Show the value

'Rich red Fountain Tomato sauce"

‘Rich red Fountain Tomato sauce”

Fountain Tomato Sauce used to be the market leader in NSW, daylight was second and third. This was a long time ago, and responsibility for the Fountain brand was my first real job as a product manager who had real accountability, and the power to make lasting brand and resource allocation decisions.

I walked into the job just as Franklins   (remember them) launched a “No Frills” tomato sauce,  at 0.69c on shelf against the  0.73 for Fountain. Our volumes immediately took a huge hit.

I still remember the details, and the near panic that ensued.

“No Frills” was the first real housebrand of the type that 25 years later would play a role in the demise of the Australian food processing industry.

The immediate instinct was to drop the price of Fountain, and compete aggressively, certainly that is what the sales people insisted on, but we took a different tack.

We increased the price, to 0.81c, improved the product a fraction by adding a few percentage points more of tomato paste,  and advertised, giving consumers a reason to pay the extra. When it was just 3 cents, chances were the products were pretty similar, but when the difference was 0.12 cents, consumers recognised they were not the same, both might be tomato sauce, but they were not  the same, and they had to make a conscious choice.

We set about telling people why Fountain cost more, and why it was a great choice over the “cheapie” delivering real value to them and their families, and they paid the extra, willingly. Our sales went up, margins were up, the MD was very happy, and I was over the moon.

Point was, we gave consumers a reason to buy Fountain, we told a story, entertained, informed, it was a significant premium, but not one that would break any budget, and the product was better, much better, and consumers felt better buying it and having it on their table.

“Rich Red Fountain Tomato Sauce, Australia’s finest red”.

Wish Youtube was around then, and I had copies of the radio ads, they are still  the ads I am most proud of over a long marketing career, with many successful ad campaigns.

About strategyaudit

A small marketing and strategy consultancy concentrating on the challenges of small businesses that make up the backbone of our economy. The particular focus is on the strategic and marketing development of small businesses, as well as the business and operational efficiency improvements necessary for day to day commercial survival. We not only give advice, we go down "into the weeds" to ensure and enable implementation.
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4 Responses to Show the value

  1. Len Norman says:

    Great story Allen and an excellent case study. Everyone knew Fountain and that it was the best. Len

    • strategyaudit says:

      Thanks Len.
      I recall it as if it were yesterday, and the lessons learned have shaped the way I have approached things for the last 30 years.
      However, as I look at the category today, the lesson was mine, not the businesses, as they subsequently forgot that their consumer wanted different things to their customer (the retail chains),and they lost their mojo, and any claim to leadership with it.
      Clearly a lesson in the value of corporate memory, it resides in individuals, rarely does it reside in the corporations memory, that is a leadership task too complex for most.
      Allen

  2. Graeme Forsythe says:

    What a great story. You haven’t explained why it was a great choice over the “cheapie”. Obviously does not resolve baldness!

    • strategyaudit says:

      Graeme,Good question.
      It was better technically, more tomato, sugar not corn syrup, less water, and the water in it held together with tomato solids not hydro-colloids (starch) more and better spice mix. That was the technical package, the really important part was the emotional package. In that we set about offering reassurance that the product was more likely to be loved by the family, it was a great choice as an addition to the family meal, weather that be a sausage at night, or at a BBQ on the weekend. We were so sure of the technical superiority of the product, we were able to poke fun at ourselves, and generate a laugh, which makes people feel good, give Fountain a place in the family, and importantly by inference, exclude others.

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