As a college student, we learned about the different ways a company can keep a competitor out of the marketplace. The best way that was discussed was creating barriers of entry.
A barrier of entry can be created in several ways. First, the brand can use differentiation. Second, it can adjust its price to make it such that an additional player would be unsustainable. Third, it can use the legal system to prevent an competitor.
We want to focus on the last one.
Unilever is suing the creators of Just Mayo, a 60-something person company, for misleading consumers.
Just Mayo, a vegan version of mayo, does not contain any eggs.
Is that important? Technically, yes. According to the FDA, and as the Hellman's mayo owner makes clear, "mayo" is defined as a spread containing eggs.
Therefore, as the suit states, Unilever demands that Just Mayo stop calling its product mayo.
Now, many people are crying foul at Unilever for picking on this little company. Others are cheering for Just Mayo for being able to attract the attention of a behemoth like Unilever.
We think that Unilever had the right idea, but extremely poor execution.
The point is, Unilever wasn't happy about the attention that Just Mayo was getting. But if the little company wanted the vegan crowd, Unilever really had very little to worry about.
Unilever was trying to protect Hellman's. What they could have done was pioneer the egg-free mayonnaise industry or encourage a competitor to enter the market. Trying to stomp out a little brand is way too old school to be effective.
Will this hurt Hellman's? Probably not. But this is definitely a move Unilever will want to have back.
Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.