Thursday, 2 June 2011

A crooked idea to increase sales-Lack of business ethics and negative impact on brand loyalty

The out of box ideas for sales

There was a toothpaste manufacturing company, and once the senior executives had gathered for increasing sales. There was brainstorming on different ways by which they could increase the sales of their tooth-paste tubes.

Some suggested:

  •  Hire a celebrity or any film or sports personality to promote the brand.
  •  Increase cash and other incentives to whole seller and retailer

They could not find any viable solution quickly.

Somewhere within the meeting, a junior, not-so-important employee came up with a unique idea. His idea was powerful enough to increase sales without investing heavily. He suggested that the 'mouth of the tooth-paste tube be widened to double its current size'. He justified that whenever the consumer would squeeze the tube, more tooth-paste would flow out from the tube, which would exhaust it faster and compel the user for a quicker re-purchase. Thus, the product would start moving faster !

Initially, some senior scoffed at the idea thinking it was too immature, but later they realized that it was actually a brilliant suggestion ! The company went ahead and executed it,...and lo, its sales did increase substantially !

Now this strategy of the company is excellent and it gave very good results and profit in terms of numerical numbers. But it is a crooked idea devoid of any business ethics.

Consider this:

  • Sooner or later customers will realize that their tubes of tooth-pastes getting emptied quickly and they are spending more on tooth-paste tubes for a monthly budget. Please do not make a counter-argument that more toothpaste on the brush will result more whiteness of  teeth so that even you will not need electricity at night to light up your home and office.
  • It will create negative impact in the mind of consumer for the brand. Brand is getting stigma of cheater.Since toothpaste purchasing decision of most families are in hand of housewives who literally run the household organization, it is very easy for them to switch brand loyalty. Please note woman are very quick to change their mind,clothes,fashions and in some rare cases husbands, if given the opportunity.
  •  It is a short-term strategy and having long-term negative impact on brand-loyalty.
  • Other positive competitive brands will rise and will flourish more, when the secret will be discovered.
 The right solution would have been:
  • Make a scheme that if empty tubes of the same brand toothpaste is collected regularly by the family and given to the retailer , say 12 empty toothpaste tubes,  customer will be given one tube completely free.
  • This solution is going to have positive brand impact and will increase customer loyalty and it has the noble concept of ethics that "Never cheat your customer, sooner or later they will find out."

Akhilesh Maurya
akhileshm@hotmail.com

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