The Case of Cleopatra Soap

In 1986 Colgate-Palmolive attempted to introduce a premium soap product to the Canadian market in Quebec.  The soap, Cleopatra, was such a huge hit in France that they had difficulty keeping up with demand.  With such a success on their hands, Colgate-Palmolive decided to replicate the accomplishment in another market.  They chose Quebec, because 80% of the population spoke French.

After 14 months, the soap failed to sell and Cleopatra had lost a significant amount of money.  The idea to take a popular product and try to sell it elsewhere seems quite logical on the surface.  After all, many multi-national companies do this all the time.  For example, there is hardly a place on the planet where you can’t get a Coca-Cola.  However, just because a product is popular in one place doesn’t mean that it will be equally sought after in another location.

In introducing Cleopatra to Quebec, Colgate-Palmolive made several errors.  The first, and most obvious, was assuming that a common language and ancestry means similar tastes and attitudes.  Failing to realize that people who live on different continents and in different environments may have a different perception about the products they choose was a mistake of vast proportion.  It turns out Canadians have a dissimilar view of perfumed soaps than the French.  It may not have been invented in there, but France has been the center of European perfume since the 14^th century.  Canadians, on the other hand, view the level of perfume to vary directly with the harshness of the product.  Abrasive chemicals and cleansing strength, whether accurate or not, isn’t the image you want to portray when going after the higher margin skin care segment.

Of course we don’t know what other differences in the markets may have existed at that time.  Maybe there was less competition in France.  The Canadian market was highly competitive with 15 main brands and 20-25 minor brands of soap.  Perhaps Cleopatra wasn’t the highest priced soap in France as it was in Quebec.  It could be that the French prefer baths while Canadians take showers four times as often as they bathe.  Possibly the French have a different view of Egypt since it was conquered by Napoleon and he lived for a time in Cairo. 

Colgate-Palmolive chose Quebec to sell Cleopatra because of its supposed similarity to France. Inexplicably, what little market research they did was conducted in Toronto.  This is probably the American equivalent of doing research in Philly to sell products to customers in Tucson.  Additionally, the market research that was done seemed to be poorly thought out and executed sloppily.  For example, simply asking someone if they would buy your product without bothering to mention it will be the highest cost soap on the market won’t lead to a very good data point.

The second biggest mistake Colgate-Palmolive made was in pricing.  Their goal was to compete against Dove, the most popular soap, in the skin care and high end soap market.  While it is true that having a higher priced product can signal higher quality, for an unknown brand selling a mostly elastic commodity type product a higher price can also signal that it is merely expensive.  By trying to out-Dove Dove, Cleopatra priced themselves out of the market.  In the market research, people liked Cleopatra and agreed they would buy the product; but they didn’t agree to buy it any price.

The third error made by Colgate-Palmolive was in the product launch method.  Their goal was to build such customer demand that retailers would be forced to offer the product.  Part of this plan involved heavy television advertising using the same commercial that ran in France.  While the commercial was entertaining, it didn’t have the same effect on sales that was experienced in France.  Again, poor market research.  More importantly, Colgate-Palmolive attempted to circumvent the normal method of offering allowances and discounts to retailers in an effort to maintain high margins.  Without the support of the retailers, they were putting all their eggs in the customer demand basket without truly understanding if the demand would actually materialize.

There were several other issues that Colgate-Palmolive ran into or failed to consider.  Their promotional campaign involving coupons for free soap failed.  Only 21% of the coupons were ever redeemed.  By only selling Cleopatra one bar at a time, they didn’t take advantage of the new trend, used by Dove and most others, of bundling several bars together.  Also, liquid soap was new to the market at that time and created even more competition in an already competitive market.  Finally, the organizational manner, in which some of the product managers didn’t fully buy into the soap for the Canadian market, didn’t facilitate a successful product launch.

Despite all these problems, there seemed to be a segment that really liked the product.  When tested head to head against other soaps by people who actually used it, Cleopatra did extremely well.  This isn’t surprising given the high quality of ingredients used.  It certainly seems reasonable that with a few minor changes to both product and marketing, Cleopatra could have been mostly successful in the premium quality soap business.

So what should Colgate-Palmolive have done to fix the problems associated with Cleopatra?  The German mathematician Carl Jacobi believed many problems could be solved by looking at them in the inverse.  His maxim was, “Invert, always invert.”  With that framework in mind, it’s easy to see what needed to happen to make Cleopatra a top selling brand.  In no particular order, the price needed to be lower so that it was at least as cheap as Dove, some of the perfume scent needed be reduced, the retailers needed to be brought in to help push the product, and the TV and coupon campaign needed to be reworked to be more effective.

