Jon Ragatz Consulting

UnCommon Sense Marketing, Planning and Growth Since 1999

 
   


 
Case histories and outcomes...
     
  Renaming a Product to Strengthen its Positioning  
 
   

What the heck is "liquid yogurt" anyway? That's what consumers were asking in research I conducted for Alta Dena Dairy in Southern California, a leading natural foods company. They went on to say "it sounds gross, like watered-down yogurt". Technically, however, this was far from correct; "drinkable yogurt" is made with the same ingredients as cupped yogurt but is processed slightly differently so the yogurt doesn't become "firm".

Alta Dena had originally launched liquid yogurt in 1993 in a mundane, gable-top milk carton that was inconvenient (non-reclosable) and in a traditional dairy size too large for a single serving (10.67 oz). Consumer research confirmed that this product concept was a poor fit with an otherwise superb and unique product. As you would expect, sales were marginal.

 
   


Since I strongly believe that many of the best brand names "speak for themselves", the product was renamed "Alta Dena Yogurt Drinkables". At the same time, we introduced new plastic reclosable packaging including a convenient, portable, eight-ounce single serve size.

The result? Sales immediately tripled and the brand became number two in its niche, even though it was marketed primarily on the west coast.

 
       
     
Contact me to discuss how I can help you with brand naming.
 

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  Developing Marketing & Business Plans  
 
   

In 1999, "Chocolate Jon" Stocking, founder of the Endangered Species Chocolate Company came to us to develop his marketing and business plans. At the time, he wasn't sure of his market position (turns out the company was number seven in its category) or his overall direction. He just wanted to profitably grow without taking unnecessary risks. His Belgian style chocolates are superb and the company really does give 10% or more of its products to support endangered species. Among my recommendations was hiring a sales manager, increasing distribution in the natural foods channel and increasing consumer awareness.

 
   

The result? The Endangered Species Chocolate Company tripled in size and became the leading brand in the all-natural segment, surpassing then leader Newman's Own in 2003 (source: SPINs). In 2005, the company was sold to an Indiana-based entrepreneur.
 
       
     
Contact me to discuss how I can develop marketing and business plans for your business.
 

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  Reversing Long term Sales Declines  
 

 
Observing consumer behavior, in this instance a Hispanic shopper buying a full case (48 cans) of evaporated milk in a conventional supermarket, set off a sudden "Ah Hah!". Why? Because for 29 consecutive years (from 1957-1986), this market had been declining steadily at 5% per year. Fewer and fewer consumers used the product as substitutes (fresh milk, instant milk, infant formulas and nondairy creamers) and refrigeration became readily available.
 
   
Like waxed paper and cinnamon mouthwashes, the market for evaporated milk was in the declining stage of its lifecycle and looked doomed.

Marketing support had been curtailed to small regional efforts and an annual holiday promotion, trying to get consumers to buy just one or two cans a year.
 
   


Conversations we had with this Hispanic consumer, combined with subsequent research, revealed that Hispanic households use 123 times as much evaporated milk as traditional "Anglo" households. Plus, this segment was not only growing but it was also becoming increasingly affluent.

The result? Retargeting Carnation brand's marketing mix (labeling, advertising, sponsorships and promotions) led to the first market and brand share increases in 29 years
.

 
       
     
Contact me to discuss how I can help you overcome sales declines.
 

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  Improving a Product While Lowering Costs  
 
   

Somewhere deep in the consumer usage information on hot cocoa products was an obscure chart I found showing that (marshmallow) consumers switched brands, not forms when stores were out of stock. Users didn't really care what brand they bought as long as it had marshmallows in it!

The following season, I led Carnation's introduction of an improved marshmallow product with 50% more marshmallows.

 
   

The result? Sales soared 36%. As a added bonus, profit margins also improved because this offering was cheaper to make.
 
       
     
Contact me to discuss how I can help you improve your products.
 

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  Achieving Major Cost Savings  
 
   

Pondering the ingredient list of a leading food product and asking the research and development team a few basic questions, we confirmed our suspicion that three key ingredients delivered similar consumer benefits - taste and mouth feel. The exciting part was that the costs of these raw materials (nonfat dry milk, whey, and coffee creamer) varied by a factor of three!

