Incremental Innovation and the Razor-razorblade business model: Typical IP-Strategies
Innovation and Innovation Management are pressing topics in the current era of digitization. This can be seen also in relation to common business models. One example is the razor-razorblade business model typically related to incremental innovation. The name of the business model was coined by its use in the razor industry, where the razors are sold to a comparable cheap prize and the blades are creating the profits. This model is also frequently used in the printer industry with expensive ink cartridges. In digital industries it is used as freemium business model, where the basic software is free, and the profit is created with premium content. How to create and protect these business models with IP can be learned in the Certificate course on “Integrated IP and Innovation Management” at CEIPI. The next course starts on 15.09.2020.
Incremental innovation means, that existing products, services, or processes are optimized and developed further. The purpose is the optimization of either customer benefits, cost reduction, repositioning, adaptation for introduction in new markets, or adaptation to new circumstances such as new laws and standards. A typical example from the razor industry is Gillette in the area of product innovation. The basic configuration of the safety shaver was already developed and patent protected in 1904. Since then no radical innovation was introduced. But this does not mean, that there was no innovation. Especially, since the 1970s Gillette introduced every few years new razors with incremental innovation making each series of their products better than their predecessors.
Evolution of the Gillette shavers. Source:
Design of a cartridge for razor blades. Source:
This successful example of incremental innovation would not have been possible without fitting IP-Strategies by Gillette. These strategies are not only patent strategies to protect the technical innovation throughout each generation of razors. They are full IP strategies to keep the customer within the world of the Gillette brand and create a consistent user experience. This is also done with trademarks and designs.
Design of the packaging of a razor blade cartridge. Source:
For example, Gillette protected the design of the disposable razor cartridges (M9500466-0001) and also its packaging (40007917-0001). This way a customer easily recognizes the razor blades in the shop, which are for the selling company the most profitable items in the business model. Another smart IP Protection is the European Union trademark 008963258. This trade mark concerns the pattern of the handle of the shaver. Again this supports the strategy to exclusify the customer experience of the Gillette customer by making the physical experience of the handling of the razor unique and differentiating it from the competition.
European Union trademark for the pattern on the handle of a shaver. Source: