In the beginning there was just Campbell's Chicken Rice soup.
Today, in addition to Chicken With Rice soup, Campbell Soup Co. makes Chicken Gumbo, Chicken Noodle, Chicken Noodle O's, Curly Noodle with Chicken, Cream of Chicken, Creamy Chicken Mushroom, Chicken Vegetable, Chicken Alphabet, Chicken & Stars, Chicken 'n' Dumplings and Chicken Broth.
These dozen chicken soups and the 40 other varieties in Campbell's familiar line of canned condensed soups exemplify the colorful cornucopia of consumer goods that give American shoppers a range of choice unsurpassed in history.
But to competitors such as H. J. Heinz Co., which just this summer settled a $105 million antitrust suit against Campbell Soup out of court, Campbell's proliferation of three lines of canned soup with a total of 80 varieties is part of a calculated strategy to hog supermarket-shelf space, keep out rival brands and protect Campbell's near-monopoly in canned soup.
Whatever the merits of such charges, proliferation on the soup shelves of the nation's supermarkets is mild compared with what's going on elsewhere. Along breakfast cereal row, in the frozen foods display case, on the dog-and-cat-food shelves, and up and down most other aisles, a fierce struggle for shelf space and market share is being fought among the two to four big manufacturers that typically dominate each category.
Rather than undercutting one another on price, the manufacturers are locked in a big-bucks battle to see which can spin out the most new products, advertise and promote them the most heavily, and tie up the most shelf space.
And far from being new, most of the new brands, sizes, shapes, colors, flavors and scents being showered on the public are only minor variations on existing products, differing less in performance than in forms, packaging and advertised image.
Many new grocery products seem little more than novelties, such as the new line of Buitoni macaroni for children that comes in four varieties, depending on the macaroni's shape: Spacemen, spaceships, space robots and moon buggies. Other new products carry specialization to the edge of absurdity; witness Cycle dog food's four versions, one for each stage of a dog's life: puppy, middle years, overweight and senior citizen.
It would all be just amusing if consumers who didn't want the new products could avoid paying for them. But they can't. This is because the steep costs of developing, promoting and distributing the four out of five new items that fail to catch on with the public are inevitably loaded onto the prices of existing brands.
What's more, because each new brand threatens the market share of all existing brands in the same category, the existing brands must be defended with stepped-up advertising and inflates their prices as well. Manufacturers end up fighting harder for smaller pieces of the market and consumers end up paying higher prices.
Many manufacturers are starting to see that brand proliferation is growlingly counterproductive. Paul F. Enright, a sales manager for Coca-Cola Co.'s food division, recently took note in a food industry newsletter of "a growing concern within our industry about the rapid proliferation of brands, products, sizes and flavors, many of which bring nothing new to their respective categories, endlessly confuse the consumer, and dilute the high-volume sales of a few products to the modest volume of many. In our opinion, it is not in the industry's best interests to continue endless (and sometimes mindless) product proliferation."
Be that as it may, the Coca-Cola foods division seems more caught up in proliferation than ever. Since last June it has introduced and heavily advertised two new lines of drip coffee, two new varieties of fruit juice and two new lines of powdered drink mixes. The drink mixes come in a total of nine flavors and two sizes. The company also has added 10th and 11th flavors (peach and tangerine) to its existing Hi-C line of canned fruit drinks.
In the absence of a non-proliferation treaty, which many marketing men might welcome, no company seems willing to be the first to cut back on new-product development. The risks are too great, as the fate of Liggett & Myers Tobacco Co. demonstrates.
Once a formidable force in the cigarette industry, with a 20 percent market share 30 years ago, L&M was too late with too few new brands in recent years. Its market share has shrunk to 3 percent and it is in the process of being sold off by its parent, Liggett Group, Inc.
Liggett & Myers's slide to obscurity can be traced to its poor adjustment to the revolution in marketing that got started about 1950. Until then, nearly every consumer-goods category was dominated by a few standardized national brands. Men smoked Camels, Luckies or (Liggett & Myers') Chesterfields, all uniformly 2 3/4 inches long, unfiltered and soft-packaged. Women washed with Ivory, Lux or Palmolive. Children ate the same breakfast cereals as adults, adding their own sugar, And the entire family drank Coke from 6 1/2-ounce bottles.
