This is the second in a series of posts sharing business lessons learned from the movie, AMERICAN GANGSTER.
Setting the Scene:
In the early 70s, heroin was widely available in the streets of New York City. Common practice was to dilute the heroin with sugars, chalk, flour, or powdered milk. By diluting the heroin, dealers were able to significantly stretch their product inventory and maintain their high prices without upsetting their customer base. Customers had come to expect lower potency heroin as the only choice despite a growing number of dealers.
Launching a Remarkable Product
Frank Lucas understood heroin customers would appreciate a richer, more potent product at a lower price.
To create such a remarkable product, Lucas had to go outside the established heroin supply chain. He cut out the middleman wholesale supplier and went straight to the source by forging a direct business relationship with a heroin producer in Saigon, Vietnam. He procured 100% pure heroin product and smuggled it into New York City using the US Army as the transportation channel.
And, instead of following the standard drug dealing practice of diluting heroin with adjuncts, Lucas made the strategic decision to differentiate his product by selling 100% pure heroin.
Plus, Lucas smartly packaged his heroin in small blue baggies and stamped each bag with the brand name, BLUE MAGIC. (“Blue Magic” references the purity of the product. When tested with chemicals, pure heroin turns blue.)
Frank Lucas simply followed the Purple Cow approach and the ZAG pathway to creating a remarkable product.
Out-of-the-box thinking all-the-way. Just like other “Blue Magic” products and businesses … iPod … Starbucks Coffee … Method soap … Whole Foods Market … In-N-Out Burger … Amazon.com … and the list could go on and on.