Patience certainly has its benefits, a perfect example of that is McCormick and Company. After being in business for 123 years, it chose the right opportunity to expand its operations into the retail industry by having its own retail store through which it could reach its customers and convey its true essence to them directly. The statistics do not lie as McCormick seems to be experiencing its greenest pastures ever.
The essence of the brand
For its first several decades, McCormick was mostly just a spice maker by catering to individual as well as industrial needs, over the years however it has connected with its customers on a much deeper level by introduction of its innovative marketing strategies such as placing spices next to relevant foods in aisles and the ‘flavor forecast’. This shows that the company just does not want to be present behind the scenes, but is taking an active interest in what would actually please the customers. All successful brands strive to create long term relationships with their customers; the brand loyalty that McCormick thrives on is a reason for it to be doing so well.
These activities have transformed McCormick’s image from just a producer of spices, to an expert of spices. Custom produced spice packs, letting consumers know the flavors that would be most appealing in a season and flaunting its vast experience by providing quality advice truly justifies the company as being the market leader in the spices category.
Product lifecycle stage
The fact that the company has ventured into its first retail store after so many years shows that it is in the growth stage and that there is so much more for it to achieve. The $71 million that was spent on advertising in 2011 is also a characteristic of McCormick being in the growth stage. A company only takes on so much promotional efforts once it has a sound financial background to go hunting for better sales figures. The good part about opening the retail store after considerable time is that the company took its time in mastering the market it was in. By gaining a thorough understanding of the spices market and its customers, McCormick was able to lay strong roots and then gradually make its way up the ladder.
On an internal basis McCormick revenues grew by 10.8% in 2011 to $3.7 billion and if we look at the market, revenue for individual spices grew by 4.1% and for pepper, salt and seasoned mixes it grew by 6.8%, 2.1% and 1.3% respectively. These figures are enough proof that the market for spices has potential and so does the company and there is time before maturity is reached. It could be argued that this has happened only because the recession forced people to change their habits, on the contrary though much of this has to do with changing tastes and since the market is food related, it will always have potential.
Growth strategy
The opening up of the retail store is a clear vertical integration strategy being followed by the company. At first McCormick was the initiator of the supply chain by dealing with only production, but now it has widened its arms and created a presence in the retail market as well. The best thing about doing so is that it can now communicate the way it truly wants to its customers and the promotional efforts certainly showcase that being done.
Also the increased advertising expenditure and marketing efforts to gain more share of the market are a sign of market penetration being done as well. The company is affirming its position in the market and trying to reach more and more customers every day. The share and brand loyalty that it has already created is vast enough, however the hard work should not stop there as complacency has often proved to be a downfall for many brands in the past.
My own thoughts
Reading the article I believe that the marketing efforts put in by the company are a breath of fresh air. Not many would have thought of so much brand play for the customers with regards to the product being spices. The kitchen inside the store, the ‘flavor print analyzer’ and ‘guess that spice’ are absolutely amazing techniques to make customers love the brand and no wonder they remain loyal to McCormick. The only recommendation I would have is to not play on the customers’ loyalty by increasing prices way too much in the future. I believe it’s a give and take relationship and the brand should care for their esteemed consumers.
