Problem: Market share
of Kraft Salad Dressings
went
from 42% to 34% and annual profits were off by close to $50 million.
Solution: A. B. Clark performed a MARKET Structure Study. In so doing, it was found
that salad dressings fit into an eighteen-cell matrix. They are in small (8
ounces or less), medium (above 8 but below 18 ounces) or large (18 ounces or
more) bottles. The second dimension is that they are either healthy or
regular. Lastly, salad dressings are patriotic. In other words, they are
red, white and oily. ☺ Most of Hidden Valley's products are
white, while most of Wishbone's are oily. However, while Kraft is the
strongest player in the red dressing category, neither it nor any other
company was making red-healthy-large grocery store salad
dressing products according to sales data collected
from one out of every ten grocery stores. By putting Kraft into the
red-healthy-large category Kraft more than regained its lost market share
and increased annual bottom-line salad dressing profits by over $60 million.
Problem:
A major OTC (Over-the-Counter) drug
manufacturer had a headache remedy with lackluster sales and a declining
analgesic market share.
Solution: A. B. Clark performed a MARKET Structure Study and found that the
analgesic market has several segments. The major reason for analgesic usage
is arthritis. However, there are also segments that cater to those with
problems like headaches (e.g., Excedrin), soreness from working out (e.g.,
Nuprin) and backaches (e.g., Doan's).
As the average age of the population was
rising and as more people
were taking an aspirin a day to prevent heart attacks, analgesic usage was
increasing. Similarly, products like Bufferin that catered to elderly needs
for an arthritis remedy that is gentle on the stomach (i.e., because the
gastrointestinal tract's ability to handle acidic products decreases with
age) were doing well.
When A. B. Clark analyzed
the analgesic market, it was discovered that there are two major types of
headaches. The first is migraine headaches, which generally start during the
teenage years and typically decrease in both severity and frequency as one
gets older. Secondly, there are stress headaches that normally begin in the
middle age years (i.e., about the time that one's children begin dating, driving, and heading off to college) and they normally increase in severity
and frequency as individuals get older. (While it is conceded that you may
know an exception to these patterns, the medical literature supported what
the advanced, multivariate statistical tools were revealing from panel,
movement, and survey data.)
By using spokespersons in
their thirties, the company was missing the prime market for migraine
headaches (i.e., teenagers), as well as for stress headaches (i.e.,
elderly). The solution was to reposition the original product for
migraine usage and to introduce a stress headache formula that had the
secondary benefits of being gentle on the stomach and handling arthritis
concerns.
For the original product,
younger spokespersons were used and the emphasis was on its being a migraine
headache remedy. Yet, for the new product, older couples were used.
Specifically, an advertisement featuring a daughter on her first date and
missing her curfew was designed. Likewise, another ad for the new product featured grandparents in their fifties having to take
care of the grandkids when their single parent daughter dropped them off at
their house. The results from these simple changes were that (1) the original
product's sales and market shares increased, and (2) a new, highly successful product
line was introduced.
