Malcolm Gladwell, Howard Moskowitz, spaghetti sauce and the end of endless line extensions.
Everybody who works in any phase of marketing in any category from investment counseling to internet routers, farm machinery to pharmaceuticals, horse chow to house paint, furniture to funeral services (you get the picture) should watch this video, take it to heart and share it with colleagues who might either benefit from it or deny its implications (after you’ve finished reading this blog entry, of course).
In the 20-minute video, Malcolm Gladwell, at the TED conference in 2004, makes great points about the fallibility of focus groups, the unreliability of asking consumers directly what they want in a product and the worldview of worms in horseradish. Gladwell is a genius at seeing the deep meaning in tiny things, so you owe it to yourself to watch the video. But, here’s my shot at condensing it to a bloggable blip:
Second-place spaghetti sauce manufacturer, Prego had a can’t-miss plan. They’d have Psychophysicist Dr. Howard Moskowitz determine the formulation for the “perfect” spaghetti sauce, with the flavor and texture that was most liked by the most people. Then, in one swoop, they’d unseat category leader Ragu.
But Dr. Moskowitz’s proved (to Prego’s initial dismay) there was no such thing as one perfect sauce, and that if Prego created a sauce that hit the “sweet spot” between the different sauces that different people liked, they’d have a sauce that millions would find acceptable, but nobody would love.
Dr. Moskowitz still saved the day, though. He went on to prove that if Prego looked at people not as one, big group of spaghetti sauce consumers, but as a groups of people who clustered around particular spaghetti sauce traits, then made multiple kinds of sauce, they could divide the market and conquer Ragu.
Thus was created Prego Extra Chunky, and thus was Ragu moved to the number two position in the category.
Now, embracing and exploiting* the diversity of an audience’s desired product attributes is a standard, common part of almost every marketer’s tool kit these days. We use this tool to design new products, seize shelf space (in the case of CPG’s) and brain space (in the case of just about everything other product or service) and to focus marketing programs more accurately.
So I’m going to make a bold assertion that this tool is, in fact, so standard and common that it just might be losing its effectiveness.
- In The Paradox of Choice, Barry Schwartz, a sociologist at Swarthmore, makes a pretty darned convincing argument that today’s abundance of choices (a good thing, right?) is, in fact, an excess of choices (he describes the shelves of his local supermarket groaning with 85 kinds of crackers, 21 “different” kinds of chocolate chip cookies, 75 kinds of iced tea, a dozen different choices of Pringles, 29 different chicken soups, and goes on to cite similar examples in just about every business category from financial services to health care plans) that bewilders, overwhelms and actually causes symptoms of depression in many people.
- According to The Wall Street Journal, (June 26, 2009), These Challenging Economic Times** may already be alleviating some of that problem, because many retailers are cutting way back on the variety of products they’re allowing onto their shelves (Walgreen’s is cutting the types of superglues it carries to 11 from 25. Wal-Mart is dropping 20 of the 24 different tape measures it sells. Kroger is eliminating about 30% of its cereal varieties).
The time is fast approaching, if it’s not already here, when marketers are no longer going to be able to line-extend their way to success. Tossing product features and consumer traits into the Cuisinart isn’t going to pass for “innovation.”
We’re all going to need to learn new ways to design products that are both relevant to and resonant with consumers who are more discerning, less willing to spend and just plain weary of having to chose between zip front and button fly, boot cut and standard leg, athletic fit and trim fit, stone washed and acid washed, just to buy a pair of pants.
*By the way, I’m sick and tired of “exploit” being considered a bad word. This is the definition according Microsoft Encarta:
exploit: verb [ trans. ] : make full use of and derive benefit from (a resource), noun : a bold or daring feat
Neither of those are bad things. I hereby reclaim this perfectly useful word for the forces of goodness and clarity.
**Henceforth in this blog, this irritatingly overused set of words will simply be abbreviated as “TCET”.