Applied Marketing
103
tain quantitative and qualitative data must be
collected and analyzed.
The show audit should verify the projected
target audience. Sales personnel should have
maintained accurate records of sales leads, if that
was an objective, by name, title, etc, to verify
what percent of the projected target audience and
actual target audience were contacted at the
exhibit, A simple analysis can be conducted of the
dollar cost per contact by dividing the actual total
cost of participation at the show by the total
number of the target audience contacted. Management can also evaluate their sales personnel's
effectiveness at the show by determining the percent of the projected target audience actually contacted. If sales were an objective of the show, then
an evaluation of the effectiveness will be an on-going project. Dollar cost per contact can be translated into a dollar cost per sales result if an intensive follow-up of every show contact is conducted.
Costs can be readjusted every three months, or
longer if the sales cycle is long, to reflect the
return-on-investment to date, Follow-iqj of contacts should be emphasized to sales personnel
even if sales were not an objective. Otherwise,
show attendees may feel that their expressed interest was of no concern to the company.
For a complete evaluation of the show, the
company needs qualitative information such as
show attendees' reaction to meetings and
exhibits, average time spent in the company's
booth by a target audience member, and competition's activity at the show. This is subjective information and can best be obtained by surveying
a sample of the target audience, the show attendees and the company's sales personnel. Other
types of subjective information can also assist
management in the final evaluation: an analysis
of sales personnel effort and teamwork, an
analysis of the quality of the message as determined by requests for information and inquiries
after the show, the functional and aesthetic attributes of the exhibit structure, and the publicity
effort of other collateral materials.
The trade show exhibit can be a highly efficient
and effective media for communicating a message
to a target audience of current or potential customers at a relatively low cost. The success of
any trade show depends on the careful planning
and setting of objectives in order to best match
the message and the audience. It is imperative to
evaluate the effectiveness of the trade show as
well, since management is demanding and deserves precise measurements to determine the return on the trade show investment.
Endnotes
1, Rudolph Lang, Win, Place and Show: Effective Business
Exhibiting (New York: Oceana Publications, Inc, 1959), p,
19,
This article was developed from an essay that was entered
in the Association of National Advertisers' 1975 Media
Competition and is printed with permission.
Cannibalism in the Marketplace
WILLIAM COPULSKY
What appears at first to be a successful new product can easily tum into the wrong kind of success
when total market share is lost. This kind of cannibalism can best be illustrated by two well
known products. General Foods' Maxim instant
coffee, and Ford's Falcon. Both companies suc• ABOUT THE AUTHOR.
William Copulsky is a vice-president. Office for Operations with W, R, Grace & Co,, New York,
cessfully avoided the error of cannibalism in subsequent product launches. General Foods with
Brim and Ford with the Mustang, so that these
cases and their aftermath give two lessons on how
to cope with the cannibalism situation. While this
article deals only with market share, it should be
emphasized that share is not the only determinant of strategy—profit and return on capital
must also be considered. Share should not be
bought at the expense of profit.
104
The Instant Coffee Cannibal
After General Foods introduced their new
Maxim brand, their total market share for instant
coffee, excluding decaffeinated brands, slipped
from 42% in 1968 to 39% in 1972. In contrast.
Nestle in the same period raised their instant coffee market share from 13% to 24% of the market
with a new brand. Taster's Choice. Nestle's older
brand, Nescafe, dropped slightly from 12% in
1968 to 11% in 1972, while their new Taster's
Choice went from 1% to 13% in the same period.'
Maxim was a major new product development
for General Foods. The Maxim freeze-dried coffee
development began in 1954, and it took ten years
before the product was nationally introduced in
1964. GF has had over 40 years of experience in
the $2 billion U.S. coffee business. GF devoted the
largest capital commitment in its history to the
development of freeze-dried instant coffee which
consumers thought tasted more like brewed coffee
than spray-dried instants. It was test marketed for
43 months.^
"This new coffee could have been positioned
either as a brand-new category or as an evolution
of a leading brand. Maxwell House," said Harvard
professor of marketing, Martin V. Marshall.^
"They tried to trade on their own coffee reputation, but concurrently positioned the freeze-dried
coffee as a really different product in the market.
It was a perfectly plausible strategy." The name,
the packaging, and promotion clearly linked the
higher-priced Maxim to Maxwell House.
In the fall of 1966, Nestle introduced its freezedried product. Taster's Choice, to the U.S. market.
Taster's Choice took an opposite strategy from
Maxim. The consumer was never reminded of
Nestle's basic product, Nescafe spray-dried coffee,
and was made only dimly aware of the manufacturer.
Snapping Back with Brim
In the instant decaffeinated coffee field. General
Foods, contrary to their experience with Maxim,
increased their market share and avoided cannibalism. General Foods introduced two new
products to supplement their older brand, Sanka:
Freeze-Dried Sanka and Brim, and raised their instant decaffeinated coffee total share from 12% in
1968 to 18% in 1972. Meanwhile Nestle's Decaf
declined from a 2% to a 1% share in the same
period.^
Brim, introduced in 1972, is a freeze-dried decaffeinated brand which sells for the same price
as General Foods' Freeze-Dried Sanka and in blind
tests apparently tastes just like it. But Sanka had
Journal of Marketing, October 1976
an image of being medicinal and less flavorful
than regular coffee. Brim appeals to younger
people for whom Sanka had a geriatric medicinal
image.' This opened up new markets instead of
eating into established markets.
