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Big Data and Living in an Age of Data

The Data Age - Big Data and Living in an Age of Data

What Pasta Sauce can Teach Product Management

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Today when you visit the supermarket, you will see a variety of pasta sauces available. There are so many varieties that they have to stock an entire aisle of pasta sauces. But it wasn’t always like that. In fact just 30 years ago, you had basically one choice. The story of how we ended up with so many pasta sauces is a great lesson for product management.

Back in the early 80’s there was a pasta sauce war going on between Ragu (the kings of the pasta sauce industry) and Prego (the number two guy on the block). Prego wanted to capture more marketing share and did many focus groups to find out how. When they asked people what kind of pasta sauce they like, everyone pretty much gave the same answer; they like a sauce that was a little bit running. It’s the classic pasta sauce. It was the sauce that everyone knew because that’s what they had been eating and buying for years.

Along came Howard Moskowitz, an experimental psychologist. Prego hired him to find an angle they could use to get an edge on Ragu. Now Prego believed they knew what that angle was, find the perfect sauce and they could beat Ragu. It was like trying to beat Ragu by being more Ragu than Ragu. Moskowitz knew that such thinking is actually a recipe for failure. It’s like trying to beat Amazon by being more like Amazon. Sorry, but no one can out Amazon at its own game. And Moskowitz knew this.

Instead of finding the perfect sauce, Moskowitz told Prego to launch a variety of sauces. What Moskowitz discovered was that consumers liked variety when given proper information. If you take the bulk of consumers, they are not innovators, they go with what they know. And for Prego that was the classic pasta sauce. But when you really drill down you will find as Moskowitz did, consumers can tell you a lot, if you know how to ask the right question and then define the right why. At the end of the day, everything is driven by the consumer, but they don’t always know how to express their preferences.

What ended up happening is that Prego launched spicy and chunky sauces and people responded by buying these new varieties. As a result we had a pasta sauce war break out in the late 80’s and 90’s resulting in going from a small section in the supermarket to a massive selection.

What Prego learned is something product managers can learn from as well. Prego had relied on so called “experts” to tell them what consumers wanted and allowed a competitor, Ragu, to define what is a pasta sauce for them. I see this a lot where someone in a company either by authority of position or just happened to have the ear of management, ends up defining things without customer input. Most often than not, the so called experts are poor predictors of the future. Case in point, a recent Wall Street Journal article showed that a bunch of housewives beat most fund managers when it came to picking the best performing stocks.

The sad truth is, often a product team will act as if they know best. The customer knows best because at the end of the day, a product is really just an experience you are selling and if you can’t sell a customer the right experience, you have nothing of value. Realizing that there are many experiences you are selling and many ways in which people want to have those experiences, is really what product management is about. It is ALWAYS about the customers. A product that doesn’t have the customer at the center is not a real product, just someone’s overpriced opinion that is a project. And projects don’t sell.

Customers do know what they want, they don’t always know how to express it. That’s what companies need to learn is how to get that information from customers. If someone has never had chunky pasta sauce, how can they articulate that chunky pasta sauce is what they want. You need to help define that for them. But don’t assume you know best, the customer does, it’s your job to understand what they are trying to say, when they lack the terms to really express what they feel.

 

 

Byline: Edward Chenard is an expert in big data and personalization. If you would like to contact him, reach out to Edward@crosschannelprairie.com.

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