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.