Learn from smart marketing people

I learn things by watching what smart marketing people do. Kraft foods has many smart marketing people working for them. They are the leading food marketer in the US so when I see them do something new I pay attention. What’s new at Kraft this summer? They introduced a new barbecue sauce brand name. It is called “The Pitmaster’s Choice”. Now on first look this is not such a remarkable thing for Kraft to do but look closer.

The product is only one flavor and one size – 28oz.  They put the product on a pre-built display that is marked “Limit Edition” and put a value retail price on it -$2.00.  The other thing that caught my eye is the formulation. First ingredient is sugar not high fructose corn syrup. No water is on the ingredient statement. This formulation is much more expensive than their regular barbecue sauce or even their premium brand Bulls Eye.

I have only seen this product in Wal Mart.  If this item is exclusive to Wal Mart that would be another fact to take notice of. Wal Mart for several years has merchandised the larger sizes of barbecue sauce off the bottom shelf. This was done to get consumers to trade up thus bringing Wal Mart a higher dollar sale and maximizing the categories profits. I have always thought this to be a good merchandising idea and have often wondered why more retailers did not copy this strategy.  Could this new Kraft item be part of that strategy? I had a Wal Mart buyer that would share his thoughts about the category and how to increase sales and profits. His idea was if the consumer has a larger amount of barbecue sauce they will use more sauce each meal and use it for more meals. In other words if you got it you will use it. I think this is the idea behind 2 liter soft drinks (or larger sizes).

Ok, so Kraft sales person knows the category strategy for barbecue sauces at Wal Mart. This is how he/she introduces this new item  to the Wal Mart  buyer; How would you like a Kraft barbecue sauce in an economy size, most popular  flavor, premium formulation, and value priced?  How would you like an exclusive on this product?  All you got to do is buy my pre-built wing pallet display three times in 2014 and we can make that happen for Wal Mart.

Why would the buyer make this deal? It has all the elements to make a huge category increase in sales and profits for Wal Mart. Not to mention there is most likely a media program that will include coupons and radio advertising. This product is pointed right at the serious barbecue sauce user (heck they named it Pistmaster’s choice) as well as the person reading product labels and all the negatives about high fructose corn syrup. Large size, value price, and on a labor reducing pre-built display. How could they say “no”?

One more point; The pallet display holds 150 bottles. Based on a $2 retail I estimate the unit cost to be $1.60 so the delivered cost on this display is $240.00. If Wal Mart puts this display in 4,233 stores three times in 2014 that would be a total sales of $3,047,760.00. That would make Kraft Pitmaster’s Choice the number 1 barbecue sauce skew in the US!  Not bad for one point of distribution!

This is more sales than I was doing with Big Show Foods my best year of a ten year run. My single best marketing tool at Big Show Foods was a pre-built display holding a combination of three flavors and a total of 600 bottles. Guess who purchased all the displays? Yep,  Wal Mart!  

One last thing to think about; what is the consumer psychology of putting “Limited Edition” on the pallet display SIX different times? You think it creates a sub-conscience desire with customers? I could write a book on this subject. 

I value your questions and comments.

Are you planning a large size pallet display for your brand? If “yes” call me   at 919 349 7874 or e-mail me at tom.price@earthlink.net for some cost information.