I’m sure Colgate-Palmolive wasn’t the first company to assume they could take a wildly successful brand and simply market and sell it in the same way in another country.  They certainly weren’t the last.  Kraft did the same thing with the hugely popular Oreo when they introduced them to China.  The cookie, so much a part of Americana, wasn’t much of a hit.  By rethinking what tastes and sensations appealed to the Chinese, they completely altered what we think of as an Oreo… but now it sells.

Rethinking the Oreo for Chinese Consumers

The Best Super Bowl Commercial Never Made

Over the last several years, the Super Bowl has become an event that parties are planned around.  It is annually the most watched program of the year with no other competitors even coming close.  There are several reasons for this.  The game itself is obviously the most important facet for the majority of viewers, but the big name half-time entertainment usually brings in people who might not care as much about football as seeing Justin Timberlake, U2, or Madonna or even the occasional wardrobe malfunction. 

Another important part of the Super Bowl for many are the commercials.  On the Monday morning after the game people all over corporate America will gather around their cubicles to discuss, not the game, but rather their favorite ads.  Here's the link to an unmade commercial by Newcastle Brown Ale that won't appear on Sunday night's game, but just may make the list of best commercials anyway:  ifwemadeit.com.

When a 30 second ad costs $4 million, you have to question the true effectiveness of the advertising campaign.  Newcastle has been able to generate buzz simply by showing us what their commerical would look like, while at the same time making fun of Super Bowl commercials.  The best part?  It doesn't cost $8 million per minute.

Forbes:  The Best Commercial On The Super Bowl, And It's Not Even On The Super Bowl

David Ogilvy's Lessons on Advertising

The blog Farnam Street is one of the gems of the internet.  When so much of what is on the web is superficial, this blog aims to help you think better by using the knowledge which already exists.  The goal of the site is to "master the best of what other people have already figured out."  With that in mind here's a link of 38 tips to create advertising that sells by ad man David Ogilvy. 

Tip number one: "The results of your campaign depend less on how we write your advertising than how your product is positioned. It follows that positioning should be decided before the advertising is created. Research can help. Look before you leap."

Then, there is this nugget about branding from tip number three:  "The manufacturer who dedicates his advertising to building the most sharply defined personality for his brand gets the largest share of the market."

Jeff Bezos may have gotten some of his ideas from tip seven:  "Innovate. Start trends – instead of following them. Advertising which follows a fashionable fad or is imitative, is seldom successful." 

Finally, number nine discusses segmentation:  "Any good agency knows how to position products for demographic segments of the market – for men, for young children, for farmers in the south, etc. But Ogilvy and Mather has learned that it often pays to position for psychological segments of the market."

Bonus Material:  David Ogilvy's 10 Tips on Writing

Don't Ask Me What I Think

As I read the key takeaways on Apple’s comeback story in Business Insider, there was one that particularly stood out to me:  “Be confident - don't hold focus groups and ask people what they think.”  I immediately thought back to the Ted Talk by Malcolm Gladwell where he tells the story of Howard Moskowitz and his research to create the perfect diet Pepsi.  After doing multiple taste tests with different groups, he couldn’t find one particular level of sweetness that appealed to everyone.  As Moskowitz discovered, there is no such thing as the perfect Pepsi, only perfect Pepsis.

I still remember when I first heard about the iPad.  First, Apple revolutionized the way we listen to music with the iPod.  It didn’t take me long to get on board.  Then, they completely changed the way we communicate and use internet with the iPhone.  It was simply amazing.  But when the iPad came out, I thought, “How dumb an idea is that?”  Is it an extraordinarily large iPod or is it a big phone that can’t make calls?  I mean, really, who would want a computer with no keyboard, disk-drive, or USB port? 

As it turns out, I would want one of those computers with no keyboard.   Today, I can’t imagine life without my iPad, but if I had been a member of a focus group asked about my thoughts on this new tablet device… well, you know.  I’m reminded of what Gladwell said about coffee during his talk.  If you ask people what kind of coffee they like, we all say we want a bold dark roast, but in reality most people really prefer a weak milky coffee.    Thank goodness Steve Jobs was confident and didn’t ask me what I thought about the iPad.

The Best Stats You've Ever Seen

Hans Rosling’s 2006 presentation on statistics is one of the most watched Ted Talks.  The main point he makes is that data and statistics can give us a perspective about the world by showing whether what we think to be true is actually true.  He demonstrates this by doing an unofficial experiment with some of Sweden’s top students at a medical university.  The students are given a pre-test about which countries have the highest child mortality rate.  It turns out that a chimpanzee would score higher on the test than the average of Sweden’s top students.  Nope, they don’t have really smart monkeys or really dumb students in Sweden, they have misconceptions. 

The other point that Rosling makes is that data needs to be presented in a meaningful way.  It turns out he’s a master at presenting data and making statistics come alive.  His use of animated statistics takes what would be dry, dull, and difficult to digest data and turns it into information that is inherently understandable and amazingly interesting; so much so that over 8.5 million people have tuned in to watch a 20 minute video on statistics.