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Published 26 August 2013 07:00, Updated 14 January 2014 10:36
Dick Smith needs to get his sales people to start doing what he’s paying them for and winning him better positions on supermarket shelves. Photo: David Tease
In recent times Dick Smith has taken to radio, print and electronic media to complain that the big chains were not supporting the tomato sauce his company produces.
He went on, at least in the interview I heard on Melbourne’s 3GW, to whinge that unless he got support from consumers, Coles would remove his tomato sauce from the shelf, and the reason for it not moving off the shelf was that the product was stuck at the bottom where no one could see it.
He pleaded for support and for some advertising man to help him develop a catch. By coincidence, at about the same time, I wrote about how manufacturers needed to review the way they managed their channel partnerships to improve the value both get out of any relationship.
So, here is an open letter to Dick Smith.
Dear Mr Smith.
I think that your open plea for support for your tomato sauce is admirable. I think, too, that your exercise as a PR initiative is great, but let me remind you of some realities. I say remind, because I really don’t believe you are as home-grown country naive as you would like people to believe.
It’s great that the profits go to charity. It’s great that you do this only to ensure Australians have a job. But get real: Coles and Woolworths bashing is easy simply because they are so big and so visible. The reality, though, is that they aren’t the marketers of your product. You are. They are your channel partners, and you should be working to develop that partnership, rather than just blaming them for this situation.
Looking for a great advertising man to help you with a new positioning and catchphrase – similar to the one that made you rich and famous to start with – isn’t the answer.
The challenge you now face isn’t about catchphrases, it’s about reality, about quality, about pricing and about consistency.
Simple brand and channel management activities will deliver much more than any catchphrase. Better quality at reasonable prices will attract more consumers, and consistency will win more hearts and minds than any fancy hat or catchy slogan.
Next, fix the product. You may think it’s the greatest product in the category but that can’t be good enough for channel partners. Your opinion doesn’t count. Consumer opinions do. If the product is really as good as you claim, and so much better, purer and more special than your rivals’, then get some evidence to prove it. Instead of bashing Heinz and Masterfoods, take a step up and prove the worth of your product. When you do that, consumers will make the switch themselves; they won’t wait for others to tell them.
Now, when you get those fundamentals right, buy a book on Branding 101. You’ll quickly see that consistency and reputation are the key ingredients for a strong brand – even more so than claimed quality. Being a top brand doesn’t mean you are the best, it does mean you are always the same, you are always consistent, you are always one thing and only one thing. It also means that people can recognise that you are different by looking at your packaging, which shouldn’t be the same as all your rivals’.
When you get that right, move on to getting your sales team to jack up their performance. Teach them to develop strong relationships based on trust (that you need to earn and prove), so channels such as Coles and Woolworths involve you in their strategic planning and thinking. And then worry about creating an innovative push strategy that makes consumers aware of the products, and how special they are. Do some taste tests, give away samples, repackage and start a purchase pattern that forces channels to recognise your product.
You see, Mr Smith, it’s not about whingeing, nor is about some misplaced view on expected loyalty, because we are all Australians. Coles and Woolworths (incidentally, both Australian companies) have a duty to their workers and shareholders (many of whom are also Australian) to deliver a profit. The way they do that is by reducing their costs and selling products at lower prices to their customers. The more people that come through the doors of their stores, the better off they, their staff and their shareholders are. Loyalty doesn’t enter the equation – good business sense does.
It’s admirable that you are supporting local growers and manufacturers. But to be competitive, you and the growers and manufacturers that you are loyal to, need to catch a wake-up call – become more industrious, more productive, more innovative, more competitive – and less complaining.
Help Coles and Woolworths improve the way they do business and show them how by supporting you and your colleagues they can improve their own profit performance, and you are guaranteed an audience. Talk to them about helping you keep afloat and you’ll soon find that in business it is everyone for himself.
So what can you do? Here is a 10-step program that can start the ball rolling.
1. For starters, forget about catchy phrases and pictures and develop a quality product with that quality certified by users, not manufacturers.
2. When you make a product, make those that consumers want, not that you feel are great.
3. Price the products for longer term profits, not instant wealth for the manufacturer.
4. Develop innovative packaging that differentiates your product and attracts the consumer.
5. Meet with channel partners and discuss the ways that they expect you to help them improve their business, and identify a realistic quid pro quo.
6. Instead of investing in whingeing, invest in setting up in-store taste tests and couponing that encourages trial.
7. Work in-store to identify shelf space and encourage shelf traffic.
8. Stop bashing your channel partners and competitors.
9. Focus on capturing share of mind, rather than share of spend.
10. Get your salespeople and key account managers to do the work you pay them to do – getting space in stores.