Downfall. Why Chickenfeed failed.
28 November 2013
I worked at Chickenfeed on and off for a period of about five years back in the nineties. I can remember my first job was jumping on piles of rubbish including broken glass in the bin before the days of OHS. A few years later I was told that if I ever did this I’d be instantly sacked, but I digress.
Here's a picture of some actual Chickenfeed I found on the internet...
I’ve given a lot of though over the years to how Chickenfeed worked and why it was successful for such a long period of time. As someone who has worked in marketing and design I have also observed it’s downfall from this perspective. The following reflections are part experience, part observation, part inference and part extrapolation.
China and Early Success
Chickenfeed sprang into existence at a time when China and Chinese made goods were on the rise. Clever people discovered that you could buy cheap low quality high volume product by negotiating directly with suppliers and business in China. Products would be then imported to Australia marked up and sold. This combined with relatively low overhead costs and a “stack it high and watch them fly” attitude meant it was very successful. Shop fit out and product presentation was low budget, warehouse like, using wire baskets and piles of cut boxes. This didn’t matter because the product was cheap. Customers wanted cheap disposability over quality, and that’s what they got. They didn’t mind if things broke because they knew they were getting it cheap... and they came in droves. In marketing terms Chickenfeed’s point of difference was price.
Brand Awareness
However creating a business requires very different skill set to maintaining a business. Enthusiasm and newness can only work as a strategy for so long. Something is needed to maintain an established brand. Enter brand maintenance, process and strategy. You don’t have to look far to see this idea. Nearly every medium to large company or corporation do this. Corporate brands engage in refreshing their image on a regular basis; MacDonalds, KFC, Ford, Holden, Woolworths, Coles the list goes on. A brand refresh usually involves conducting a brand audit. This reviews how successfully the brand is engaging with the public. This will include all aspects of marketing, changing tag-lines, logos, fonts and points of engagement. I can’t prove it but I suspect this wasn’t ever done for Chickenfeed. The high point in Chickenfeed marketing was tag line “Bargains with a Smile” and a man dressed up as a chicken... But then nothing changed. At all. For years.
After the business was sold in 2001, things got worse. The company culture became focused on the bottom line, valuing it above long term investment and staff development. They began to run the business down. I experienced some of this in the later years of my time there. Infrastructure was run down, the cheap fittings and fixtures became damaged and old. The blue carpet squares on the floor began to look old, tired, and stained... a bit like the Chickenfeed jingle. The smiles weren’t so happy.
Enter Competition
Competitors discounted heavily to match Chickenfeed. Supermarkets used their power to cut prices. This took away Chickenfeed’s point of difference. Customers now had a choice of where to buy the same product... and the customers began choosing the larger Supermarkets. The reason for this was threefold. Firstly customers returned to Supermarkets because they could buy the same cheap products with superior product presentation and layout. Neat shelves trump piles of boxes on the floor. Secondly large Supermarkets are able to give a perception of quality, because most of their product is high quality, even if some of their products are cheap rubbish (eg. kettles and toasters). Thirdly there is a security that comes with buying from a recognised national brand, knowing that Coles or Woolies will look after you. In short Chickenfeed had lost their point of difference.
In more recent times Shiploads and The Reject Shop also emerged as competitors further fragmenting the market. These new stores had essentially the same mix of products but with superior product presentation. This combined with the advantage of being “new” and “fresh” meant they were instantly successful. They also realised that a better price wasn’t just what customers wanted. Customers now needed a better buying experience and to have an awareness of the company brand. For the customer these new brands felt more akin to a small supermarkets rather than a dingy discount warehouses. There were neat rows of product and bright shiny new fittings. A look and feel far superior to Chickenfeed.
And so customers went elsewhere. Chickenfeed started closing shops. Lots of them.
Now I’m not suggesting that I could personally saved Chickenfeed but in the wash up it’s hard not to wonder as to why Chickenfeed didn’t take serious time (and money) out to think about their brand and relaunch. I’m talking about a whole new look, better product range, nicer presentation and new shop fit-outs, not just the Purple Chicken Club. I understand that brand management isn’t an easy or cheap thing to do, the latest mess with Dominos Pizza in Australia is a good example.
I don’t doubt other reasons contributed to Chickenfeed's downfall, (I’ve only mentioned a few) but in my observation for such a large company to neglect the challenge of brand maintenance is unforgivable. When a company neglects to maintain brand, customers consequently neglect to shop in their stores, and buy their products. This in turn puts at risk their long term viability. It's not really surprising Chickenfeed failed.
0 comments:
Subscribe to:
Post Comments (Atom)
Posts
