How “milking” a product led to its demise

Photo by Tadeu Jnr on Unsplash

Many years ago an entrepreneur in a town near Johannesburg came up with a new product to treat psoriasis. In its day the product was a breakthrough because it was about the only one on the market that gave long-lasting relief from the symptoms of this skin ailment. It was a relatively benign product because it did not do damage to your skin such as the cortisone-based products.

Over time, the original owner handed over the product to a pharmaceutical marketer who started selling it on a wider scale and nationally. But some time later this pharmaceutical distribution and marketing company began to harvest the product. In fact, there was no new product development. This was a great pity because money was not kept decide to reinvest into the product and to make it more effective. There wasn’t even any innovation in packaging, which would have been an advantage because the packaging was all right but it could have been far better.

Onward to the next pharmaceutical distributor and marketer. The second distributor and market was only too keen to get their name on the product but also used a harvesting pricing strategy. In simple language, this means that they jacked up the price each year until the product was overpriced and then sales naturally declined. Towards the end, the product was priced so high that unless you were a long-standing user, you would probably have given it a miss.

Then the product was taken off the market for good. When I called to ask what was going to happen to the product, all I was told was that it had been discontinued. No one, it seems, was prepared to even manufacturer and market it on a smaller scale. Now, there is nothing like it on the market any more.

But wait, there’s more … the product came back onto the market at an astronomical price. No one seems to know it anymore in store. It’s hard to find in pharmaceutical stores. One of these days it will be gone for good.

Those who have studied MBA marketing courses will know about a harvesting pricing strategy. It makes sense on paper, in a MBA marketing textbook, but the ethical approach to maintaining and building an effective pharmaceutical product doesn’t seem to come into the equation. No one thinks of the issues about denying access to such a product for sufferers of psoriasis. There is no tolerance these days for slow-moving product lines and if they don’t earn their weight in revenue and profit, they are bled to death and unceremoniously “discontinued”.

For the small business owner who has an effective product right now, things may be going well but what about the future? How will you ensure the longevity of your product without product innovation and even packaging innovation? Will you hand over your product to an external distribution and marketing company that can pick and choose from many other product lines? One way of avoiding handing over your product to strangers is to keep it in the family. But unless the family share your passion and know how to keep developing a product, it’s going to be a hard to ensure its life into the future.

Is your small business ready to sell products online?


Online auction sites have become a popular way...
Online auction sites have become a popular way to sell used goods in recent years. (Photo credit: Wikipedia)

A while back I tried to get a copy of an album that hasn’t been available for a long time in music stores or second-hand CD and record shops. So I had to do a search online and eventually could only find the album on Amazon. The album was “Pick up a Bone” by Rupert Hine and was only available in a Japanese edition. I placed the order and received the product about a month later.

That’s the thing about ordering physical product online: it takes long to deliver unless you are prepared to pay what is sometimes three times the value of the physical product to get it sooner. If it’s a non–essential product, something that is more nostalgic or of entertainment value, then it might be worth the extra long wait. But if the products is essential for your business or a component that you need urgently, and the product or component is not available locally, then you need to decide whether you have to pay the steep courier costs.

Continue reading “Is your small business ready to sell products online?”

Is your product and offering compelling in this market?

English: A bewildering choice of honey! Haverf...
Honey selling in France – (Photo credit: Wikipedia)

A small business that specialises in a range of products made from honey had a small stand outside a large Dis-Chem pharmacy, a health and beauty discounter. There were so many products made from raw honey and beeswax, together with the other ingredients, that the stand looked confusing. No potential customers were visiting the stand. What went wrong? Continue reading “Is your product and offering compelling in this market?”

Mining for consumer gold

ShopperThe Sandton City shopping complex recently hosted a Japan week that showcased a range of consumer products. Products ranged from musical instruments, motorcycles, motor vehicles and stationery to exquisitely designed gel nails.

