Hobart: The difference between product leader and industry leader

Most marketing people would be quite happy working for a well-established 100+ year old company with a reputation for outstanding product quality. Most would be satisfied with increasing sales figures and consistent profits.

And wouldn’t it be thrilling to have commanding market shares in virtually every category in which you compete? Most marketing managers might think so. But not the marketing people at Hobart Corporation.

Even though Hobart was the across-the-board leader in food service, cooking and cleaning equipment for commercial and institutional markets, it still had formidable competitors in each individual category. And on any given day, with this fragmented playing field, it seemed like some one was gaining ground. At least the opportunity was there.

The management group at Hobart wanted to leverage the “broad wingspan” of its product leadership into a position only they could occupy. “We wanted to elevate the company from product leader to industry leader, and harness the intellectual capital that comes with being a business partner with our customers,” said Dean Landeche, Vice President of Brand Marketing for Hobart.

No other company had as much product and application knowledge. Nobody else had the broad perspective. And certainly no one was in a better position to determine and disseminate “best practices” for the food industry.

It was an opportunity they could not afford to pass up.

As 1997 approached, the first order of business was for Hobart to find a capable marketing and advertising services partner. After a formal search, the company selected HSR Business To Business Inc. (formerly Hensley Segal Rentschler) located in Cincinnati.

A key part of the agency’s winning presentation was for Hobart to develop a list of “things that keep customers awake at night.” After a series of management retreats with the agency, this evolved into “Six Things That Keep Customers Awake At Night.” The list covered everything from broad topics like food safety, energy consumption and labor costs to specific things like shrinkage and application of new technology. The sixth area involved ways for customers to grow sales.

As the list grew with additional detail and suggestions, ways to exploit the list quickly focused. And most of these strategies fell under the general heading of public relations, which was also a crucial plank in HSR’s recommended approach.

“Not only was the marketplace fragmented,” says HSR CEO Rick Segal, “but Hobart’s marketing efforts were divided among three business groups and more than 30 product categories. Everybody was doing his or her own thing. We wanted to create a more unified voice for Hobart, and we saw dozens of P.R. opportunities to start making this happen.”

This included the usual tactics like placing Hobart managers on industry conference agendas and writing feature articles for trade magazines. But the paradigm shift was to quit talking about product innovations and start talking about things that customers were struggling with.

The P.R. program also included a handful of unconventional strategies, like forming alliances with leading food industry consultants to swap content for websites (e.g., Hobart provides information on the total cost of equipment ownership, the consultant provides information on labor cost trends or food service operation productivity).

Hobart worked with major grocery chains to develop information on personnel training programs and equipment safety. And they sought out famous chefs like Emeril Lagasse and Wolfgang Puck to write menu suggestions and food preparation tips.

The result was a lively Hobart website, teeming with interesting content and linked to virtually everything a customer might need in the food industry.

In 1997, Hobart and HSR launched a proprietary magazine called SAGE (seasoned advice for food industry professionals). It started as a printed piece, and last year evolved into an online, electronic publication.

Instead of being a threat to trade magazines, SAGE has been an ongoing source of usable news items for them. In fact, the July 2002 edition was co-produced with Supermarket News in both printed and electronic versions as part of that magazine’s 75th anniversary.

For most B2B companies, getting ideas for feature articles out of the sales force is like pulling teeth, and it wasn’t easy in the early going for Hobart. But as salespeople started to see the benefits of having their customers spotlighted in magazines and tradeshow program keynotes, the story suggestions gradually started to flow in.

One recent promotion called, “Here, There & Everywhere” exceeded even the company’s most optimistic expectations however. The object was to gather customer testimonials about Hobart equipment. The grand prize, which was to be awarded by random drawing, was a trip for two anywhere in the world. Monthly drawings were held throughout the contest for free sets of luggage.

More than 1,000 success stories were submitted. Two hundred and five entries in twelve market categories are now posted on the Hobart website (www.hobartcorp.com). Many of these express the attitude that customers love Hobart equipment like members of our family.

It just doesn’t get much better than that.

So what is the difference between product leader and industry leader? “One difference is we feel a whole lot closer to our customers now,” said Landeche. “Not only have we worked with them on problems they feel are important, but in some cases, we know enough about how they are solving these problems to nominate them for key industry awards.”

Another difference is that Hobart is spending less on advertising and marketing communications. Trade media spending was about half of its budget in 1997. Now it’s about 30%. Roughly a third is spent on e-marketing projects, including the website and SAGE. Hobart budgets about 20% for public relations. Overall, annual marcom spending is less than $3 million, down about 10-15% over the past ten years.

The company is watching carefully how it is perceived by customers, dealers and consultants. The first tracking study showed increases in all but one of 35 factors, including significant jumps of 8-10 % in many areas. The number of respondents who felt Hobart was a source of unbiased industry trend and issue information was up 13%. The number who said Hobart takes high profile positions on key issues facing the industry rose 23%. And the number who felt Hobart was a source of “hot trend” information was up 13%.

Those are differences you can take to the bank.