Ready, fire, aim

Household & Personal Products Industry, Sept, 2003 by Suzanne Grayson, Bob Grayson

IF SOMETHING SEEMS WRONG with that sequence, it's because the chump who coined it didn't believe in developing a strategy or even understand the process. A business strategist, Henry Mintzberg (What? You never heard of him? He's published 10 books and about 120 articles. All that and a Ph.D. from MIT!), said, "Strategy is not the consequence of planning, but the opposite; it's the starting point of planning."

What's Your Objective?

As you all know from Marketing 101, first set objectives. Next, evaluate possible strategies to achieve those objectives. Finally, plan your tactics to achieve those strategies. This is a simple sequence, but too often companies "think tactics" (executional ideas), without tracking back to strategies and objectives.

That quote started us musing about the different types of strategies and had us wondering how much of a business day is spent putting strategies under scrutiny--instead of promotion plans, ad copy and endless meetings devoted to "discussing" the work that you should be in your office, "doing."

With hindsight, it is always possible to pinpoint a bad strategy. Just think of Peter Drucker's famous words, "Nothing is quite so useless as doing well, that which should have never been done." To get your mind in gear, think about Revlon's foray back into hair color with its 10-minute application. Maybe not as significant as a cancer cure, but certainly a product improvement/ real and perceivable product benefit.

Obviously, prior management felt the need to go beyond Revlon's core strength in color cosmetics. Almost simultaneously, it tried to get some skin care traction with a vitamin C line, but without strong and continuous promotional backing, that product slid into oblivion.

Getting back to the hair color strategy. The two dominant players, Clairol and L'Oreal have about 90% of the retail market. Each has several brands, each has very deep pockets, and each is relentless about spending to achieve market share, (especially true with P&G now in the picture.)

Strategically, is this a place for Revlon to spend its time, money and R&D resources? And, how do you know when a strategy is flawed? What we need to determine is the best strategy when measured against available opportunities.

Let's take a look at how you might go about it. Fortunately, there are very distinct marketing strategies with very distinct segments: Here are a few (With an assist from P. Rajan Varzdarajan, Texas A&M.):

New product development strategies:

* Proactive

* Reactive (fast follower)

* Innovative

* Imitative

Distribution-promotion strategies:

* Push strategy

* Pull strategy

Product strategies:

* Brand extension strategies

* Multibrand strategies (within a category)

* Brand positioning strategies

* Brand repositioning strategies

If we were to assign strategies to the 10-minute Revlon Hair Color development and introduction, we might say, "Innovative and Brand repositioning" for sure. But is it a push or pull strategy? Management would surely like it to be "pull" but that requires very big spending. So, it will have to settle for a little pull, and lots of push. But, then it hits against market share strategy. Corporations (and now mass retailers), are focused on a 1-2-3-and-out strategy. Either a brand is 1, 2 or 3 in the marketplace, or out it goes--although some of Revlon's competition has a 1-2-and-out strategy.

A digression: Some years back, we were involved in a large product development project of the scope of Olay's introduction of cosmetics. Over the period of about 14 months, we made several progress presentations to the president. He always started the conversation with, "tell me again, why we should do this?" In other words, was something happening internally or in the marketplace that negatively impacted our original decision?

On the other hand, in the nail enamel category, Revlon's new 10-day product can drive it to the No. 1 spot. Think about that for a moment. Can you see a corporate strategy beginning to develop? In the areas where you have residual strength, an innovative product can increase share, sometimes dramatically, (think Outlast lipstick). In categories where you are either weak or not present at all, you need a very big war chest to start a fight.

The importance of strategic development as the starting point becomes very evident when there are many innovations available from a very productive laboratory and limited funds. If Revlon poured some of its hair color money into several innovative nail products it could, quite possibly, take some share back from Sally Hansen--which has a very clear strategy--dominate the nail category.

So we are back to Peter Drucker, Revlon did it well, but should it have been done at all?

The problem with products which have a discernable attribute--stay on longer, won't smudge off, last forever, the up-market colors et al.--is that once a competitor knows the attribute which is driving that particular product, the clone may be in the stores in very short order.

On the other hand, beyond an unassailable patent, the only product position that can't be copied is fragrance. Fragrance has many virtues, the most important of which is that whatever attributes are associated with it cannot be preempted. Think Charlie, Giorgio, Youth Dew, (dare we say, "J Lo"?). And, there isn't much new competition in mass. (Note: There were so few entries in the mass fragrance category for The International Package Design Awards to be presented during HBA Global Expo, that we had to condense the mass and limited categories into one).