It will not be bought again by anyone in my household.
Here is what I suspect happened.
Sales of the brand were eroding as cheaper, usually house branded product ate into the volumes. Somewhere in the multinational that owns the brand there was a bright young thing charged with resurrecting volumes, a project to ‘test their metal,’ requiring a 20% increase for success to be declared.
He, or more likely these days, she, did the corporate rounds seeking inspiration.
The R&D people believed they could improve the performance of the product by utilising a new emerging technology, but it required an extensive R&D program to clarify some of the technical issues. No budget available.
The Engineering people reckoned they could speed up the line, reducing costs by updating, at considerable capital cost, the existing machinery, making production cheaper and more flexible. This would reduce the systemic out of stock problem caused by the long runs required to generate factory efficiencies. These factory KPI’s are completely disconnected to the increasing difficulty of forecasting sales as volumes erode and become more erratic. No capital budget available.
The accountants are arguing for a price increase as well as a reduction in retailer promotional spend, as the gross margins fall below their target rates. Neither tactic seems well suited to the problem at hand.
The advertising agency strongly recommended a multi million dollar integrated TV, Magazine and digital marketing campaign, designed to bring back lapsed users to the brand, while intriguing new users to give it a try. No budget available.
The marketing he/she concerned reckoned it would be easier and cheaper to make the hole in the top bigger, make the product flow faster, encouraging a quicker usage cycle and therefore increasing replacement sales.
On a spreadsheet it looks logical, sensible, and with a great ROI. Everybody was happy, especially the product manager, who could see the trappings of corporate success coming his/her way by Christmas.
Whoops: forgot the value conscious consumer, to whom the integrity of the brand had remained, until now, an important consideration, and who is not stupid. She is my wife, (who still does the bulk of the shopping) and believe me, she is absolutely unforgiving.
Being captured by the interaction of functional KPI’s, status quo management processes, and resistance to any change, is a common corporate problem. It is unsolvable by anyone other than the Boss, who is mostly too busy contemplating the forest next door (or their navels) to see the trees in the forest they currently occupy, and take some decisive action.
When your brand, marketing, and innovation processes need a reality check, call me to tap into the ‘experience bank’ in my possession.
