Friday, June 14, 2019

A marketing stroke of genius

I wasn't in the USA at the time that Softsoap was developed, so I didn't know its commercial and industrial background.  A recent article was very informative.

SoftSoap ... was essentially the first mass-produced liquid hand soap ever sold to the public, all packaged in a convenient bottle featuring a pump.

Of course, a key problem with this idea is that, while it was revolutionary in some ways, no part of it was original enough to patent.

From his previous experience having bigger companies copy his ideas not long after he made them successful and then taking over the market, Taylor knew that if this one worked out, they’d once again swoop in and use their economic clout to bully his product off store shelves.

. . .

Before launching SoftSoap, Taylor had made a crucial observation - there were only few companies in the United States at the time that actually made the kind of pumps needed. Of these companies, only one produced enough pumps suitable for mass-production on the scale envisioned here. And since there also wasn’t much in the way of a suitable international company that would be able to provide what was needed here quickly and at a competitive price, in effect, this left only a single choice for anyone wanting to sell liquid soap en masse using such a pump system. Thus, Taylor’s idea was quite simple – buy literally every pump the company had available for the foreseeable future. How many would he need to buy? It turns out about 100 million to keep the company (Calmar) busy at full capacity for about a year.

The problem was he didn’t have the required $12 million (about $37 million today) to place such an order. So he had to wait until after the product was launched and hope that it was a massive hit to give him the money he needed before his competitors decided to make their own copy-cat product.

. . .

... just as Taylor had planned, when the larger companies tried to release their own take on SoftSoap, they quickly realised that they couldn’t at first because some mysterious, freshly smelling, large ***** owning individual had called dibs on almost every suitable pump in the United States set to be produced for the next year.

With literally no competition to speak of during that period, SoftSoap quickly cornered the market seeing Minnetonka bringing in excess of $25 million (about $77 million today) within six months of the product launch, about double their former total sales across all their product lines during the previous six months. Within two years of the launch, sales for the company had risen to over $100 million (about $270 million today) and saw the stock price of the company multiple an incredible 15 fold.

There's more at the link.

That's ingenious!  If you can't stop competitors copying your product, stop them from packaging it for sale!  And they never saw it coming until it was too late.


1 comment:

Old NFO said...

Nicely done, and GOOD pre-planning!