Killing the “dwarves” is good for business
Came across a great article on how killing the "dwarves" in your brand's product range can help you grow, in BA's Business Life magazine, by Steve Martin.
The challenge of trying to focus
One of the most common challenges on projects we do is the need to try and focus a brand's product range. Often, the range is cluttered with small and poorly performing products. These are versions, formats or sizes that don't add real value for the consumer. We call these "dwarves". They suck away attention and budget from the core product in the range, or Snow White.
Even when a team is persuaded of the need to kill these smaller products, the problem is proving that this is good for business. Push-back comes from the organisation, who fear that it will result in a loss in sales. Well, Steve Martin's piece explains why it can actually help you grow.
Less really is more
Martin is an expert on persuasion, having written a book on it called Yes! 50 Secrets from the Science of Persuasion. And his research show that having too much choice can actually backfire. In one experiment on a jam brand shoppers were exposed to two product ranges. The first had six flavours. The second had 24. Which produced better results? You might think the one with 24 flavours. Surely, more choice is a good thing. In fact, with the bigger range 3% of shoppers bought the brand. With the smaller range of six flavours a whopping 30% made a purchase.
Martin has not only experiments to prove that less can be more. He quotes a case of a well-known shampoo reducing its range from 26 to 15 varieties and experiencing a 10% increase in sales.
Why focus works
Works for consumers: Offering less choice makes it easy for shopper to decide what they want, and reduces the risk they get frustrated at trying to choose. Given that people spend on average 30 to 60 seconds in front of a shelf for a given category, this is a big plus. It makes it easier for them to "zoom in" and find the product they want.
Works for the business: Beyond the consumer benefit, killing the dwarves can have huge benefits for the business. It simplifies manufacturing and the supply chain. And it re-focuses of marketing and management on the core products
Works for the customers: As reported in Marketing this week, retailers are busy killing dwarves, reducing the number of lines across most product ranges. So, you can either wait for the retailers to get out the gun, and risk loosing the shelf-space. Or, you can be pro-active, and do it yourself. This way you at least have a chance of making a case to re-allocate the space to your better performing product lines. This is the approach taken by Unilever, who have simplified the Knorr stock cube range (removing 4 and 9 packs, and leaving just 8 and 12 packs). They have also killed Persil Washing Up Liquid, giving up on trying to compete with the dominant Leader Brand, P&G's Fairy Liquid.
In conclusion, killing the "dwarves" in your range can be good for business, with benefits for consumers, business and customers. And, better to do the shooting yourself before someone else does it for you.