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Archive for June 21st, 2011

5 Examples of Remora Fish Marketing That Can Jump Start Your Product’s Sales & Marketing

Tuesday, June 21st, 2011

by: Geoff Ficke

5 Examples of Remora Fish Marketing That Can Jump Start Your Product’s Sales & Marketing 

Everyone is fascinated by sharks. They are so dangerous, explosive and mysterious. Television documentaries detailing their habits, hunting techniques and brutality are ubiquitous, As exciting as the video footage of the lives of sharks is to viewers the little fish that rides the backs of the “alpha” predators receives just the opposite sort of attention. The Remora fish goes almost unnoticed. 

The Remora fish gets a free ride. It simply clings to the back of the shark. As the great beast tears apart its quarry and consumes great chunks of flesh the Remora simply gobbles up the bits and pieces of the detritus of the dead animal being feasted upon by the shark. 

Remora Marketing Strategies are a type of campaign whereby free-loaders glean sales from the Advertising, physical Retail location and Sales Promotion of more aggressive, better financed stores. The following 5 examples of Remora marketing Strategies can be altered and used as a template for your particular Consumer Product or Service situation.  

   1.   Have you ever seen a mall kiosk advertise? 

Easy answer, no! They do not have to because the anchor Department Stores in a mall and the national chains advertise relentlessly to pull in traffic. The center aisle kiosk vendor preys on this supply of traffic, much like the Remora. Toys, Skin Care, Watch and Jewelry, Home improvements, Sunglasses and so many more products are sold in mall kiosks that exist solely because the sharks (big box stores) pull in their prey for them. The kiosk location is the Marketing Strategy for these niche retailers. 

   2.    Look at who is selling at County and State Fairs.

There are a surprising number of artisan product manufacturers that sell their products by following the circuit of state and county fair schedules. They simply lease a space on the midway. The head count at these venues is a known quantity and with a minimum of demographic research you will be able to confirm if your product is likely to succeed here. 

   3.    The Remora Roach Coach? 

The old slang term for the mobile food truck, the “roach coach” is no longer completely applicable. Today, in many cities there are upscale foods being prepared by talented chef’s that are served from roving mobile food coaches. Korean, Cajun, Mexican and New American foods that enjoy excellent reviews can be sold profitably and consumers are lining up to enjoy these treats. The Remora aspect is that the trucks can locate where foot traffic is heaviest. Lunchtime might find the coach in city center. Late night the rig is moved to the entertainment district. Festivals will often find these entrepreneur’s nearby servicing the overflow crowds. 

   4.    Art Fairs are winners!

Many cities have art fairs that they promote heavily. Artisans of all types are encouraged to participate in these shows. I know a lady who makes Gourmet Cupcakes and does a brisk business at upscale art shows only. She travels an area of about 100 miles from her home and has developed a loyal following who buy her treats throughout the year. She is an example of the art fair Remora. 

   5.    Spend “the season” in a travel destination. 

I have had several clients who move to Florida in the winter and return north for the summers. They do this for the weather of course, but also because they have created seasonal niche businesses. One fellow is a hunting guide in the winter and a fishing guide in the summer. Another makes custom fly fishing lures that he sells to owners of luxury Jim Grant fly rods. 

A Remora Marketing Strategy is simple to execute, can be low overhead and is flexible. For years the Remora concept has been utilized by Companies to enhance or embellish Branded products (i.e. AMG customization of Mercedes Benz automobiles). Entrepreneurs can make the Remora model work for them as well.

Weave a “Freemium” Business Model Element Into Your Consumer Product Marketing Strategy

Tuesday, June 21st, 2011

by: Goff Ficke

Weave a “Freemium” Business Model Element Into Your Consumer Product Marketing Strategy

A 21st century term applied to a decades old Marketing Concept, Freemium has become one of the most popular vehicles for Consumer Product entrepreneurs, Software designers and Marketers to utilize for increasing sales and distribution of their products. The concept in its most modern form is a spin on the Gift-with-Purchase promotion designed by Estee Lauder Cosmetics in the 1960’s and King Gillette with this safety razor and blade refill strategy first used in the late 19th century. 

