From 1882 to 2007 Argo reigned king of the corn starch category. For 125 years the $33 million company was an unchallenged brand leader. But no competition also meant no innovation. Although the product evolved, it was displayed for 125 years in the same cardboard box with the same Indian princess emblazoned on the front.
Babs Zepaltas, senior research manager at ACH Food Companies, which makes Argo, as well as other popular brands like Mazola, Spice Island, and Fleischmann's, called it a "product parody."
Then in 2007 Argo received some unwelcomed competition in the baking aisle. Clabber Girl, which for years only sold baking powder, launched a new product: corn starch in a canister. Zepaltas says the Clabber Girl's superior packaging, expanded store distribution, and lower price spelled trouble for Argo. The company suddenly saw shipments decrease by nearly 8 percent and its $33 million market share began to slip.
"We could sit back and do nothing and watch profits decline, or invest and maintain the number one position," Zepaltas says. "The challenge was simple for us-we had to stop the bleeding of share and products."
Argo's objective was straightforward: keep its premium position and distinguish the product from Clabber Girl by rebranding its packaging and label. The company knew from monitoring customer service complaints that people didn't like the packaging. The tiny box made it difficult to scoop out the corn starch and didn't allow for freshness long after the contents were opened.
Argo developed a four-step research plan involving high-level discovery focus groups to allow consumers to drive the rebranding effort. Alison Murphy, partner in Murphy Marketing Research/Trend Town, helped to direct the market research. She says that during the initial stage they administered six focus groups in total, in San Francisco, Chicago, and Dallas. Eight people attended each group and received "homework" prior to attending. Their assignments were to shop the baking aisle and buy Clabber Girl and Argo products, then bake or cook with both corn starches for two weeks and keep a diary. Murphy says they were surprised to learn that the customers used corn starch not just for cooking, but also for pet care, cleaning, and personal care remedies. "People shared more than we could believe," she says.
Next, Argo conducted a brand personification exercise where participants wrote comparisons between Argo and Clabber Girl, and another one where they judged 19 packaging prototypes. Argo video recorded the process. "We didn't just sit people down and say, 'How do you feel about corn starch?' The consumers were brainstorming with us and we used the brainstorming ideas to apply to the prototype packages," Murphy says.
After spending two days with the focus group participants in each city, Zepaltas and Murphy brought the information to the package design team and the team designed alternatives. To choose the right packaging, Zepaltas and Murphy conducted additional focus groups, but this time the discussions were conducted in the Argo offices. The focus group room was wired with a video camera and Zepaltas' brand group sat in another room and watched on a monitor. In addition the designers in the Memphis, office watched, as did the operations group in the city, IA, office. The process gave Argo solid direction going forward.
The third step involved assembling a focus group to choose best of? four different labels for the front of the new container. The group looked at each label for three seconds and then voiced what they remembered seeing.
Finally, the fourth step tested the new labeling and packaging. Argo hired Nielsen Bases to manage the project. Bases screened 200 baker participants using a series of questions, and measured their answers on overall purchase interest, likeability, and value. Bases then compared the scores to its normative data. From that, Argo chose the winning package design.
Since the product's relaunch in June 2008, Argo's consumer sales declines have turned around, and retailers have readily agreed to sell the product. The process also helped to get insight into how to tailor advertising, display it in stores, and redesign the website. Zepaltas says it also has spurred interest in where to take the Argo brand, how far the brand stretches, and how to extend it into other categories. "Nobody was doing a whole lot; it's corn starch-boring," she says. "This whole project did a lot to rejuvenate an internal team to think about where we could take [the brand]."