This article originally addressed the seven worst marketing mistakes. But seven wasn't nearly enough. The list grew until it reached an unlucky 13. Since mistakes are discovered all the time, please think of this article as a work in progress.

1. "We'll make it up in volume"

Well, no, you won't. Volume helps absorb fixed costs, but low margin is low margin. It dilutes your entire financial picture, it infuriates your CFO or banker, and it generally fails.

Back in the early '80s, Procter & Gamble's Beauty Care business had a high cost structure. P&G thought it could fix the problem with volume.

Its launch of Ivory Shampoo and Conditioner as a value brand, supported by the category's first-ever $1 coupons, was the biggest introduction in hair-care history.

You couldn't walk into any store in the country without feeling dwarfed by the massive displays (88 cents for 16 oz. bottles!). At some retailers, you could walk out with a couple of bottles without paying a cent and without getting arrested!

P&G got its volume.

But its variable costs soared. Value brands need to keep delivering low price, and once you've taught consumers that your product is worth 88 cents, or nothing, they're not going to pay more. P&G found it needed to keep dropping $1 coupons to keep up the volume, and that ate up the thin margins.

Sign up for free to read the full article.

Take the first step (it's free).

Already a registered user? Sign in now.

Loading...

ABOUT THE AUTHOR
M. P. Friedman is founder and principal of FastGrowth Advisors (www.fastgrowth.biz), a Boulder, Colo.-based consulting and coaching firm. He tweets as @MPFriedman and blogs at AccelerateNow.biz. Reach him via mark@fastgrowth.biz