Blog 3: Renova Toilet Paper - Targeting a New Market Segment

In response to the growing trend of innovation, companies are starting to take on significant risks to develop a new product that is able to target new market segments. Renova is one of these daring companies to innovate toilet paper, which has always been considered to be a conservative and dull product, by making it colorful and appealing to its consumers for the first time. I am very interested in this topic because it is fascinating to discover companies presenting their innovative products in the market and observe how it affects consumers, especially products that are extremely creative and unthinkable. I was intrigued by how the company became successful in changing the formation and character of toilet paper as ordinary and cheap to a luxury and entertaining product. I would research further into the consumer’s insight on the product and compare the pre-purchase to the post-purchase behaviors. This will answer the question on whether Renova was the first to create a new market segment that no paper industries are able to target.

A brief history of Renova is that it is a well-known industry in Portuguese that primarily produces tissues and toilet paper. It is a small industry compared to other leading brands such as Procter & Gamble and Kimberly Clark, but Renova is highly recognized for its unique innovation on its products that differentiate them from its competitors. Renova introduced the first black toilet paper in 2005 and it is priced at around 8 Euros for 3 rolls which is considered to be a luxury product. The Renova Black has become a large attraction in the global market and increased sales exponentially. Currently, Renova is expanding its product line of luxury products and changing consumer’s views of toilet paper.

In my perspective, I would imagine colorful toilet paper at a much higher markup to be unsuccessful. I always tend to purchase the cheapest toilet paper because it is listed as a product that does not need to be highly spent on due to the fact that its purpose can be accomplished regardless of what toilet paper brand you use. However, Paulo da Silva, the President of Renova, challenged the consumer’s behavior on toilet paper by twisting their product towards the opposite extreme. He states, “Culturally, deep down, Renova Black invites people to break down whatever might be limiting as common sense ideas.” The Renova toilet paper has a significant connection to the value of the customer experience because it expands the minds of consumers to believe that it is possible for a ‘lifeless’ product to be entertaining and fun. It is agreeable that consumer’s experience with toilet paper is a routine purchase in which they do not put much thinking process into it besides the price quote.

In the article, “This Season’s Must-Have: The Little Black Roll,” it builds on a debate regarding how successful this product can be in the market. It is understandable that the primary consumers for these products would be luxury hotels and clubs where they would purchase a product that would increase value for their company. Having this colorful toilet paper in a bathroom would represent a luxurious setting because the Renova brand does not appear or feel cheap. However, the concern is focused on whether it would attract consumers to purchase it for their home. Consumers may be able to purchase them for display purposes, but would the company be able to retain loyal customers. Renova would have to strategize on how to continuously strive for innovation towards their product in the long run to sustain their brand image. In addition to black, Renova expanded its products by providing various shades of bright colors. Renova is also known for having fragrances and lotions integrated in its toilet paper. Another innovation is that the company was the first to introduce moist toilet paper. Therefore, it is important for Renova to be consistent in innovating new products related to their industry which will be very difficult considering the limitations placed on their product.

Another issue is whether Renova can successfully target a bigger market segment of consumers who would desire to change from their ordinary, routine purchase of toilet paper to a more fashionable bathroom? The target segment is people who are elastic in regards to the price of toilet papers. They are sensitive towards the change in price and are willing to go for cheaper price rather than a higher quality. As a result, toilet paper’s characteristic as cheap, ordinary and dul are permanently embedded in the minds of consumers. Henry Petroski, a design theorist, states that “shock and bathroom are unhappy couple, at least when combine outside a nightclub setting…I expect that many people who use the toilet do not want to be shocked.” However, in today’s trend, there is a large segment of consumers who have open arms for new and “weird” products.

My last concern in regards to how this connects to the customer experience is how individual consumers would go about utilizing the toilet paper. Do consumers purchase it as a souvenir or a display model to upgrade into a fashionable bathroom or will they use it for its original purpose? Because it is labeled as a luxury product, a majority of its consumers would consist of having a higher income status; thus, it is likely that they would utilize it for both purposes. As you enter into the Renova store, it is extremely different from any regular shopping experience of hygiene products. The store is colorful and radiant where they display toilet paper in clear glass cases which represents its luxury as well as selling toilet paper individually. In response, the store does somewhat attract individual consumers who are just wanting to purchase the product for decoration reasons or just as a souvenir.

Article: http://www.nytimes.com/2006/05/18/garden/18paper.html?pagewanted=all&_r=0 Videos: http://www.youtube.com/watch?v=-mXut_LujVM http://www.youtube.com/watch?v=VsFN_EQ6fJM