Convenience and Flexibility Are the Lessons to be Learned from L eggs


Convenience is a key characteristic that often separates the new products that are winners from those that are not. Whether you are looking at it from a trade or a consumer standpoint, the new product or service must be easy to buy. There are so many options available today that people are just not willing to go to a great deal of trouble to do business with you. You must make it easy for them.

From a trade standpoint, you must remove as many barriers to the purchase as possible. L eggs went to the ultimate extreme of consigning the product, delivering the product, and guaranteeing the sale. In your new product venture, make sure that you have done everything you can to make your offer one that your retailers cannot refuse .

From a consumer standpoint, make your new product or service very easy to find. You have to recognize that consumers will not look very hard to find you. L eggs did this with unique packaging and in-store displays. Think about what you can do to help your customer find your product. Help your customer through the purchase process as much as you can. Think about what you might do to help your customer during the most critical phases of the purchase cycle.

Whatever your category, you also must not lose sight of your consumers and their changing needs. Lifestyles are changing, and the consumer is constantly evolving. You have to keep on doing what you do well, but you also have to be willing to change and fine-tune as you move forward. Don t be afraid to innovate and improve your product. L eggs was one of the most successful new products introduced in the twentieth century. In the 1990s, however, the company recognized that the lifestyles of its consumers were dramatically changing with the movement toward casual dress. It is still number one because it was willing to be flexible and develop innovative new products.

Finally, L eggs teaches us that if you are to be really successful, you should not constrain your thinking in any way. You should be willing to look at every piece of the business model. L eggs was not just a new product story. It was a business story that went into every element of the marketing mix. Every piece of the business model was challenged, thrown out the window, and then recreated. This included what the product was like, how the product was packaged and presented, where the product was sold, how the product was positioned to the retailer, and even how the product was delivered.

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Summary Marketing Plan for: L eggs Hosiery Sara Lee Hosiery [1] 1969

MARKETING PLAN SUMMARY

  1. BACKGROUND. In the fall of 1969, the Hanes Corporation completed a historic marketing plan covering the selling of women s hosiery products in supermarkets and drugstores. The strategy was to make it easy for women to buy hosiery by selling this high-volume product in these conveniently located stores. There were no major brands of hosiery in the supermarket and drugstore channels at that time. The new brand was called L eggs, and it became so successful that it has lasted more than thirty years and today is the largest-selling brand of pantyhose in the world.

  2. MARKET REVIEW. A national profile study of the hosiery market showed that total retail sales in 1970 were expected to be $1.7 billion. Food stores were expected to account for 18 percent of the units, and drugstores were expected to account for 10 percent of the units. Private-label and unbranded merchandise dominated the food and drug outlets. No hosiery brand had more than a 4 percent share, and pricing was the main form of competition. There was no price/value relationship in food and drugstore hosiery because the quality varied from package to package. Unlike almost every other line of merchandise sold in supermarkets, hosiery had no widely available, premium-priced brand that could serve as the reference point against which other products could be compared.

  3. CONSUMER USAGE AND ATTITUDES. In focus groups, many women said that their experience with supermarket hosiery purchases had been that they d had problems with fit or had not been able to get the color they wanted. The research indicated that women wanted to have a supermarket brand that they could believe in and that would eliminate the confusion and lack of confidence that they felt concerning the current wide variety of hosiery offerings in these outlets. The consumer research also identified fit as the most important need in the marketplace for pantyhose. Women wanted pantyhose that fit well.

  4. TRADE PRACTICES AND ATTITUDES. In-depth discussions with personnel from major supermarket and drug chains indicated strong receptivity to the idea of a heavily advertised and promoted national brand of pantyhose that would be sold in supermarkets and drugstores. However, two obstacles were identified. Retailers felt that the existing programs of selling private-label or unbranded hosiery were very costly as a result of overhead expenses such as inventory financing, fixtures, warehousing, distribution, out-of-stocks, and in-store housekeeping. Another obstacle was service. Retailers were not looking forward to servicing a new brand on top of their own private-label or unbranded programs. One of the keys to obtaining broad-scale distribution, therefore, was to make it very easy for retailers to do business with Hanes.

  5. KEY STRATEGIC MARKETING OBJECTIVES. The overall strategy was to market this new brand as a packaged goods product, employing the same techniques that are typically used with other major branded items sold in supermarkets and drugstores. The strategy included maintenance of true brand identity by delivering products of consistent quality. It also included heavy consumer advertising to communicate a single-minded story and the use of proven consumer promotion techniques.

  6. MARKETING PLAN ELEMENTS

    1. Brand name . The new supermarket and drugstore hosiery venture was named L eggs. One of the reasons that the name L eggs was selected from a list of alternatives was that it worked well with a packaging concept that looked like an egg. The name also made interesting use of language by combining the word egg (which referred to the packaging) and the word leg (which was what the product was for).