The word “freemium” is a portmanteau, combining the two aspects of the Business Model, free and premium. The idea is to offer a hook, a free good or service to the consumer, with the Sales Strategy being to up-sell the recipient of the free offer to a premium product or service. This concept is powerful, simple to execute and provides excellent results. 

The most compelling word in Consumer Product Marketing is “free”. Who doesn’t want to receive something for nothing? Watch retail store traffic when samples or tastings are being provided. Customers flock to the in-store demonstrator providing the free samples. Politicians make their careers by providing seemingly free benefits to constituents. 

The word “premium” is evocative of a better lifestyle, luxury product or enhanced version of a staple product. Most people aspire to add luxury to their environment. A bigger flat screen television, a finer French Perfume, imported rare Extra Virgin Olive Oil or Italian-made shoes are basic examples of the types of products that consumers trend toward as incomes expand. People drive a small Kia automobile for transportation. They drive a Jaguar because they want the premium Features and Benefits that Jaguar Marketing details in its Advertising.

 Recently we had a client who was attempting to Market a web-service to the portion of the population who were nearing retirement. Our Product Development team collaborated with software designers to create a free “Club Feature” to entice visitors to the web-site to join instantly. We waived the annual $95 Membership charge. Once aboard, Members were offered a menu of Premium Services, also at Club Member Discounts. The result was an amortization of costs against a broad field of income generators. The site was profitable almost from the date it went on-line. 

The Estee Lauder inspired Gift-with-Purchase transformed the Department Store luxury Cosmetic industry. Competitors quickly jumped on this creative Sales Promotion bandwagon. However, Estee Lauder enjoyed the most important element in Consumer Product Marketing and Sales; a first mover advantage. The GWP concept launched the Brand into an orbit that has never been lost. 

The Gift-with-Purchase (GWP) Promotional Strategy was followed by the Purchase-with-Purchase (PWP). The GWP offers a free sampler of an assortment of complimentary products. The premium is the minimum purchase required to obtain the GWP. If you do not believe that this technique works, just stand in a Department Store Cosmetic department anywhere in the world when a Beauty Product of Fragrance vendor is offering their GWP. 

AOL used a “Freemium” program for years to launch and expand their dial-up internet service. Displays offering free software containing AOL set-up data were ubiquitous in stores and supermarkets. The “freemium” was typically a 90 day no cost teaser trial with a fixed monthly service rate kicking in automatically after the gratis period ended. This model worked magnificently for AOL for a number of years and made the Company the “alpha” service provider that most internet customers initially utilized. 

Variants of a “freemium” Marketing Strategy are constantly being utilized. Wellness products, Weight Loss Products, Cosmetics, Food and Drink Products, and a wide range of Consumer Services employ some form of a “freemium” in their Brand building Marketing Campaigns. Infomercials often offer a free trail size of the product with the client paying only shipping and handling. Of course, these offers are almost always accompanied with a Negative Option Feature that kicks on automatically unless you remember to opt out.

Free offers work, but in order to provide goods and services there must be an income stream generated by the give-away. Smart Consumer Product Marketers and Services Providers have learned to craft Marketing Programs that include a free offer with a premium up-sell link. Freemium’s have been around for decades, only the word is new.

6 Things You Need to Know In Order to License Your Product

Tuesday, June 21st, 2011

by: Geoff Ficke

6 Things You Need to Know In Order to License Your Product 

My Marketing Consulting, Branding and Product Development firm receives numerous queries on Licensing Consumer Products, Services and Concepts every week. Most inquiries are of no value as the hopeful Licensor has not organized proper due diligence that potential Licensees will require. The following are 6 Points to address before attempting to present a License opportunity

  1. Who is the Competition? 

You need to know your market category backward and forward, inside and out. Who are the biggest competitors your Gourmet Marinade or Mascara, or Wellness Product will be fighting for shelf space, display and sales promotional slots? Who are the hottest competitors? What is the current market pricing model? Potential Licensees will know the answers to these questions and many more. A Licensor had better know them as well. 

