Scooping Profits from Pet Poop

Remember an important new product development: It is always easier to enter a growth market with a new product than a stagnant or declining market!

Earlier in my career, I worked with a mineral company that sold a by-product to a nearby pet food producer as long as we kept the price low. We are now considered a mineral supplement! Our product went from a "filler" to a mineral supplement in the last several years. Why?  Imagine my surprise when I learned recently that the pet industry had grown from $18 billion in 1995 to nearly $38 billion in 2005. That's double digit growth!

Many of us had pets in our youth but today's adult pet owners have a deeper, different tie to their pets. Clearly much has changed.

What lessons can new product developers glean from the pet industry?

a)    Understand what triggers your customer's behavior. Recognizing that many owners buy pet food like they'd buy for themselves can be the
difference between a commodity market (flat margins) and a personal identity market where higher margins are achievable.

b)    Monitor your customer's behavior over time with attention to demographic changes.  Example: Adults marrying later has created a strong companionship between pets and owners. Recognizing and reacting to changing behaviors can position you to stay ahead of the demand curve.

c)     If you have watched the cable program the "Dog Whisperer" you will know that it is not about the dog but the owners behaving badly! These owners who humanize their pet are the same ones who are driving the high growth rate. Ignore these consumers and it will come back to bite you!

Lastly, are you really looking for growth markets? New product development is a lot easier when you take off the leash of old thinking in your new product development. Why chase parked cars (mature markets) when Frisbees (growth markets) can be spotted?

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