Animal Nutrition Views
Ioannis Mavromichalis, Ph.D., gives his views on poultry, pig and dairy nutrition based on his experience as a nutrition consultant with clients around the world.
Having too many products can become unhealthy for business and profits.
Every time I visit a new customer, I have the urge to create a new product for them. This is my job, and if done correctly with the cooperation of the customer, it is something that works, offering cost and animal performance benefits. In my work as consultant, I have seen this happening not only among nutritionists and other technical people, but also by sales people. We all want the best for our customers, and we want to offer them a unique solution best-suited to their needs.
This is the case of a recent customer who complained about the number of product codes: over 10,000. The interesting part is that 90 percent of their business was done with only 10 percent of these product codes, whereas the other 90 percent of product codes were just there for marketing/technical reasons. As it happened, the cost of maintaining so many codes exceeded the profit made by them. In essence, 10 percent of product codes were subsidizing the remaining 90 percent of product codes. This was due to increased logistics and production requirements.
This is not an unusual situation, and most companies refuse to delete even the bottom-bottom-10 percent of their codes. This eats up their profits, offering little if anything in terms of marketing advantage. In fact, one of the most well-known additive companies, having over 400 codes (which is an enormous number for an additives firm), once decided to drop everything and focus on six major products (and some derivatives out of these six, but nothing near the 400 original codes). This was a great relief for their sales, technical, research and production people. And believe it or not, they are still present and thriving in our industry.