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Subject: Step 3a- Revive Your Business So It Can Thrive

Author: Dennis S. Vogel

[ Next Thread | Previous Thread | Next Message | Previous Message ] Date Posted: 23:10:48 08/20/05 Sat In reply to: Anonymous 's message, "Help" on 15:31:23 08/01/05 Mon NOTE- You may want to copy & paste these posts into a text editor so you can adjust the size & color of the text & the background color. You could also print it to read without computer monitor glare. A Quick Course In Branding & Positioning If demand for the product(s) is low, what other things can the product(s) be used for? Baking soda is a very mature product category, but many uses have been discovered. Selling it for the other uses requires repositioning. I don’t think there was much risk in repositioning baking soda since it was very firmly established. Plus, Arm & Hammer seemed to own that market. What could a potential competitor do to improve baking soda? The chemical composition is set. The price is already very low, so a low-priced alternative would’ve been unprofitable. Some of what I wrote below is speculation & extrapolation. I do this as a kind of game theory to figure what was done & why. I know some things happen due to serendipity. But I think about what could’ve brought it about if it was planned. This way, I hope to find things I can apply to other situations. Sales to consumers were declining. The population was higher & bakeries were becoming very common. So, baking soda sales to bakeries became higher, but bakeries wouldn’t be buying massive amounts in small boxes. Supply & production capability was far higher than the demand. There was some profit in bulk sales, but not as much as in selling smaller amounts with a mark-up on packaging & distribution. As demand decreased, retailers would decrease the shelf space allotted to baking soda, unless Church & Dwight Co., (marketer of Arm & Hammer products) would pay higher slotting fees to have the same amount or more facings. That would cut profit even more. I remember when I was but a wee lad. When we ran out of toothpaste, we used baking soda. So, it didn’t surprise me when baking soda was added to toothpaste. Church & Dwight Co., employees probably knew baking soda was used for other things. They may have gathered information about how people used baking soda, then tested it to be sure it worked well & in which situations. Then they had reasons for consumers to buy baking soda again. Companies may buy baking soda for alternative uses also, but the focus was probably on consumers. Based on what I’ve learned from various sources, I think companies should keep their focus on a small number of products & services. But I suppose it was worthwhile for Church & Dwight Co., to experiment with selling other products with baking soda in them, like laundry detergent. When a company expands its product/service lines, it fights a war on more than one front, each of which requires resources. Resources used on one front/line aren’t available for other fronts/lines. Marketing budgets can be conserved by promoting multiple products/services together, but that decreases the amount of attention consumers devote to each product/service. It also limits the air time/space available for each product/service. So, the sales message is diluted & decreased. It saves money but it tends to be penny-wise & pound-foolish. Also if multiple products & services are promoted together in broadcast commercials, people may pay attention to the description of the third product/service & forget about the first two. In broadcast, especially, only one sales point should be emphasized. Unless the products/services are packaged together as a set or kit &, as a unit, offer the same general benefits, the message may confuse consumers. Or they might not even bother to try to figure it out. Side Bar- If a realtor got other businesses to bundle services to together, each service may have a different specific benefit, but together, they may have the same general benefit. Example- House painting, landscaping & pest extermination would get a house ready to put on the market or make a house, just purchased, ready to live in. End of Side Bar Church & Dwight Co., isn’t apt to be pushed out of its original category. I don’t think it even tries to sell baking soda to consumers as a recipe ingredient anymore. You can get their summarized history with this link http://www.armandhammer.com/history/# This web page might inspire some ideas in your mind - http://www.armandhammer.com/brochure/ If you download the firepail.pdf you’ll get valuable a fire solution & can extrapolate a business lesson. Can you imagine any other product, other than water, being promoted to extinguish fires & be put into people’s mouths? Do I profit from promoting these products? I wish I did. Though I’m not a lawyer, I think about legal ramifications. Baking soda is safe in food, so recommending its use to clean teeth is a low risk. If somebody got cavities anyway, it could be blamed on other factors & the financial exposure wouldn’t be much. But if somebody tried to use baking soda to put out a fire & got badly burned, there could be a lawsuit in that. [ Next Thread | Previous Thread | Next Message | Previous Message ]

Replies:

Subject	Author	Date
Step 3b- Branding By Association	Dennis S. Vogel	23:13:10 08/20/05 Sat