Subsequent formulations and consumer testing identified the optimum formulation which was not only cheaper to produce but also preferred by consumers.

The result? A $4 million annual cost savings!

 
       
     
Contact me to discuss how I can help you achieve savings.
 

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  Researching and Repackaging a Product  
 
   

I view packaging as the fifth 'P' of the marketing mix for most consumer products - equal in value to product, place, price and promotion. This is especially important for smaller brands and line extensions with smaller advertising budgets and lower consumer awareness.

 
   

Andersen's is an all natural brand of restaurant-quality soup that has been popular in the western US since the 1920’s, when they were first introduced in Pea Soup Andersen’s roadside restaurants. Today, they command almost half of all pea soup sales in grocery stores in the west. By 2002, the labeling on their package was almost ten years old and the brand was receiving very little sales and marketing support. First conducing focus groups, and then applying a little uncommon sense, the Andersen’s Soup line was redressed, with more appetizing and contemporary packaging.

 
   
The result? Sales immediately jumped 50%!
We cannot attribute all of this to the package alone, since shelf signs like the one to the right were also used to announce the change. But, the packaging today is certainly working much harder for the brand!
 
       
     
Contact me to discuss how I can help you with your repackaging needs.
 

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  Optimizing Product Assortment  
 
   
I call it the "chocolate, strawberry & vanilla syndrome". Others call it the Pareto Principle or the 80/20 rule. Whatever its name, many products suffer from this potentially fatal disease which occurs when a manufacturer's assortment of sizes and flavors is too broad to sustain mass market interest.
 
   


Here are several situations in which a little uncommon sense has helped:

1) A dairy company with $200 million in sales sold 1200 items. Astonishingly, the top 26 items accounted for over 50% of sales.

2) A leading brand with $33 million in sales in a mature and declining category still offered seven sizes and formats, just one less than it had when sales were at their peak over a decade earlier.

3) A natural foods brand with $4 million in sales offered 12 snack varieties, yet the top three accounted for over half of all sales. Even more disturbing, these top sellers were often out of stock.

 
   


The results? The first company eliminated three hundred items from its mix with no noticeable loss of sales. It significantly improved utilization of warehousing space, reduced spoils and radically simplified its business.

The second company dropped two sizes with no noticeable loss of sales. It slightly improved profit margins as a result of fewer production line changeovers, lower inventory carrying costs for packaging and reduced damages.

The last company is still struggling with what to do even though we recommended reducing the assortment by 50%.

 
       
     
Contact me to discuss how I can help you optimize your product assortment.
 

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  Increasing Sales Leads Using Direct Mail  
 
   

How can a business-to-business company efficiently identify potential new customers and generate "qualified" and "likely" sales leads?  

I worked closely with just such a client who wanted to significantly expand their business by taking their existing products to both present markets (a market penetration strategy) and new markets (a market development strategy).  The key issue was:  how do we identify qualified and likely buyers so their salespeople can optimize their sales calls?  My solution included:

  • sending a targeted direct mailing to buyers
  • product samples
  • a reply card to assess the target's key purchase intent measures (i.e., "How soon are you likely to place your next order?") and
  • an incentive to generate rapid responses (a relatively small, time-limited promotional gift).

The result?  The initial mailing exceeded projections by achieving a response rate almost twice the industry average.  My client's database of qualified leads more than doubled and new business is being booked nationwide from customers who were never previously conceived of!  The entire marketing program was paid for with incremental profits from the first three new orders generated.

 
       
     
Contact me  to discuss how I can help you generate sales leads. 
 

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  Finding the Right Merging Partner  
 
   

What do you do when you are in an innovative but smaller company and you hit the wall? That is, you reach the point where you either need outside investment or you must sell your company for it to grow further? That is the hard decision which several of my clients have faced.

 
   


I work closely with such companies to help identify potential merger partners to whom the brands,  products and expertise involved have the greatest value. This process must also be carefully balanced with the long term goals and values of the seller.

The results? One brand was sold to its co-packer, which had not only the production capability and expertise, but also complementary brands, sales support and strong distribution.  Another was sold to a growing company acquiring "critical mass". 
 
         
     
Contact me to discuss how I can help you with objective growth or exit options.

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2000-2017 Jon Ragatz Consulting