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If I Were President IIWP #2 – The revolutionary aerosol

September 28, 2007

lysolThis idea goes back to the time (1989) when I was the product manager on Lysol Disinfectant Spray (LDS) in Canada looking for ideas to grow my brand’s market share and profitability which led me on an intriguing path of discovery….

I was determined to elevate the Lysol spray franchise to the same level of per capita development as it was in the USA. Four factors were at play:

Product usage constraint: Part of the reason for the underdevelopment was due to the lack of mold/mildew control problems that the southern states have. Besides, that could be compensated for with more compelling creative/communication.

Price Premium: The dominant constraint was linked to the fact that LDS had a much higher price premium to the regular air fresheners – indeed it had the highest market premium to any other Lysol jurisdiction in the world.

A previous brand manager had conducted a pricing sensitivity test in the Maritimes (the wrong market to do a price test) and which proved that consumers would indeed respond to the new brand value proposition and purchased more product – over several purchase cycles – not just once.

Production Cost: Important factor to note is that in Canada the LDS production was outsourced to a third party. So an expensive production line (aerosol) became even more expensive as an outsource solution. That cost structure was simply factored back into the price.

Environmental concerns: In addition there was a growing sensitivity to the suspected impact CFC’s were having on the ozone layer – depressing category consumption as a result.

Find the impossible solution: So I was motivated to do the impossible – find a way of bringing down the price of the product, while still maintaining its ‘enviable’ margin structure and by doing so – allowing it to compete more effectively with the regular air fresheners (Glade, Wizard)

Options looked at:

Cheaper production:  I had looked at the option of sourcing product from the US parent’s production plant- but it was a cost prohibitive endeavor.

Cheaper product delivery system: Consequently I looked for different out-of-the-box solutions that might satisfy several criteria at the same time.

Pneumatic sprays were a non-starter: All sorts of squeeze and push spray mechanisms from around the world were evaluated. Trigger sprays were synonymous with cleaners and not suitable for the category. Finger sprays failed to propel the product sufficiently and tended to leak.

And so when I came across an innovative pump pressure system developed in Germany – I was intrigued and hopeful.

The solution?: The system worked on the same principle as a bicycle pump. The consumer would remove the cap which had a plunger type sleeve attached. By simply taking this plunger cap off and on (a total distance of movement about 3-4 inches) it would literally pump air and pressurize the container – a little. Office shelf tests showed that it would hold a reasonable working pressure for at least 3 weeks before requiring a complete manual repumping (8-10 strokes).

Knight to D6. Checkmate! An intriguing expensive concept – but was it really? The distinctive delivery mechanism would not be readily copied by the competition because their infrastructure was based on in-house aerosol production lines. They could outsource production, but their product pricing would have to go up toward me and further close the gap. Seemed like the perfect chess move if only I could make it profitable.

 To solve the margin problem, I turned to the enviropak/doypak popularized by P&G Canada at the time. In my business model, the refills would be sold separately from the delivery mechanism! Cost of production and packaging and transportation would fall dramatically because it would be on a liquid fill production line. Shelf presentation possibilities were significantly enhanced. Packaging graphics and selling space would be improved dramatically because of the larger surface area and the elimination of the hazardous/explosive symbols all pressurized containers must show.

Preliminary financial projections showed that we could have a viable product in place with a nominal margin investment in the first 18 month – due to the incremental cost of the delivery mechanism – but then a rapid increase to new higher margin level as the lower cost liquid fill/enviropak refill stock took precedence in the retail sales mix.

 

A bold, innovative out-of-the-box solution hitting all major selling points for the brand, creating a distinct positioning in the market place – a move that would transform the category and – in my dreams – put MY face on the cover of Rolling Stone.

 

Proof of Concept: Naturally there were risks and I had developed/proposed a series of proof-of-concept hurdles to ensure the concept was indeed viable with the consumers.

 

To get the process started I had asked senior management for an initial $5000 investment in order to conduct a two-stage test (focus group plus in-home usage) in order to gauge the consumer’s initial and protracted reaction. And so with a sense that the approval to proceed with the proof of concept would be quickly ratified and excitement build within the Lysol marketing community on this innovative approach, I presented my case to senior management.

 

What surprised me was how swiftly the proposal was turned down by the USA. The rationale being that it was ‘not an avenue we wish to pursue” That was it. No other explanation. I tried positioning the project as a pilot for North America. That if this succeeded then the USA could also follow suit and migrate to a higher margin structure, have a unique delivery platform to reinforce the products unique value-added point of difference in the marketplace…… Alas my entreaties fell on deaf ears.

 

“Miro we want you to bring up products that we have developed in the USA for the Canadian market place. Just ‘Canadianize’ things – we’ll do the product development.”

 That product format was never introduced on a mass scale – but about 10 years ago I started to notice it popping up in big box retail stores. The product had taken on a stainless steel shell and is the salad/oil sprayer you may have come to have in your home today. Every now and then when I take out our salad sprayer – I can’t help but have a quick flashback and wonder – what would have happened if I were president?  

I am most curious to know how you would have voted as a consumer. Please leave your comment/vote below.

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2 Comments leave one →
  1. April 16, 2008 3:31 pm

    What a great innovation example, with such a sorry ending.
    It’s a good example of the ways in which senior management can sabotage innovation, either by not making scope and constraints clear up front, or by seemingly arbitrary decisions to stick with the status quo.

    I would have loved to have a non-aerosol, and shifted most of my purchasing that way even before it was mandatory. (e.g. with hairspray) management might have been worried about the alcohol content in the refill packs though. I understand there are folks who will drink this stuff, although I personally prefer a nice pinot grigio.

    Thanks for such a good story.

  2. April 16, 2008 4:19 pm

    Thanks for the comment Susan.
    I should have mentioned that the alcohol used in any of these types of products is denatured – meaning that an extremely bitter substance is added to the alcohol to make it unpalatable for human consumption.

    But yes there are people who will abuse anything – such as drinking the alcohol in shoe polish, rubbing alcohol etc. That contingency would have been covered by continuing to use denatured alcohol and keeping a close monitor of stores in the “rougher” parts of town where this kind of abuse might happen.

    As for the rest – its now a matter of speculation as to the underlying why/why not’s.

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