    2. Product line. The original strategy was to market a compact line of women s one- size products in two styles (stockings and pantyhose). Hanes felt that this would avoid multiproduct confusion during the introduction of the program. There would be consistent product quality, with all products delivering a single primary consumer benefit ” good fit.

    3. Packaging. The package, which was shaped like an egg, was to be preemptive to separate L eggs from its low-quality competition.

    4. Pricing strategy. Pricing was a very important part of the original marketing mix. The original price points represented a good deal for the consumer. These prices were in the average price range for supermarkets and drugstores, making L eggs an excellent price/ value product compared to the variable-quality hosiery products offered in these stores. Consignment terms were offered to retailers, and this was felt to be a critical factor in obtaining broad-scale distribution.

    5. Sales and distribution methods . A unique system of direct store delivery that was completely controlled by the L eggs organization was developed. The inventory was totally on consignment. The display fixtures for the hosiery were provided by L eggs, and L eggs sales merchandisers serviced the display. This made it possible for L eggs to tailor the inventory to individual stores needs. The net result was pure profit for retailers, without the costs of inventory, warehousing, display housekeeping, or out-of-stocks.

    6. Advertising copy strategy. The primary objective of the initial L eggs advertising was to convince women that L eggs was the best-fitting hosiery they could buy. A single line was developed that summed up the entire L eggs position. This line was intended to create permanent brand registration in the minds of consumers by inextricably tying the product and its name together. That line was: ˜ ˜Our L eggs fit your legs. This statement played a prominent part in every piece of L eggs copy. During the introduction, the advertising also made a special point of informing women that L eggs was a supermarket and drugstore product.

    7. Advertising media strategy. Television was the primary medium used to introduce L eggs, along with some print advertisements to support the television ads. This advertising was front-end-loaded, with the largest portion of the advertising dollars being spent during the first few weeks of the introduction. Television was selected as the basic medium because of its ability to reach a broad segment of the target audience. In addition, television provided the opportunity to demonstrate L eggs s important product benefits visually. Print was used both to increase reach and frequency and because of its visual properties.

    8. Sales promotion. The main thrust of the original consumer promotion was to achieve trial and retrial by women in the target audience as broadly and as deeply as possible at a reasonable cost per woman . This was primarily done through the use of high-value coupons. The promotion plan consisted of sending high-value direct-mail store coupons to 50 percent of the target households four to six weeks after the start of the advertising.

    9. Publicity. Publicity was used to help spread the word. During the introduction of L eggs, a traveling spokeswoman was used to discuss the L eggs product and program with the media. The publicity program entailed personal appearances on television and radio plus selected interviews with key newspapers in each area. The introductory publicity program also included a contest for the most creative and/or humorous secondary use of the L eggs egg, with the winners and winning ideas publicized in the local media.

    10. In-store merchandising . The display was a tall tower that would hold only the new L eggs packages. Its unique design was intended to provide L eggs with a distinctive and permanent presence at retail and to preclude intermingling L eggs with other hosiery products. The ˜ ˜egg package and the distinctive L eggs display communicated the brand s newness, quality, and permanence.

    11. Test marketing. The L eggs program was tested in four medium- sized U.S. cities. A highlevel plan was tested in Milwaukee, Wisconsin, and in Sacramento, California. A lowlevel plan was tested in Kansas City, Missouri, and in Portland, Oregon. The four markets covered approximately 3.6 percent of all U.S. television households. L eggs was test marketed for seven months.

  7. FINANCIAL PROJECTIONS. Because of capacity considerations and the unusual sales/ distribution program, with its requirements for personnel and training, L eggs had to expand region by region, and required approximately three years to become fully national. The anticipated start-up costs and gradual buildup of distribution and consumer acceptance prevented L eggs from achieving a profit during its expansion phase. However, the program became highly profitable in the fourth year. The actual financial results exceeded all anticipations, as L eggs became the dominant brand of hosiery in the food and drug trade in every market it entered.

  8. CONTINGENCY PLANS. L eggs made the assumption that no viable competitors would enter the market. If competition did appear in one or more of the rollout markets planned for L eggs, the company had some flexibility to change the sequence of the rollout markets. This and other alternatives were to be considered only after careful evaluation of the competitive effort to assess its real potential impact on L eggs.

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[1] The brand name L eggs is a trademark of Sara Lee Hosiery, and is used with permission.




Powerhouse Marketing Plans(c) 14 Outstanding Real-Life Plans and What You Can Learn from Them to Supercharge [... ]aigns
Powerhouse Marketing Plans(c) 14 Outstanding Real-Life Plans and What You Can Learn from Them to Supercharge [... ]aigns
ISBN: 735621675
EAN: N/A
Year: 2006
Pages: 172

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