Cat Fight

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The only lasting consumer lure, as any good marketer knows, is a product that performs. And like Litter Green before it, Fresh Step's success highlighted the weaknesses of Lowe's products. But several committee members, especially Kuczmarski, felt strongly that Lowe's ought to move slowly on making improvements. The major risk, Kuczmarski argued, was that after making product changes, consumers would perceive the product as unchanged -- or even worse. Lowe's couldn't afford to rush; it had to find out exactly what consumers wanted by doing an in-depth survey.

When Lowe heard about the survey idea, though, he "bit our heads off," says an exemployee. He pointed out that he had been to more cat shows than anyone in the room. He was a specialist. He had lived with cat litter for nearly 40 years. And now he was going to let some market researcher tell him how to make his product? "This'll cost me $50,000, and what is it going to give us?" Lowe wanted to know. But after he had assuaged his pride, he was willing to negotiate. After all, Clorox was on to something better. "I know when something is good and when something is bad, and I knew that our product needed improvement," he admits.

Committee members argued that Lowe had to think even beyond the current Clorox threat. Ten percent annual growth in the litter market was sure to lure more big companies like a tabby to catnip. And the entry fee wouldn't strain the resources of a Quaker Oats Co. or a Procter & Gamble. Now was the time to spend the money and raise the ante for potential competitors. The committee even dragged in the head of a local market-research firm to explain what the study could achieve. "He was not opposed to spending money, but it was a very painful exercise to convince him," says a former employee.

Lowe agreed to the strategy, which came to be called "the one-two punch." Ramey, a student of marketing warfare, was the lord of the ring. He reasoned that Tidy Cat 3 was most immediately threatened. It had the most shelf space to lose. Lowe agreed to dip into his "war chest" and match Clorox by spending $8 million promoting both brands. The strategy: as Clorox approached the end of its promotion budget, Lowe's would unveil an improved Kitty Litter Brand, reformulated based on results of the consumer survey.

It was no surprise when the survey showed that consumers wanted odor control. Lowe knew he could create a better odor-control additive that would match Clorox's Fresh Step; he even found a way to make it visual by adding green and blue flecks. But the survey also found a strong sentiment in favor of a product with far less dust than existing litters. Lowe mulled it over: was this the value-added advantage that would catapult him past Clorox?

But dust control was difficult. And expensive. Lowe didn't want to make a costly product change if he could help it. So he built a contraption that utilized vacuum vents to shake the dust out of the litter before packaging. It didn't work; more dust was generated during shipping. Finally, Lowe made a commitment. He raised his R&D spending from $1 million to $4 million, putting the heat on employees at his "Cat Care Center," where cats answer nature's call in the name of commerce.

Lowe grew impatient as the months passed. The committee kept trying dust-free products and sending them back. Meanwhile, Clorox was gaining. Lowe had hoped to hold Clorox to a 14% dollar share of the market. If it was much more successful, it might spend another $8 million pouring concrete for a plant. And then the trouble would really begin. "Once you have the assets invested, you'll fight even harder," Tooker says.

By spring 1985, Clorox had captured 14% of the market. Lowe decided he couldn't wait any longer. With the dust-control additive still in development, the company introduced an improved, redesigned Kitty Litter Brand with "dual-odor control." Aah, but how to demonstrate the unique wonders of this new product? Lowe supplied his brokers with litter boxes and a vial of -- you guessed it -- cat urine. Never mind that it was an imitation; it smelled just as pungent. The brokers emptied the vial into the litter and invited retailers -- who at the moment must have been questioning the price of success -- to sniff it.

In January 1986, Lowe's threw its second punch: 99% dust-free versions of both Kitty Litter Brand and Tidy Cat 3. The two reformulated products seemed to hold Clorox at bay: its market share hasn't strayed in over a year. And Lowe's has shipped 22% more units of Kitty Litter Brand over last year, mostly at the expense of the regional brands. It has raised its total market share, including private labels, back to about 40%, just where it was when Clorox let the cat litter out of the bag.

To launch his dust-free products, Lowe made his debut in his company's ads last June, pouring out his litter alongside Fresh Step. Clorox filed a complaint, and Lowe sent Stanley Beals, vice-president of advertising, along with an attorney, to demonstrate that the product claims were true.

At one television network last July, Beals dumped a 10-pound bag of Kitty Litter Brand and a 7-pound sack of Fresh Step into the interoffice memo trays to demonstrate Lowe's claim. "The big guys come in here and they try to get us off the air by using the clout they have with all the advertising they do," says Lowe. "We had to run into New York and spend a lot of money to prove to the media that the complaint wasn't true. We have to defend ourselves."

That may be harder in coming years. Several of Lowe's key managers left last year, including Ramey and Tooker. Meanwhile, Clorox is showing persistence beyond its limited success: it has test-marketed another product, Litter Green 2, for yet a third assault on Lowe. "Ed has the myth that he is divine," says a longtime associate. Divine or not, he may need, like his favorite pets, nine lives to survive in the business.

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