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Reckitt's Racket. "We try to convince rather than tell consumers," says Elio Leoni Scott, cmo of Reckitt Benckiser plc, reckitt.com, explaining how it is that his company's profits are soaring while rivals Unilever and Colgate-Palmolive are issuing warnings, reports Deborah Ball in The Wall Street Journal (5/24/05). Adds Elio: "The whole idea is to show something that works before your eyes." Even more important, how that idea is implemented has nothing to do with conventional advertising strategies. While other companies may be spending the big bucks on glitzy campaigns, Reckitt favors infomercials and in-store product demonstrations.
For example, to demonstrate the "speed of death" of Mortein, mortein.com.au, its new cockroach spray, Reckitt's infomercial "shows bugs bunched up at the end of two tiny runways." Unlike the bugs sprayed by S. C. Johnson's Raid, the bugs don't "live long enough to escape." To show how its Spray 'n' Wash, spraynwash.com, removes tough stains, Reckitt staged in-store demos where they spilled spaghetti sauce and wine on clothes. However, the way Reckitt tells its stories actually is only part of the story. Reckitt also succeeds because of its specialty in products like roach spray, that "handle chores people dread." Because shoppers typically buy such items "just two to five times a year, they are less price sensitive than, say," laundry detergent, which they buy "20 or more times." In addition, because of the relatively low sales volume, "retailers can't be bothered to come up with private-label copies." Sweet.
New product development is another key piece of the Reckitt racket. The company tends to "for less expensive, low-tech innovations, sometimes simply poaching them from other areas ... Reckitt's Air Wick, airwick.co.uk, aerosol air freshener, for example, has an automatic release that sprays the fragrance every nine, 18 or 36 minutes. The company got the idea from professional air fresheners in hotels, gyms and public bathrooms." Says Elio, the cmo: "Research usually leads you to some cool technologies, but then you don't know how to apply it ... It is very costly and has a low return." Bottom line is, although Reckitt's R&D budget is just 1.5 percent of sales (compared to P&G's 3 percent), its profits rival much-larger P&G's, it has "posted average annual growth of 20 percent for the past four years," and "its shares are up 72 percent since January 2002."
JetBlue's Dyers. Funeral directors earn free round-trip tickets based on how many dead bodies they ship on airlines including JetBlue, US Airways and Delta, reports Anne Marie Chaker in The Wall Street Journal (5/17/05). This works out really well for the funeral directors: "I've sent my mother-in-law to North Carolina and back on coupons, brothers, nieces and nephews," says Art Halloway of the Holloway Funeral Home (presumably he means while they were still alive). It works out really well for the airlines, too: "The yield on transporting human remains -- I want to be sensitive when I say this -- is definitely worth our while," says Dale Anderson of JetBlue, adding, "I have to move close to 1,000 pounds of general cargo to equal the revenue of one human remain."
That's why JetBlue gives a coupon for a "free round-trip ticket" to mortuaries for every 15 dead people they "ship out." Dale "says that bodies now account for 18 percent of JetBlue's cargo revenue, compared with less than 10 percent a year ago. Delta, whose dead-folks business is growing at about 10 percent a year, says that "human-remains shipments represent less than 10 percent of its cargo shipments -- which still translates into 50,000 corpses per year." Says Tony LeFebre of US Airways: "It's a very important product for US Airways." Apparently that's because "so many families these days are spread out in different parts of the country. Care to guess which state generates the most frequent-dyers?
Right -- Florida: "Of the 170,000 people who died in 2004 in the Sunshine State, 14 percent -- or more than 23,000 -- were shipped to another state. In Texas, only about 5 percent of bodies were shipped elsewhere. In Michigan, only about one percent get shipped." So, it's great for the airlines, great for the mortuaries ... what about the families? After all, they (and not the funeral homes) pay for the shipping but are not included in these programs. America West, uncomfortable "that families pay the freight while funeral directors (grim) reap the rewards" killed its "dyer" program a couple of years ago. But none of that troubles Charlotte Mager, who shipped her late father on JetBlue. "Business is business," she says, "as long as the service was good ... why shouldn't they get the points?"
Tim Manners, editor
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