And another Australian icon manufacturer goes into administration.
This time it was Rosella Foods… a 120 year old manufacturer of tomato sauce and soups. For those readers in other countries, I’m sure it’s no different. Companies that we believed to be somewhat economic icons … are failing over with regularity. No business seems insulated or particularly immune.
Why do business keep on failing?
And well may we ask why a company, established for some 100 years, fails ? What were they actually selling ? (Hint : don’t say tomato sauce). My point is … Rosella maybe, and I’m not an expert in this, have struggled for a long time to understand exactly what it was they were selling. Because in this age where every product is sliding into becoming a commodity .. we need to be aware of our ‘point of difference’. Our reason for coming to work.
Take the case of toothpaste. Interesting that when you buy this in a supermarket .. it’s rare to find a cheap ‘no names’ brand ?! The reason for this is that all major toothpaste companies work furiously to differentiate themselves and establish a unique market segment for themselves.
Colgate promotes a position of : ’No 1 recommended brand by dentists against cavities’. Macleans toothpaste promotes : ‘Have you Macleaned your teeth today’. Pearl Drops says : ’See the whiteness, Feel the shine’. And Sensodyne says : “no more pain from sensitive teeth’.
They are selling … cavities, freshness, whiteness and pain. Nowhere are they selling, the size of the toothpaste tube, the colour or the price of the toothpaste. (All the things that we breathlessly mention to our customers eh?!). And none of them wander into other competitors area of marketing. They focus on promoting their very own point of difference. (The reason Macleans always sell freshness to the opposite sex … never a mention of the word cavity).
So what should Rosella Foods have done ? Really easy for me to be wise on this … and despite the difficulties of selling into an oligopoly like situation with Woolworth’s and Coles (2 Australian supermarkets who dominate some 70% of the grocery dollar) … there should have been some product soul searching. I never knew this … as I only found out after they went into administration .. but Rosella Foods used more tomatoes in their sauce than any other company. I think it was something like 75% of the ingredients were actually tomato based … compared to the ‘no names’ brand .. at half the price and having around 30% of their product tomato based. Big difference ! Enough to change their economic fate ? Maybe not … but when did Rosella ever tell me about this fact ?
Are you resolving your customers’ problems?
So in our own businesses … what are we selling every day ? When was the last time you saw someone saying (and I’m sure there are some companies who do this .. it’s just that I’ve never heard of them) … No more back pain .. ever, when you buy this chair ? No more aching fingers ever .. when you write with this pen. No teenager required when you buy this TV set.
Well … you might say, I could never promise that, it’s just not true. I’d be sued. I’d go broke if I promised that. OK .. I understand your concern … but let me ask you then … what if you could say these things and know it was true. What would it mean for your sales ? What would it mean to your margins ? It’s a nice thought. And it’s the direction we should all be considering.
Think about it. Every product you sell … should be specifically designed and promoted to solve a specific problem.
Problem solving products are resistant (not immune) to becoming a commodity.
Problem solving products provide better margins … for a longer period.
A classic example of a company that designs and sells problem solving products is Johnson & Johnson.
Johnson’s Baby Powder.
Johnson’s ‘No More Tears’ shampoo.
Johnson’s Dental Floss
Johnson’s ‘Band Aid’s … all very laser like products in their consumer marketing ..
To be successful .. they identify a problem (babies and toddlers crying because the shampoo stings their eyes). Then they create a product to specifically solve this problem.
They continue by convincing you that their solution .. is the only one that should be trusted.
In our businesses then … you not only have to be aware of your customers needs … but you have to actively be talking about the problems to them … because the customer may just not know … there really IS a problem.
How many mothers in the 1960s just accepted that a child screamed, when you washed their hair ?
And finally .. speaking of problems. Whatever happened to the end of the world as promised us by the Mayans on December 23 last year ? Problems have a habit of seeming smaller .. when we look back at them. So don’t grumble. Check this out: here’s a list of some of the actual complaints made by tourists to their hotels and tour operators ! I’m sure you’ll get laugh if not a smile …
“On my holiday to Goa, India, I was disgusted to find that almost every restaurant served curry. I don’t like spicy food”
“We booked an excursion to a water park, but no-one told us we had to bring our costumes and towels”.
“We found the sand was not like your sand in the brochure. Your sand shows it as being yellow. Ours was white”.
“We went on a holiday to Spain and had a problem with the taxi drivers. They were all Spanish”.
And my favourite …
“ We bought Ray Ban sunglasses for 5 Euros from a street trader, only to find out they were fake”.
Until next time …