2.    How will the Idea/Product be executed? 

You will need to know the Logistic, Tooling, Manufacturing, Lead times, Production Limitations (if any), suggested optimal Marketing Strategy, Pricing and Sales Models that support the Licensing effort. Make it easy for potential Licensees to decide in your favor by covering all of the bases. 

3.    What is the Unique Selling Proposition inherent in your product? 

The market does not need another Pet Product, Car Wax, Aromatherapy, Juvenile Product, etc. unless the item has a Unique Selling Proposition (USP). This identifies your special product niche, its point of difference from competition. This is a crucial element for Licensees to be able to quickly see, understand and value. 

4.    What is the size of the Market?

Conduct proper Demographic and Market Research to learn the latest data on the size of the market you are seeking to address with your License opportunity. There are 74 million licensed dogs in the United States alone. This is important if you are attempting to sell a Pet Product or Accessory. The Baby Food market was $5.5 Billion in 2009, crucial if you are trying to make a deal on a Baby Consumable Product.

Having command of this type of knowledge stamps you as a professional in the eyes of the target licensee.

5.    Who are the Prime Licensee Targets of Opportunity? 

What are the four best targets of opportunity for you to approach with a Licensing offering? Some Companies are public about their Open Invitation search for outside product opportunities. Others are very fearful of litigation and difficult to penetrate with an offer. 

I always look at mid-level size targets first. These Companies are a bit faster on their feet and can make more facile decisions. They have resources and have not yet become bureaucratically bloated. 

6.    What is the sales potential for your product?

This requires the construction of a conservative Sales Model and requires a bit of research in order to assemble data that will withstand scrutiny.

Let’s assume you have developed a Fashion Accessory product. Your research indicates that there are 80,000 potential sales outlets for the product in the United States alone. The following is a hypothetical example of Sales Potential for this fictitious Fashion Accessory:

Unit Sell-in           =  60 pieces per door  — 12 pieces of 5 styles/colors

Wholesale                $10.00

Total per door         $600.00

Stock Turn                  4 X’s 

Total Yr. Sales          $2400 annual wholesale per door 

Size of Universe       80,000 doors

Penetration               1,600 doors   2% year one, to 4% yr. 2, 6% yr. 3, etc. 

Total 1st year Sales = $3,840,000 

Obviously the variables move wildly based on market research for each category. If you conduct this work with diligence, and base assumptions on verifiable, historic realities this will confirm that your License offer is valuable, serious and being presented by professionals. 

The biggest mistake we see aspiring Licensors make is to think that they can sell an un-vetted idea. There is simply no room in this super-competitive market for those that take shortcuts. Do not waste your time unless you are prepared to provide a professional package that will interest and excite target Licensees about the unique Features and Benefits of your Consumer Product. Each of these 6 points is equally important when seeking Investment, Venture Capital or Strategic Alliance consideration.

The 5 Most Important Items to Fully Address For Entrepreneurs When Writing Business Plans

Tuesday, June 21st, 2011

by: Geoff Ficke

The 5 Most Important Items to Fully Address  For Entrepreneurs When Writing Business Plans 

A good portion of my work is devoted to writing and reading Business Plans. My Consumer Product Development and Marketing Consulting firm works extensively with small businesses, foreign Companies seeking United States Sales and Distribution, Inventors and Entrepreneurs. The solid Business Plan is the keystone that is essential in successfully driving a new venture to success. 

Unfortunately, the vast majority of the Business Plan submissions that I review are discarded. There are many reasons for this. A great Business Plan is the “window to the soul” of your planned enterprise. It needs to stand out, be crisp, exciting and make the reader want to learn more about the project, and most importantly, you. 