Looking at the array of products, you can’t help thinking about how much investment must go into designing products that will be desirable for consumers. Take the Yamaha compact sound system, for instance, which comes in a range of exciting colours and incorporates modern technology such as Bluetooth, USB input and a docking station for smart phones. This compact sound system under the respected brand name of Yamaha is so desirable that you want to buy the product on the spot. Same goes for the Clavinova made by Yamaha which was played by an international musician with digital sound almost exactly like the original instruments such as the violin, drums and piano. Continue reading “Mining for consumer gold”

Simple products sell

English: Mosquito on finger This image is part...
Mosquito on finger (Photo credit: Wikipedia)

When we have high temperatures here in Johannesburg in the day and at night getting a full quota of sleep is difficult. It’s enough coping with 30°C during the day and up to 27° as late as 11 o’clock in the evening but the real challenge comes in the early hours of the morning.

You’re sleeping and are suddenly awoken by a sharp singing sensation on your shoulder. Then you hear a buzzing around your head. Next thing a mosquito has bitten you on the nose. That’s where it really hurts because of the many nerves in your nose. It feels like you’re in a dream on the Mosquito Coast.

Continue reading “Simple products sell”

Can you turn your ideas into gold (without a sweet-smelling corpse)?

Lao Tzu, traditionally the author of the Tao T...
Lao Tzu, traditionally the author of the Tao Te Ching (Photo credit: Wikipedia)

In ancient China alchemy was part of the larger tradition of Taoist body-spirit cultivation that developed from the traditional Chinese understanding of medicine in the body. The alchemists tried to refine base metals into gold believing that immortal life would be delivered if the “fake” or synthetic gold was ingested.

Alchemists wanted to transform things into something more valuable such as converting copper, lead, iron and tin combined with cinnabar (a mineral with a reddish brown colour often found at deposits of mercury, or more lethal components such as arsenic and sulphur into gold. Taoist alchemy was concerned with transforming human beings so as to give them longer life and bring them closer to the Tao. They worked in laboratories, grinding, mixing and eating various substances together in search of the magical compound. Continue reading “Can you turn your ideas into gold (without a sweet-smelling corpse)?”

10 reasons why you must not start a new product, service or business (unless you know how to deal with each)

Risky Business (soundtrack)

It might seem ridiculous to put you off taking your idea and turning it into a product or service and starting a new business.

But I’ve seen too many would-be entrepreneurs’ dreams lying shattered because they didn’t plan beforehand, acquire the necessary know-how, skills and experience before they took the leap.

New product development and starting a business is risky. Unless you personally manage the risk every step of the way, you could lose a lot more than your shirt.

No incubator or six-week seed workshop will remove that risk nor will it give you the know-how to start and run a money-making business. You only develop know-how by doing.

Here are 10 reasons why you shouldn’t start a new product, service or business (unless you have a solid plan to rectify these weaknesses): Continue reading “10 reasons why you must not start a new product, service or business (unless you know how to deal with each)”

10 reasons why you should start a new product, service or small business (and why the recession could be the best time to begin)

Tasty Food Abundance in Healthy Europe
 (Photo credit:

Why is it that we wait until the worst possible moment to act on important things in our lives?

We plan our annual holiday so late that all the best places are fully booked. We may have left our retirement planning for late in life only to find out that we should have started years ago. We always wanted to start a business of our own but we did nothing about it and now we are unemployed or too old to have the energy to make a go of things.

Here are some reasons why you should start a new product, service or small business: Continue reading “10 reasons why you should start a new product, service or small business (and why the recession could be the best time to begin)”

How much do you know about the market for your product or service?

The Secret Garden
The Secret Garden (Photo credit: @Doug88888)

I love peanut butter. But I have to be very careful eating the stuff because it is so fattening. I really can only eat it about once every two weeks or so. If I eat more, I’m going to balloon.

The peanut butter market has not grown to its estimated potential size if you look back at the forecasts and expectations twenty years ago. Walk into any supermarket and you’ll see that the shelf space occupied by peanut butter has shrunk. Continue reading “How much do you know about the market for your product or service?”

New Year’s resolutions for your startup

English: Two New Year's Resolutions postcards
Wish New Year’s resolutions were this simple (Photo credit: Wikipedia)

About the most stupid thing I’ve heard about New Year’s resolutions is: my resolution is to not make any New Year’s resolutions.

That resolution usually comes from someone who bumbles along from year to year with a trail of usual problems – overweight, excessive drinking, heavy smoking and unfit, not to mention being an obnoxious loudmouth.

Continue reading “New Year’s resolutions for your startup”