HBR On Strategy: Bringing Innovation to an Underserved Market

Episode Release Date: April 9, 2025
Hosts: Amy Bernstein (HBR's Editor-in-Chief) and Amy Gallo (Contributing Editor to HBR)

Introduction

In the episode titled "Bringing Innovation to an Underserved Market," hosts Amy Bernstein and Amy Gallo delve into the strategic innovations of Thinx, a pioneering brand in the feminine hygiene industry. The discussion is anchored around a case study authored by Harvard Business School Professor Rembrandt Koenig, which examines how Thinx navigated and transformed a traditionally taboo market through innovative marketing and product development.

The Taboo of Menstruation and Market Stagnation

The feminine hygiene market has long been hindered by societal taboos surrounding menstruation, limiting both innovation and effective marketing strategies. As Amy Bernstein highlights:

"[00:02:08] '...how taboos have really shaped the economics of this industry... shapes a lot of economic action... it shapes things like switching costs.'"

These social norms not only discouraged open conversation but also impeded consumer awareness and competition, allowing established giants like Procter & Gamble and Kimberly-Clark to dominate the market with high-profit margins and minimal innovation.

Thinx's Strategic Innovation and Market Entry

Thinx entered the market with a disruptive product: period underwear. This innovation addressed multiple pain points—environmental concerns, comfort, and usability—while challenging existing taboos. The brand's entry strategy was bold and provocative, aiming to spark conversation and break societal norms. Key strategies included:

• Crowdfunding and Grassroots Marketing: Thinx initially raised funds through a Kickstarter campaign, garnering $65,000 to develop prototypes. This grassroots approach built early interest and community support.

• Provocative Advertising: Thinx intentionally created controversy to gain attention. For instance, their subway ads in New York City and displays in Selfridges, London, generated significant media coverage by challenging traditional advertising norms around menstruation.

"[00:10:11] '...they [Thinx] do something that's super clever... when you confront these sort of taboo or uncomfortable industries, you turn it around and you break that taboo.'"

Leadership Transition and Scaling Challenges

The arrival of Maria Mullen as CEO marked a pivotal shift in Thinx's strategy. Maria faced the challenge of scaling the company amidst internal turmoil and the departure of the founder under controversial circumstances. Her approach included:

• Establishing Robust Business Processes: Maria focused on implementing routines and metrics to transition Thinx from a mission-driven startup to a scalable business entity.

• Balancing Social Purpose with Business Needs: While maintaining the company's core mission to empower women, Maria recognized the necessity of diversifying the company's internal policies, such as introducing maternity leave, to support sustainable growth.

"[00:15:50] '...if this product was going to make a difference in the world, they couldn't just focus on the message and the purpose internally. They needed to make sure they put Routines so that they could actually scale that innovation.'"

Navigating Market Expansion and Consumer Segmentation

Thinx identified two primary consumer personas:

1. Elena: A young, urban professional who engages primarily through direct-to-consumer (DTC) channels like Instagram and Facebook.
2. Diane: A mid-career woman with children, representing a more conventional consumer base found in retail giants like Target and Walmart.

The strategic dilemma revolved around whether to continue focusing on DTC channels or to expand into mass retail, which necessitated considerations around pricing, brand positioning, and market segmentation.

"[00:07:13] '...their margins are like 50% on these products. It's a really big market.'"

Partnership with Kimberly-Clark and Strategic Growth

To facilitate expansion, Maria pursued additional funding and strategic partnerships, culminating in a significant investment from Kimberly-Clark's corporate venture capital arm. This partnership provided Thinx with:

• Capital for Expansion: Funding enabled larger advertising campaigns, increased production capabilities, and workforce expansion.
• Access to Global Distribution Networks: Leveraging Kimberly-Clark's established channels facilitated Thinx's entry into international markets.

"[00:23:54] '...the partnership is important because it potentially gives access to a whole global distribution network over the long term as they start thinking about scaling.'"

Marketing Campaigns and Controversy Management

Thinx continued its strategy of provocative marketing to maintain visibility and challenge societal norms. A notable campaign titled "MENSTRUATION MEN" posed the hypothetical scenario of men experiencing menstruation, aiming to provoke thought and dialogue.

However, the campaign's effectiveness was tested as it coincided with the COVID-19 pandemic. The shift in consumer behavior—being at home more—resulted in increased openness to trying new products, ironically aiding Thinx's growth amidst broader retail challenges.

"[00:26:24] '...during the pandemic, with everybody being at home, they were more comfortable trying products like Thinx.'"

Addressing Incontinence and Market Diversification

Thinx explored expanding into the incontinence market, recognizing its growth potential due to an aging global population. However, this segment presented unique challenges:

• Different Consumer Behaviors: Unlike younger consumers active on social media, the primary demographic for incontinence products were less engaged with digital channels.
• Complex Marketing Needs: Effective communication required more nuanced approaches, including television advertising and in-store education.

"[00:22:33] '...the older population is less likely to be super active on these social media platforms... Without that online channel, they had a hard time scaling beyond that.'"

Concluding Insights

The episode underscores the critical role of diversity in innovation and strategy. Amy Bernstein emphasizes that:

"[00:27:11] '...diversity or a lack of diversity isn't just a problem for your HR folks, isn't just a problem internally in your company. It's a problem for innovation. It's a problem for strategy... you can build a really successful company, you can do a lot of good in the world at the same time.'"

Key Takeaways:

• Challenging Taboos Can Drive Innovation: Thinx's success illustrates how confronting societal taboos can open avenues for meaningful innovation and market disruption.

• Leadership and Organizational Change are Crucial for Scaling: Effective leadership transitions and the implementation of robust business processes are essential for transforming mission-driven startups into scalable enterprises.

• Strategic Partnerships Facilitate Growth: Collaborations with established industry players like Kimberly-Clark can provide the necessary resources and distribution channels for global expansion.

• Diversity Enhances Strategic Decision-Making: Incorporating diverse perspectives within leadership and product development teams leads to more inclusive and innovative strategies.

Conclusion

"Bringing Innovation to an Underserved Market" offers a comprehensive exploration of Thinx's journey in transforming the feminine hygiene industry. Through strategic innovation, provocative marketing, and effective leadership, Thinx not only disrupted a stagnant market but also highlighted the broader implications of diversity in shaping business strategies and fostering inclusive growth.

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