Video Title: OXO: Company and Marketing Strategy

Video Title: OXO: Company and Marketing Strategy

Run Time: 6:40

Classroom Application: Instructors will find this video useful in the study of marketing strategy and product design. OXO serves as an excellent case study for these topics because OXO uses universal design principles to create products through a process of human-centered design. Universal design, however, is a corporate philosophy at OXO not a marketing position, as universal design is purposely not something the company chooses to talk about in their marketing strategy.

Synopsis

The mission at OXO is to create innovative consumer products that make everyday living easier. The company takes items that you interact with in your home and finds ways to improve the products functionally and ergonomically. The challenge facing OXO is how to reach multiple consumer segments with the same product. The solution this company has developed for overcoming this challenge is the implementation of universal design practices.

Discussion Questions

1. What are some of the market conditions that have led OXO to re-evaluate its marketing strategy?

At the core of OXO’s origins is the concept that kitchen and household gadgets were not designed ergonomically with ease-of-use in mind. This was particularly the case for people with dexterity issues (elderly, people with arthritis, people with disabilities). During the 1980s, this population of people was on the rise.

It was also apparent to OXO’s founders that kitchen and household gadgets were generally very plain, not created with style or home décor in mind. During the 1980s, the trend toward bigger, fancier kitchens was also on the rise.

OXO’s original strategy was to create products that would take the gadget market in new directions as far as appealing to the real needs of real users such as those mentioned above. But it also had to consider at some point that it could not branch out and re-create new products for all the different segments it was targeting (tots, as well as home décor conscious and those with dexterity issues). Its size as a smaller company as well as its desire to grow combined with those market conditions to create the need to focus on universal design.

2. Describe OXO’s branding strategy and the challenge this strategy creates for the company.

OXO uses a dual brand positioning strategy. They sell similar but different brands of products for different consumer segments. All products say OXO, but they are branded as smaller segments, such as Steel or Baby and Toddler. The challenge to this branding strategy is that making different products for different segments is very expensive. OXO’s challenge is finding a way to reach multiple consumer segments with the same product.

3. How has OXO modified its marketing mix? Are these changes in line with its mission?

Product – Universal design is very much a product development concept. OXO has focused on making each product (or the technology in each product) usable across multiple product categories and customer segments. Packaging is also oriented around this, as Alex Lee describes how a single product might be packaged in various ways with different OXO brands on the label, but the device just says OXO.
Price – not discussed in this video.
Place – OXO products are widely distributed through national discount retailers (Target, Walmart) as well as through specialty stores (Williams-Sonoma, Staples, Babies-R-Us) in order to reach every customer segment.
Promotion – not discussed in this video.

Quiz

1. What prompted Sam Farber to start OXO?

a. losing his job with a large housewares retailer

b. his desire to become an entrepreneur and run his own company

c. his wife Betsy’s arthritis, which made it difficult for her to cook due to the lack of kitchen tools designed to accommodate her needs

d. his need for small kitchen appliances that were not on the market at that time

Answer: c

Explanation: Sam Farber had retired after working thirty years in the housewares industry. When his wife developed severe arthritis in her hands and was unable to find kitchen tools that would accommodate her condition, Sam decided to start a company that designed and produced kitchen tools and gadgets for a wide spectrum of users, including those with dexterity issues.

2. Which of the following best describes the marketing challenge confronting OXO discussed in this video?

a. competing in a cost-driven industry with a value-added product

b. developing a way to reach multiple consumer segments with the same product

c. convincing customers that they have a need for the products produced by OXO

d. surviving the volatility of a single target market

Answer: b

Explanation: The main marketing challenge at OXO discussed in this video is how to reach multiple consumer segments with the same product. OXO uses a segmentation strategy, selling similar but different products to different consumer segments. Making different products for different segments is very expensive.

3. Which of the following most accurately describes the mission of OXO?

a. to be a leading provider of goods and services that are good for the environment

b. to create innovative consumer products that make everyday living easier

c. to expand the company globally

d. to sell used clothing and furniture for a profit

Answer: b

Explanation: The mission of OXO is to create innovative consumer products that make everyday living easier. OXO takes any item used in the home and finds a way to improve it functionally and ergonomically.

4. OXO’s first successful product was a potato peeler. Why was the product so successful?

a. It featured a dramatic change in style.

b. It was significantly less costly than other potato peelers.

c. The product was about the same in design and cost as other potato peelers, but it was so successful because of marketing efforts.

d. It was made from recycled materials.

Answer: a

Explanation: OXO’s potato peeler showed a dramatic change from earlier styles of the product.

5. At OXO, universal design has each of the following meanings EXCEPT which?

a. the design of products usable by the widest range of people operating in the widest range of situations

b. human-centered design of everything with everyone in mind

c. starting with a user’s needs in mind, designing a product that provides a solution to those needs, and then figuring out how to produce that product

d. the design of products by large design teams to be sure that as many characteristics of customers as possible are represented by the designers

Answer: d

Explanation: Universal design is defined in the video as “the design of products usable by the widest range of people operating in the widest range of situations.” OXO uses design to take into account the broadest spectrum of user needs. The company looks at the total population and tries to design a specific product that is easily usable by approximately 95 percent of the population. An alternate definition of universal design given in the video is “human-centered design of everything with everyone in mind.” Many companies make a product in a particular way just because a machine can produce it that way. At OXO, designers start with a user’s needs in mind. They then design a product that meets the user’s needs, and the final step is to find a way to produce that product.