exactly how much market appeal the bear would have. Fifty of the bears were produced and placed in kindergartens and nurseries around town. ‘The resules were better than the firm had hoped. One of the nurseties reported: “The bear was s0 popular that most of the childeen wanted to take it home for an evening.” Another said the bear was the most popolar toy in the school. Based on these data, the company decided to manufacture and market 1,000 of the bears. At the same time, a catchy marketing slogan was formulated: “A Friend for Life.” The bear was mar- kketed as a product a child could play with for years and years. The first batch of 1,000 beats sold out within a week. The company then scheduled another production run, this time for 25,000 bears. Last week, in the middle of the production run, a problem was uncovered. The proce i rf of making the bear fur was much moce expensive than anticipated. The company is now faced wit two options: It can absorb the extra cost end have the simulated fur produced, or it can use g substitute fur that will not last as long. Specifically, the original simulated fur will last for up seven years of normal uses the less-expensive simulated fur will last for only eight months, Some of the managers at Glades believe that most children are not interested in playing with the same toy for moze than cight months; therefore, substituting the less-expensive simulated fur for the more-expensive fur should be no problem. Others believe that the company will damage its reputation if it opts for the substitute fur. “We are going to have complaints within cght months, and we are going to rue the day we agreed to a cheaper substitute,” the production manager argues. The sales manager disagrees, contending that “the market is ready for this product, and we ought to provide it.” In the middle of this crisis, the accounting, department issued its cost analysis of the venture. If the company goes with the more-expensive simulated fur, it will lose $2.75 per bear. If it chooses the less-expensive simulated fur, it will make a profit of $4.98 per bear The final decision on the matter rests with Paula Glades. People on both sides of the issue have given her their opinion. One of the last to speak was the vice president of manufacturing, who said, “If you opt for the less-expensive fur, think of what this is going to do to your marketing campaign of ‘A Friend for Life? Are you going to change this slogan to ‘A Friend for Eight Months'?" But the marketing vice president urged a different course of action: “We have a for tune tied up in this bear. If you stop production now or go to the more-expensive substitute, we'll lose our shirts. We aren’t doing anything illegal by substituting the fur. The bear looks the sam¢. ‘Who's to know?” QUESTIONS 41. Is the recommendation of the marketing vice president legal? Is it ethical? Why or why 0% 2. Would it be ethical if the firm used the less-expensive simulated fur but did not change iS slogan of “A Friend for Life” and did not tell the buyer about the change in the production process? Why or why not? 3. If you were advising Paula, what would you recommend?Gases 7 POST-IT? NOTES ‘One way new products are developed is to take a cuerent product and modify it in some form. Another way is to determine how a previously developed product can be marketed or used by a particular group of customers. The 3M Company is famous for many products, among them adhesives and abrasives. In one of 3M’s most famous innovative stories from the 1980s, a 3M manager, who was a member of a church chois, wanted to mark the pages of his hymnal so he could quickly find them. A bookmark would not do, because the piece of paper could easily fall our. The manager needed something thac would adhere to the page but not tear it, Back at work, the manager asked one of the mem- bers of the research and development department if an adhesive existed that would do this. One did, bus it never had been marketed because the company found that the adhesive was not strong. enough for industrial use. At the manager’s request, a batch of the glue was prepared and applied to small pieces of paper that could be used as bookmarks. ‘As the manager who had requested the product began to think about the new product, he concluded it had uses other than as 2 bookmark. Secretaries could use it to attach messages to files, and managers could use it to send nozes along with letters and memos. In an effort to spur interest in the product, the manager had a large batch of these “attachable” notes—now called Post-it notes—made, and he began distributing them to secretaries throughout the company. Before long, more people began to ask for them. The manager then ordered the supply cut off and told everyone who wanted them that they would have to contact the markering department. ‘When that department became inundated with calls for Post-it notes, it concluded that a strong, demand existed throughout the industry for these notes, and full production began. Today, Post-it notes are one of the largest and most successful product lines at the 3M Company. QUESTIONS +1, How did the creative thinking process work in the development of this product? Describe what took place in each of the four steps. 2. Why did the manager have the Post-it notes sent to secretaties throughout the company? ‘What was his objective in doing this? * 3, What type of innovation was this—invention, extension, duplication, or synthesis? Defend your answer 4, Which of the sources of innovative ideas discussed in the chapter help account for this produet’s success? Explain in detail.