Give thanks for your competitors, they make you better.

family praying for thanksgiving mealWhen I was in charge of sales at Absorption Corp our biggest competitor was KayTee, a Central Garden Company.  Our CareFRESH® brand small animal bedding was growing and our chief competitive product was wood shavings from KayTee.  We were exclusively a small animal bedding manufacturer at the time, and KayTee was the dominate brand of small animal diets and bird products in the pet specialty category. THEN…we heard that KayTee was introducing “something just like CareFRESH”.

CareFRESH small aniaml bedding
CareFRESH(R) pet bedding circa late 1990’s

Competitors don’t care what your business plan is. They don’t know what your sales budget is.  And their job isn’t to stay out of your way while you grow your market share.  Competitors have their own business plans and sales budgets and your best customers and products are their best prospects.  KayTee’s attempt to launch a competitive product against our flagship was a sign that we were doing our job, and that they were doing theirs.

Once we got past being mad that KayTee was getting into OUR market with a “me to” product, we recognized that we must be doing something right for them to notice us.  What we didn’t find out until later was the one of our largest customers had asked them to find something to compete with our CareFRESH® brand.  The retailer wasn’t used to not being able to play one vendor against another so wanted us to have competition in our category.

Knowing that a formidable competitor was coming into our space caused us to look at our products and pricing with an outsider’s point of view.  What would we do to attack us if we were them? The answer to that question was clear.  We had a 10 liter size with a $5 retail price and a 50 liter size priced at $20.  It was a big jump for a consumer to move from the small bag to the big one.  We decided that if we were them, we would come out with a product between our two offerings, both in price and in size.  Sure enough, when they launched their product they had a mid-size that was a better value than our small bag, but less money than our big bag.

3 different sized bags of CareFRESH (R) brand pet bedding
Three sizes of CareFRESH(R) brand pet bedding. Later 2000’s era package design

Looking at our products from a competitor’s point of view caused us to address a problem in our product offering.  It also allowed us to blunt the impact of the competitor’s product launch by preemptively introducing our own 23 liter package positioned between our other two sizes.  Since a new packaging machine to make the intermediate size was a six month lead time, we had to improvise.  We modified our 50 liter packaging machine and designed the package to seal on what would be the side of the bag rather than on the top.  Every other bag on market sealed on the top. It wasn’t an ideal solution but it did get the needed size on the market in about 12 weeks and bought us time while the new equipment was manufactured.

We were not happy that our competitor changed the status quo.  But the competition caused us to reassess our products, set a new course, and better meet the needs of pet parents and our retail partners.  The additional size added incremental volume, secured more shelf space, and weakened the launch of the competitive product.  In the end, we should have said “thank you” to KayTee for making us better.

Shawn

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s