Ben Pratt over at Market-Based Management Institute has a great post on his blog about selling chewing gum in Poland. Here’s an excerpt:
He said that several years ago the Polish division of Wrigley … had somewhere on the order of 70% market share of chewing gum sales in that country, almost none of it was the sugar-free variety.
Part of their sales and operations planning process was to document assumptions and revisit them at each planning cycle. One of the assumptions they documented was that as people grew older their preference would shift from sugar-based products to sugar-free products, and demographics suggested that the population was aging. At some point in the future they decided they’d have to change their mix of sugar / sugar-free products, but that time would be many years in the future.
Charles Koch’s Science of Success quotes George Will as saying, "the future has a way of showing up unannounced." And it seems to show up a lot faster than we expect.
Wrigley began seeing small but meaningful deviations to their expected sugar-free gum sales numbers. Because they were revisiting their assumptions each month, they got curious and began testing whether the sugar-to-sugar-free preference shift was really as far out as it they’d assumed. The result of their analysis caused them to recognize an opportunity: people in Poland were looking for sugar-free products, but not many companies were supplying them.
This information caused them to re-think their strategy and they immediately shifted their product mix almost entirely to sugar-free gum. They captured 90%-plus of the market.
I’m guessing that without a formal sales forecast as a benchmark, the company might not have caught the shift in trend. A minor product grows a little faster than expected; ho hum. But the trial-and-error economy demands that you watch for the little things that are growing faster than expected. Then be ready to nurture them into really big things.