Years ago, I managed a portfolio of bar mixer products for a large beverage company. Mixers are beverages combined with liquor to make a mixed drink. My portfolio featured well-known brands, vast distribution and great tasting products. We considered our products to be high quality for the ready-made market and they were slightly premium priced.
The most promising category in the portfolio was our frozen mixer line. It was relatively new compared to our other lines and our market share was still rather low. The products were mostly purees used to make fruit daiquiris, but we also offered margarita, piña colada, mojito and a vanilla ice cream mix that was ideal for rich desert drinks. In addition to mixed drinks, these purees made delicious non-alcoholic specialty drinks, smoothies and shakes. We provided our customers with several recipes for each of these uses.
Before inheriting the bar mixer portfolio, a predecessor had licensed the name of our frozen mixer line from a popular spirits brand. The decision to do so made perfect sense at the time because it gave the product instant credibility with our customers. We sold these frozen mixers mostly to casual dining restaurants and bars. These customers were familiar with the brand name because they were used to dealing with spirits manufacturers and distributors.
One day an internal representative from one of our major fast-food customer account teams approached me about the idea of offering our fruit flavored mixers to their customer. They were looking for a tasty, easy to use puree for a new smoothie line they were developing. I knew that if this company decided to use our product, my mixer sales would explode. Their biggest complaint, of course, was the brand name. The fast food giant was leery of using an ingredient with an alcohol connotation to make smoothies for kids.
The opportunity to rebrand the frozen puree products for fast food restaurants was intoxicating. Pun intended. So, I developed new packaging using an existing, popular fruit juice brand the company owned. Most of the fruit flavored mixers would now be offered under the fruit smoothie label. There would be no changes to the puree, just new packaging. Existing customers would still get the same great product from the same great company. The new brand name had instant recognition and credibility as well. What could go wrong?
We were so excited about the sales ramifications of entering this new market that we expedited the production of the new packaging and merchandising. A letter from the President of our division was mailed to every existing customer explaining the change and assuring them that they could expect the same delicious product in the new packaging. I personally visited the food processing plant where the puree was to be poured into our new containers and observed the very first case of the smoothie line come through.
To launch the “new” brand, I conducted a road show promoting the change with training seminars at each regional office. Collateral materials were provided and samples were delivered for the sales staff to share with both new and existing customers. All bases were covered. Or, so I thought.
The very first week of the smoothie introduction, I received a call from a concerned sales representative on the west coast. One of our biggest customers was not happy with the new product. I was on the east coast and wanted this resolved quickly, so I suggested a conference call with the client to discuss the matter. I asked the sales rep to bring both “old” and “new” puree products to the client for a taste test and we would discuss the results while on the call. They were exactly the same product from the exact same batch. This should be easy to fix.
There were four or five people on the other end of the line, including my sales rep. They were comparing several flavors of each product. The client opened by declaring the new smoothie product inferior in taste to the former mixer product. He was clearly agitated. He believed this change was going to negatively impact his sales. How dare we change the product formula!
I explained the rationale and process and assured him the products were exactly the same. We typically only mix one batch each year, so both of the products he sampled came out of the same batch of puree. Each carton had a number on the label that indicated the batch from which it was filled. The only difference was the name on the label on the carton.
He didn’t believe me. In fact, he implied that I was lying.
On one hand, I didn’t like being called a liar. On the other hand, I wanted to keep the business. So, I decided to “cave.” After thanking him for his honest feedback, I admitted that I now understood the importance of maintaining the integrity of the original formulas to ensure the quality of our customers’ finished drink products. I apologized for any trouble this change had caused him and his business and promised to begin packaging the new smoothie flavors using their original formulas.
Everything I said was true. Misleading, but true. The product wouldn’t change because it was the original formula. I suspect he was the victim of the mere-exposure effect, where we tend to prefer things with which we are familiar. He loved the product and I changed it without his permission. In general, we value consistency and are threatened by change.
Something as minor as replacing a logo on the package was enough to effect this customer’s perception of the product flavor. This phenomenon is called Sensation Transference where we unconsciously transfer impressions of the package to the product inside. In essence, the product experience combines the product and its package.
An economist would refer to this situation as a negative externality, which simply means an unintended consequence. Creating the smoothie brand was the right decision for our business, but some customers just didn’t get it. No transition is seamless.
I should have anticipated the backlash from existing customers who loved the brand. In the spirit of simplifying our product offering, I simply made the switch. It was “sku” rationalization, but that is an analytical approach to an emotional situation.
People have relationships with brands. A good brand is more than just a product, it’s a promise and I broke my promise to my customers. In hindsight, I should have introduced the new smoothie brand and let the two brands live simultaneously for a while. This would have provided a smoother transition.
I never again heard from that disgruntled customer. I hope he became a fan of our “new” smoothies.
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