From about 1950 on, while continuing to mass-produce standardized brands, manufacturers found even greater profit opportunities in segmenting mass markets and supplying specialized goods for each segment. This increased the costs of doing business, of course, but consumers went along because they had more discretionary income to spend on new products promising convenience, novelty or prestige. Television provided a powerful medium to create rapid consumer acceptance for new brands. And grocery stores expanded to handle the outpouring of new products.
While brand porliferation seemed to suit the affluent and expansive 1950s and 1960s, declining disposable incomes in the economically troubled 1970s have put the market ploy increasingly out of joint with the times. Consumers pinched by inflation are more and more looking for bargains in basics rather than new faces on old products. Shoppers are economizing by buying fewer national brands, according to a recent study for the Food Marketing Institute, and more private-label, or store, brands, which are priced lower. And in the 25 percent of supermarkets that within the last two years have started to stock "generic" grocery products, shoppers are also turned to these even cheaper no-frills, plainly wrapped items.
Supermarkets are as effective a brake as shoppers on the proliferation of high-priced national brands.The typical supermarket has quadrupled its stock, from 2,500 items in 1950 to nearly 10,000 today, but not even the largest can accommodate the deluge of new products.
Since 1971 when A. C. Nielsen Co., the market researchers, began tracking the introduction of new products into supermarkets, it has counted 53,000 new brands, sizes, flavors and other variants that have to be stocked separately if they are to be handled at all. And the Nielsen count excludes thousands of locally produced bakery and dairy products, carbonated beverages and snacks.
Little wonder that Progressive Grocer magazine recently reported "signs of increasing retailer resistance to new items." The Alpha Beta chain of 300 supermarkets in California and Arizona accepts fewer than 10 percent of the new items offered it, says buyer Pat Bobzin, and "normally, we have to throw out something in the same section to make room."
The biggest manufacturers and advertisers, such as Procter & Gamble Co., General Foods Corp. and Bristol-Myers Co., stand the best chance of winning supermarket acceptance for their brands. This is because of the ten of millions of dollars in advertising, cents-off coupons, free samples and introductory price discounts to retailers they can put behind each new brand. Such pre-selling is hard to resist, for no supermarket wants to disappoint a customer who asks for a new brand and drive her down the street to a competitor.
Many shoppers revel in the enormous variety available, but an increasing number seem to be losing patience with sorting through the bewildering array of brands, sizes, flavors and forms clamoring for attention.
"The expansion of product variety in supermarkets has served only to confuse the food shopper, make shopping more difficult and time-consuming, and force the shopper to make decisions she would rather not make," says William Nigut, a Chicago supermarket consultant. "The conventional wisdom has been that the longer you keep the shopper in the store, the more she will buy. But many shoppers get so frustrated and aggravated that they have begun to leave the store before finishing their shopping."
Gordon F. Bloom, a Waltham, Mass., supermarket owner who also is a senior lecturer at Massachusetts Institute of Technology's Sloan School of Management, agrees. "Merely walking around large supermarkets is a time-consuming undertaking," he notes.
The back-to-work movement among housewives is also bad news for heavily advertised national brands. According to a survey by Cadwell Davis Savage, a New York advertising agency, when other family members do the shopping, they pick a different brand than mom would have 54 percent of the time. Even more "shocking" to the ad agency: 36 percent of the husbands "told us all brands are the same, so they just picked one."
Husbands who see little difference between brands apparently have good eyesight. Lee Adler, a former New York ad agency executive who now is a professor of marketing at Fairleigh Dickinson University, says that differences among brands "tend to occur not so much in basic product benefits as in packaging, brand name and imagery, advertising strategy, distribution and sales promotion." As a result, advertising copywriters face "a desparate struggle to find a competitive edge" for their brand over essentially similar competitors.
Unfortunately for the copywriters, few new brands offer meaningful improvements to crow about. William D. Tyler, a columnist for Advertising Age, recently lamented a "growing trend" in new-product introduction of "warmed-over variations" on old products: "New products have become, slowly but surely, less new. The greater growth has come about in line extenders: New colors, new flavors, new scents, etc."
Pat Bobzin of the Alpha Beta supermarket chain notes the same thing. "Probably less than 5 percent of the new items presented to us are really new ideas; the rest are variations on what already esists."
Many observers blame the decline in innovation on the transfer of responsibility for new-product development from the research and development departments of large corporations to marketing experts. The marketing experts' criterion is less whether a new product adds real utility and more whether consumers can be convinced that it does.