KamLibrary - A Review Of A Product Launch Within The Multiples

In April 2001, Procter & Gamble launched ‘Iams’ in the multiple grocers – their dry, complete dog and cat food brand. Iams quickly achieved 90% distribution, with full retailer support and massive shelf-space. Until that date, Iams had been a premium niche brand only available in the specialist pet retailers and through veterinary channels.

So how successful has the Iams product launch been?

By the end of 2001, Iams had captured a 4 per cent share of petfood expenditure in the multiple grocers. This share was very quick to achieve but has remained relatively constant since August 2001. The Iams cat food has been more successful than the dog food brand, but this is perhaps to be expected given the long-term changes taking place in pet ownership. Statistics show that cat ownership is growing faster than dog ownership. In addition to this, dry dog food is often bought in bulk in the specialist pet food shops.

Compared to the dog brand, Iams Cat has achieved better sales, greater market share, more consumers buying the brand (penetration) and has a larger proportion of buyers repeat purchasing the brand. The cat food brand has accomplished this with less promotional support than Iams dog food.

Encouragingly, both cat and dog food buyers who have bought Iams have returned to the brand – repeat purchasing is strong. After only six months, more than 40 per cent of Iams buyers have made a second purchase and this level of repeat has remained over 40 per cent since August. Using ACNielsen’s New Launch Barometer to benchmark the Iams launch, this level of repeat purchasing is well above the category benchmark of 33 per cent of buyer’s repeat purchasing forty weeks after launch.

Perhaps, even more significantly, Iams has successfully managed to introduce new consumers to the brand and built consumer penetration (the number of buyers) at a rate which matches the success of the other key marketing measures. By the end of December 2001, 15 per cent of dog food buyers had tried new Iams Dog food (category benchmark 12.8 per cent), whilst more than 1 in 5 cat food buyers had bought Iams Cat food (22 per cent of category buyers compared to a benchmark of 12.8 per cent).

However, this rate of product trial amongst consumers is showing signs of slowing and Procter & Gamble need to concentrate on bringing in new buyers over this important medium-term period. This will help increase Iams’ rather static share of the market.

Educating consumers about the benefits of complete dry food has to continue to be pushed in order to speed up the trend in consumer purchasing away from wet pet food into the newer dry products. Approximately a third of all dog and cat owners still do not buy any dry pet food for their animals and it is these consumers that Iams needs to target to drive the brand.

In summary, the Iams launch has been a success and Iams is now an established brand.

However, with stiffer competition from wet single-serve pet food, failure to bring in the new buyers to the brand will result in Iams remaining a premium niche brand with a 5 per cent market share. In addition, without the requisite further growth, it is also questionable how long Iams can expect to continue to command the shelf-space it currently enjoys in the multiple grocers?

For further information contact ACNielsen (www.acnielsen.co.uk) on Tel. 01865 732275.

Date article published: 15/05/2002

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