Tag Archives: Prego

The 6 million dollar lesson in marketing

8 Jan
I came across Malcolm Gladwell’s video on Youtube talking about Howard Maskowitz important findings in the food industry that has revolutionized the way food industry caters to us, how we have more choices in food for eg 36 spaghetti sauce, 14 types of vinegar,10 types of olive oil.The main idea out of his talk was instead of thinking what is the PERFECT product to create to cater to EVERYONE ,we should be focusing on understanding there are clusters of consumers that if we created GREAT products for them will make them happy= increase salesHe further illustrated his point by talking about Howard Maskowitz work with Pepsi &Prego(spagghetti sauce) and in his work with Prego he found out that consumers like the following spagghetti sace

1.plain

2. spicy

3. extra chunky

This was an important finding because at that time, there were no extra chunky spaghetti sauce in the market, no one was catering to this need and Prego had followed Howard’s finding and cranked up production of extra chunky spaghetti sauce

Next 10 years,they made $6million out of the extra chunky spagghetti sauce

And this changed the way the food industry thinks about making consumers happy
1. Asking consumers what made them happy approach doesnt work because sometimes consumers arent able to articulate what they want

2.Market segmentation theory that if we embrace the diversity of consumers wants/needs/preference we begin to think of how we can better meet their needs/wants/preference and make them happy.

So what does this real life $6 million dollar lesson hold for us?Asking people what they want may not give us the easy answer to what they truly want if they themselves are unable to articulate their needs. In an era of fast cars, one click solutions understanding that consumers are not all the same changes the way companies operate.
And the fundamental question is should we rely on the industry’s old ideas and perceived notions of how to go about solving a problem? What would have happened had Prego had not heed Maskowitz ideas? Would there be 25 different types of spaghetti sauce and a variety of products in the food & beverage industry if it wasn’t for their willingness to break the mould of thinking how to make consumers happy?
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