CIRCLING DOWN THE CEREAL BOWL

Wendell Wheatless, general manager of Split Corn Cereal Company, has just summoned marketing manager Frank Foodie into his office.

"Frank, last month's sales results look terrible. As a matter of fact, the whole quarter is down. How do you explain this?"

"Well, Mr. Wheatless, the economy is a little soft and ....."

"Economy, my butt! Both Kellogg and General Mills are up."

"Well, we didn't spend as much money or coupons as they did and....."

"Of course we didn't. They're a lot bigger than we are. They always have, and always will, spend more money on advertising and promotion than we can. What I want to know is, why are they growing and we are circling down the bowl?"

"Gee, Mr. Wheatless, they seem to be having more success with their new products than we are."

"I can see that, Frank. What I want to know is why do we keep launching dogs while our competitors are hitting home runs? Don't our new products people eat their Wheaties in the morning?"

"Uh, sir, Wheaties is made by General Mills and it might be seen as disloyal if our people ate a competitor's product."

"Don't play with me, Frank. The board is getting restless and the investors are marching out the door. Do you want to follow them?"

"Well, sir, the problem is our new product effort. It just doesn't seem to work."

"Why doesn't it work, Frank?"

"Well, Mr. Wheatless, I've been checking up on this and I've found that our new products department has been following all the established guidelines and procedures. We use focus groups and quantitative research to ask the consumer what she wants. They we forward her wishes to the product development people, who come up with prototype products. Then we give the products back to the consumer and, uh,......"

"And what, Frank?"

"And she rejects them."

"Frank, let me get this straight. You ask Mrs. Consumer what she wants, you make the products she asks for, and then she rejects them?"

"Yes, sir. It's a very frustrating pattern."

"Frank, how long has this been going on?"

"For about ten years now."

"Ten years?!! No wonder we are going down the kitchen drain. Hell, we aren't even getting into the kitchen. What in sam hill does the consumer tell our researchers that she wants?"

"She's very definite, Mr. Wheatley. She says she wants good, healthful, nutritional cereal products. And she is emphatic that she doesn't want those products to have any sugar, salt or fat in them, or as little as possible."

"So, Frank, we make these nice healthful cereal prototypes without any sugar, salt or fat and what happens next?"

"She rejects our new products."

"Why, Frank, why?"

"She says they taste like cardboard."

"Frank, do our new products taste like cardboard?"

"I don't know, Mr. Wheatley."

"Why don't you know, Frank?"

"I've never tasted any."

"You mean to tell me that you have never tasted any of our new product prototypes?"

"No, sir. I don't want to prejudice the research results."

"I see. Now tell me about the new products our competitors are introducing so successfully. Are they healthy, nutritious, wholesome and all that other stuff the consumer is telling you she wants?"

"Oh no, sir. Kellogg and General Mills are putting out all kinds of products that are loaded with sugar, salt and fat. Why, some of them are over 35 percent sugar!"

"Frank, are you sure?"

"Yes, sir. Why, the General Mills Lucky Charms brand has sugar and marshmallow bits in it. It's sweeter than candy. Our research department studied it and found that over 99 percent of consumers said they didn't want this product in the store, let alone in their kitchens."

"How well does Lucky Charms sell?"

"Uh, it's a big seller, sir."

"Frank, don't you see what is happening? The consumer is telling you one thing and buying another."

"Are you saying the consumer is untruthful? Sir, this would really upset all our consumer research people."

"Better them than the stockholders, Frank."

"What should we do, Mr. Wheatley?"

"The solution is obvious. From now on we are going to make the kinds of new cereal products the consumer says she doesn't want."