Slick 50 as you may know is a synthetic engine oil treatment that purports to enhance automotive horsepower and performance by preventing sludge build-up and fighting ethanol water damage. At one time it claimed to increase vehicle mileage. Its one of the more lucrative products sold at automotive parts retailers.

We were hired by a leading automotive chemical firm to create a Slick 50 product knockoff that would be sold in AutoZone. Having created thousands of successful automotive chemical products for this firm, we were up for the task.

We were charged with creating “Protect 100,” an unadvertised economical alternative to Slick 50, that had real Teflon® brand as an additive. Slick 50 sold for $21.50 but cost just over a dollar to manufacture and put on shelf.

In Marketing classes they teach us that “Pricing” is one of the critical “P’s” that we must get right for any brand to succeed, and the professors were right. We sold in Protect 100 with an MSRP at $18.49 – roughly four bucks cheaper than the competition at shelf.

Our value proposition was simple: Customers would come through the AutoZone doors driven by Slick 50 advertising and when they get to the shelf, they are confronted with a very similar looking product with real Teflon® brand ingredients for a few bucks less. We saw a winner.

Customers agreed and Protect 100 flew off the shelves at a much higher rate than Slick 50. Within weeks, we had sold $15M in product and had one of top selling sku’s in AutoZone stores nationwide. Life was good.

But the AutoZone buyer wasn’t happy. It seemed that our price was too high. As a buyer, he knew what our client’s ingredients and packaging costs were and demanded a giant price reduction. After weeks of tense negotiations, our client agreed under duress to slash the Protect 100 MSRP down to $13.49 per unit.

Immediately we saw sales nosedive. Customers no longer saw Protect 100 as a parity product to Slick 50. In fact, AutoZone customers now believed that Slick 50 at $21.50 was a far superior product to Protect 100 now priced at $13.49. The obvious price difference led customers to believe that the two products were clearly not the same quality of ingredients even though in reality, Protect 100 was just as good or better.

The brand died a swift death shortly after the price slashing. The takeaway is that the right pricing will make or break your brand.