In an effort to provide targeted guidance in preparing and presenting a Business Plan that will be given proper consideration by Investors, Venture Capital, Investment Banks, Partner and Strategic Alliance possibilities, the following Five Irrefutable Rules should be considered and included in your document. 

  1. Know Your Cost of Goods-ABSOLUTELY! 

If you do not know what the dead net, landed final Cost of Goods is for the Consumer Product or Service that the Business Plan targets none of the Financial Assumptions will make sense or withstand scrutiny. I list the importance of this first, because the rest of the Business Plan shatters completely without this all-important number. 

I cannot tell you how often we see plans that guess, or worse do not know actual Cost of Goods. Marketing Strategies, Sales Models, Promotion Budgets, Gross Margins, Pricing and many other Financial Projections cannot be nailed unless Cost of Goods has been fully vetted and is supported with detail and Exhibits. Not knowing definitively what true Cost of Production is for your product is an immediate disqualifier. Do not shortcut this point. 

     2.    Write a Brisk, Exciting Executive Summary 

Have you ever read a Ken Follett or Robert Ludlum novel? Ever taken in a Jerry Bruckheimer-produced action movie? There is always one constant that these consummate entertainers provide: excitement in the first chapter or scenes. 

The Executive Summary must do the same for your target reader. Remember, they read dozens of Business Plans each week. Very few are professionally or properly written. Those are discarded immediately. You need, and deserve, to have your Business Plan read. Keep the Executive Summary short, no more than 2 pages, flowing, exciting (not gushing) and on point. It should summarize the key Features and Benefits of your Consumer Product/Project, the Management Structure, Marketing Plans and Sales Models, Financials and Harvest. At the end, I will want to explore the opportunity further if the Executive Summary has done its job. 

   3.    The Management Team is Crucial 

One of the most common deficiencies we see is the lack of consideration given to the Management of the New Company being proposed. If you have never managed a business, but have a marketable product or opportunity, you will need to assemble a group of core managers that can provide the skills required to run the business post-funding. Who are these Managers, name them? Who will handle Sales and Marketing, Logistics, Production, Finance? What are their bona-fides? Include their CV’s in Exhibits. 

Do not seek investment if you cannot provide a slate of experienced, talented people to manage the enterprise. You will be dismissed. 

    4.    Identify Clearly the Projects Unique Selling Proposition (USP) 

There are Convergent and Divergent Consumer Product opportunities. Convergent Products are improvements on existing products. These are often considered “Niche Products”. Reading Glasses with night lights built into the frame is an example of a Niche Product. 

Divergent products are rarer. These products create new product categories and alter existing Retail Sales Promotion and Distribution Models. The George Foreman Grille, Mr. Coffee or notebook computers are examples of divergent products. 

The most important element for your New Consumer Product to possess is an identifiable USP. You must be able to differentiate your project from existing competition and be able to detail unique Features and Benefits you will offer consumers. This is also a First Mover Advantage. 

     5.    Are Your Financials Compelling to Investors 

A properly vetted Business Plan will include three year (not five) Cash Flow, Balance Sheet and Income Statements. These projections, for start-up projects, are always based on best-Assumptions. This is the Achilles Heel in most plans. The Assumptions will not withstand investor scrutiny. 

Most Venture Capital (VC) investments do not return the capital invested. A 10% success rate is about the industry average. In order to be considered you will have to demonstrate that your opportunity offers at least a 35% Return on Investment (ROI), beginning between month 24 and 36 of operations post-investment. Failure to be able to support this ROI is a disqualifier. 

Remember, the definition of a great Business Plan is a word picture based on Assumptions that you Qualify, Quantify and Narrate. Do not confuse a large, unwieldy, wordy document with a strong plan. Keep the Business Plan short, no more that 20 to 25 pages, before adding Assumption supporting Exhibits, as many as necessary.