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VIDEO CASE 5-1 Ken Davis Products, Inc: Barbecue Sauces for "Non-Improvisers"

"Cooking is a lot like music," explains Barbara Jo Davis. "There are musicians who are excellent musicians and they can play any of the classical music to perfection, but they don't know how to improvise. And then there are the jazz musicians who can do both of these things."

"The same thing is true of cooks," continues Barbara. "There are the cooks who can follow a recipe...and will be the best cooks in the world as long as they have a recipe. But if they have to improvise, then they're lost. So what we want to do is help those who aren't the improvisers."

THE COMPANY

Barbara Jo Davis is president of Ken Davis Products, Inc., a small regional business that develops and markets barbecue sauces. The company was founded by Barbara Davis's late spouse Ken Davis. Ken owned a restaurant where he served his grandmother's recipe for barbecue sauce, and he received such positive feedback from his customers he decided to write the recipe down to ensure it would taste the same every time he made it. He called in Barbara, then a home economist for a large consumer foods corporation, to help him do it. Shortly afterward Ken closed the restaurant, married Barbara, and began marketing his barbecue sauce full time. Barbara Davis stayed with the consumer foods corporation, becoming a manager for the test kitchens and for the cookbooks, until 1988 when she left to work for Ken Davis Products full time.

While Ken Davis Products is a market leader in its region, it has not expanded nationwide. Barbara Davis explains, "What I hear consumers say again and again is the reason they buy Ken Davis barbecue sauces is because it's a local company. I think the reason we're the market leaders is because it's a personal product. People know who the person is. They can see me driving around in my car."

PRODUCTS, CUSTOMERS, AND ENVIRONMENT

In addition to the Original Ken Davis Barbecue Sauce, the company also sells Smooth and Spicy Barbecue Sauce, with jalapeno peppers added to it, and a line of marinade sauces called Jazz It Up. Through consumer testing and focus groups, Barbara Davis discovered the real problem consumers are facing when they cook is how to add flavor to the meats they are eating. Hence the Jazz It Up line of marinade sauces was born. Ken Davis Products now offers four varieties of cooking sauces-Orange Citrus, Lemon Lime, Southwestern, and Mesquite. "They're really a hybrid between marinades and cooking sauces because you can use them as an ingredient, a marinade, or even as a dipping sauce," explains Barbara Davis. This was a natural product line extension for Ken Davis Products based on its reputation in the barbecue sauce market.

The company does not target specific consumer segments because it seems the consumers are just about everybody. Barbara Davis has discovered through consumer focus groups that the barbecue sauce buying decision is still made by the female head of the household, but everybody in the family seems to participate in the decision. "Kids especially like our sauce a lot," explains Barbara Davis, "and elderly people like the Original Recipe because it's got a lot of flavor but it's not hot or spicy."

The Food and Drug Administration (FDA) recently passed legislation requiring all consumer food products to nutrition label their products in a standardized way. For small companies such as Ken Davis Products, this meant the added expense of finding an independent laboratory to analyze the products and redesigning the labels. Barbara Davis thinks this new legislation works to the advantage of Ken Davis Products, though. "New people can compare and see Ken Davis is indeed lower in sodium than most of the other barbecue sauces on the market."

THE ISSUES

Ken Davis Products prides itself on staying abreast of changing consumer tastes and trends. In addition to conducting focus groups, Barbara Davis solicits informal feedback from current and potential Ken Davis customers. She will talk to testers at an in-store sampling or even walk up to shoppers in the barbecue sauce aisle and ask them about their purchases. Barbara Davis believes, "You have to listen to your consumer because you're not in this business to please yourself. You're in business to please your consumer." In addition to discovering the latest tastes, she has learned from her customers that the primary promotional vehicle used to spread the word about Ken Davis Products is word of mouth.

To make the most of this strategy, Ken Davis Products participates in event marketing and in-store sampling. Ken Davis used to always say, "The best way to sell a food product is to get people to taste it, because it's ultimately the taste that will keep them as customers." Barbara Davis has found that another successful strategy to get people talking about Ken Davis Products is to become involved in the community. She regularly talks to groups of young entrepreneurs or invites school children to her test kitchen to learn how to cook. "You do all of these little things just to get people thinking Ken Davis. And they don't even know they're thinking Ken Davis half the time. But it's so ingrained that when they go to the grocery store, why would they look at those other brands?" Barbara Davis also sends out a newsletter twice a year to Ken Davis Products users with new recipe ideas and stories about the company. Today's busy family is always on the look out for quick and easy recipes.

Ken Davis Products also uses some more traditional promotional vehicles, such as Free Standing Inserts (FSIs) in the Sunday paper and radio advertising. The FSIs include a coupon to induce new customers to try the product. The radio ads reflect the local, homegrown differentiation strategy used by Ken Davis Products. Barbara Davis does the commercials herself, which are completely unrehearsed. "That way I don't have to pay talent," she chuckles.

THE MULTIPLE ROLES OF A SMALL BUSINESSPERSON

After working for a large corporation and then becoming a small business entrepreneur, Barbara Davis is in a unique position to comment on the satisfactions and hardships of owning your own business. She stresses that you have to know everything about your business-you can't specialize as in a large corporation. You also get to make all the decisions and have the satisfaction of being a part of the process every step of the way. "But," Barbara adds, "you have to work harder than you have ever worked in your life. You have to always be working. When I was working for a corporation, I resented working all those hours because it wasn't for me. But now when I'm working all these hours I love it because I am doing it for myself. That's the reward-it's all for you."

Questions

In what ways have American eating habits changed over the past decade that affect a barbecue sauce manufacturer?
What are the two or three main (a) objective evaluative criteria and (b) subjective evaluative criteria consumers of Ken Davis barbecue sauces might use?
How can Ken Davis Products do marketing research on consumers to find out what they eat, to learn how they use barbecue sauces, and to get ideas for new products?
(a) Do you think a small, local company such as Ken Davis Products should have entered the market as a premium-priced product or a low-priced product? (b) What should its pricing strategy be today?
What do you see are the (a) satisfactions and (b) concerns of being in business for yourself?

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