What can start-ups learn from readymade cake mixes?

By: Ruben Kostucki

Date: 13 April 2011

In the early 1900s, a company called Betty Crocker pioneered the concept of readymade cake mixes. The product was aimed at housewives and its key selling point was a tasty treat could be rustled up with minimal effort. The product had been carefully developed and when launched, market conditions were deemed optimal, in short – a recipe for success.

And yet, the expected sales boom didn’t occur. Why? Although simple solutions were sought after, Betty Crocker’s new readymade cake mix made things a little too easy. So easy in fact, that using the mix felt almost like cheating and the hardworking housewives of the time felt scared and threatened. It essentially made them feel as though their role in the kitchen was jeopardised.

Simple problems require simple solutions and in this case, the solution was very simple: powdered eggs were removed from the mix. The simple act of breaking an egg and adding it to the mix was enough to deliver that proud feeling of having baked a homemade cake. A minor detail, yet one with dramatic consequences.

A similar situation occurred when Pinnacle Foods tried to introduce the Duncan Hines range of readymade cake mixes into the Japanese market. Despite extensive market research and product development, once again, the expected boom in sales didn’t occur. The problem? Japan has a cooking culture predominately based on rice, and although the market was ready, homes were not. Indeed, the majority of Japanese households were not equipped with conventional Western ovens, rendering the cake mix effectively useless.

These stories reflect the need to spend the necessary amount of time to get things right from the start. So here are two simple rules of thumb I’d like to share.

1 Build your brand according to your unique values

Same as for a date, you need to think wisely what to wear and where to go. So when you think about your brand, your checklist should include everything from your dress code and website to your tone of voice in your communications. Are you too serious? Do you stand out? If not, think about the Purple Cow.

To be thought of as more professional, I use a telephone answering service and have customised business cards.

2 Give your time and expertise for free

As well as feeling amazing about it, you’ll create much more word-of-mouth marketing than you have ever imagined possible. Go speak at school and universities, help charities and promote other businesses. Timebank is a great example of an organisation that can help you give your expertise away for free. Doubt it’ll work? Check the Jojo Project and you’ll see how quickly you can establish a brand and grow it.

Ruben Kostucki of www.seeducation.org 

What does the * mean?

If a link has a * this means it is an affiliate link. To find out more, see our FAQs.