The Fault of the Falcon
Ford's Falcon was introduced as a compact car
in 1959. Its appeals were economy, safety, desirability, and dependability. The Falcon was promoted as the "new-sized Ford." Falcon became
a runaway success—apparently at the same
time Chevrolet introduced its compact Corvair,
with only about half the sales of Falcon:
Sales, Thousand Units
Percent of Total Compacts
1960
Corvair
Falcon
451
230
30%
13.5%
But in 1959, the standard-sized Ford and Chevrolet both enjoyed 22% of the total car market. In
1960, the standard Chevrolet still held a 22%
share; the standard Ford share dropped from 22%
to 13.5%, and to 13% in 1961.
Corvair was deliberately designed to be as different as possible from the standard Chevrolet.
The Falcon was designed as a miniature standard
Ford, and sold more easily to conservative buyers
who found it psychologically easy to switch from
a standard Ford to a "miniature Ford." The Falcon had lower costs both in purchasing the car
and operating it. For Ford, total sales suffered; for
Chevrolet, the Corvair was all new business.
While Ford's Falcon offered low cost, Corvair
offered European sporty styling with a rear
engine—competing head-on with European imports which were very popular in the United
States. Corvair isolated itself from all other American cars and positioned itself in advertising as
"America's only compact car that isn't just a
small echo of a big one." Ford sold more Falcons
but less Fords. Chevrolet sold Corvairs, and just as
many Chevrolets as ever.*
Making it with the Mustang
The Mustang was designed as a "Thunderbird at
a Falcon price." As soon as the first prototype was
completed. Ford's market researchers located 52
couples with pre-teen children who owned one
standard-size car. They liked the styling, but the
car was "impractical." Almost all over-estimated
the price. When they were told that it was $2,368
F.OJB. Detroit, each couple, without exception,
took another look and figured out how "practical"
the car really was.'
Applied Marketing
105
In April 1965, the Mustang set a first-year sales
record for any American car, 418,812, beating the
old Ford Falcon mark of 417,174. About one million were sold in the first two years. Whereas the
Falcon was designed to meet low-cost foreign
competition, the Mustang offered values appealing to a consumer segment not satisfied by other
cars produced neither by Ford nor its competition. The Mustang was aimed at a young on-theway-up group with an active life style, and it gave
them what they wanted.
The Mustang was not cannibalistic. It increased
Ford's total market, whereas the Falcon replaced
other Ford cars. Over 50% of trade-ins for the
Mustang were not Fords.^
The Lesson
The lesson to be learned is that cannibalism
results bx)m too close identification of a new
product with the launching company's older
products and established markets. New appeals
to new market segments will avoid eating one's
own market share.
Endnotes
1, John C, Maxwell, "Coffee Intake Rose in 1972 After
Sliding for Five Years," Advertising i4ge, July 23, 1973, pg, 68;
1973 data from Maryiin Bender, "Rediscovering the Recipe
for Profits," The New York Times, June 30, 1974, Sect, 3, pg, 7,
2, Lee Adler, "Time Lag in New Product Development,"
Journal of Marketing, (January 1966), pp, 17-20,
3, Maiylin Bender, "At General Foods, Did Success Breed
Failure?", The New York Times, June 11, 1972,
4, Maxwell, same as reference 1 above,
5, Anonymous, "Caffeineless Brands," Wall Street Journal,
September 9, 1973; Gerald Gold, "Competing Coffee Products From Same Company," The New York Times, February
14, 1974,
6, Mark Hanan, Market Segmentation, (New York: American Management Association, 1968), pp, 24-26,
7, Seymour Marschak, "The Mustang Story," in New
Products, Concepts, Developments, and Strategy, Robert H.
Scrase, ed, (Ann Arbor: Bureau of Business Research, University of Michigan, 1967), Proceedings of Sixth Annual New
Products Marketing Conference sponsored by the Detroit
Chapter of the American Marketing Association, March
17-18, 1966, pp, 34-43,
8, Lee A, Iacocca, "New Entry for a Fast Track," in The
Strategy of Change for Business Success, Sidney Furst and
Milton Sherman, eds, (New York: Clarkson N, Potter, 1969),
pp. 52-77,
Marketing Integration for Land Developers
DOMINIC J. VERDA
A marketing plan can be applied to residential
and commercial developments. Here the product line for analysis is similar. The consumer is
looking at units that have the following characteristics:
The housing unit is classified as a "shopping
good" product.' Therefore, the market tactic used
to enhance the sale or lease of a unit is product
adaptations.^-' The specific alternatives to differentiate a unit can be accomplished by:
• square feet of lease or living space
• accessibility of location to major transportation arteries
• stable economic area for property value
• minimum travel time to commercial shopping centers
• architectiaral design towards security
• use of unique building materials
• decorative trim features: hardware, lighting
and plumbing fixtures, color combinations,
kitchen equipment and flooring
• architecture of the units and buildings to the
site
• design of common use amenities: hallways,
parking layout, access to streets, security,
landscaping, formal entrances, recreational
facilities
Traditionally, the product differentiating factors
have received primary emphasis by developers in
• ABOUT THE AUTHOR
Dominic J. Verda is president of Development by Design Corporation, St. Louis, Missouri, a regional land
development and international mortgage banking organization.