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Archive for the ‘Pet Products’ Category

Consumer Product Market Penetration is Much Easier If Exclusivity Is Key to the Lines Branding Strategy

Wednesday, April 11th, 2012

by: Geoff Ficke

Consumer Product Market Penetration is Much Easier If Exclusivity Is Key to the Lines Branding Strategy

Recently I had the opportunity to visit and work several Trade Shows while on an extended business trip through Europe. One was a huge Beauty Product expo in Italy, another a jewelry fair in Switzerland, and a Gourmet Food Show in England completed the itinerary. Each of the venues would be considered apex convocations within their industry space. Each offered a range of products touching many price points.

As any consumer of economic news knows, today Europe is struggling and in a severe commercial downturn. Consumers are caught in a severe pinch between sky high government taxes and budget deficits, slowing growth, job losses and a real decline in personal incomes. The fear is palpable in many obvious ways, even to a foreign traveler.

And yet, the Trade Shows I attended were each doing their most brisk commerce in the categories that offered the more expensive, exclusive product offerings. I queried any number of vendors from across a broad range of retail price positions. Inevitably the higher end products on offer reported that they were doing well. The mid-market brands seemed to be suffering most. The mass market lines were of course also doing well as many middle class shoppers were trading down in these uncertain times, although many mentioned that they were cutting margins to maintain market share.

It is a fact that in many product categories, exclusivity as a marketing strategy can be an easier route to store shelves than almost any other model. In higher-end markets there is less pricing resistance, and thus greater opportunities to enjoy fatter profit margins. Competition can be much less severe. Obstacles to gaining distribution are much less in specialty
stores and boutiques than exist in chains and mass market discounters.

Pet products that cater to passionate owners often seem eccentric. Jewelry, cashmere sweaters for dogs, Halloween outfits for cats and luxury pet beds seem extreme. But, they sell. A visit to any Pet industry Trade Show will confirm this fact.

Cosmetics, Jewelry, Couture Fashion, Footwear, Automobiles, Gourmet Foods and Drinks, Electronics, Luggage, and many other product categories that provide exclusive brands are booming. Brands in the mid-market range are being squeezed. Private label offerings are picking up market share, though margins are squeezed in order to lower and hit needed price points.

The market for Skin Care products priced over $100 per ounce is sizzling. Gourmet Food brands are enjoying a golden age thanks to the popularity of celebrity chefs and food networks. Jimmy Choo and Manolo Blahnik, among other show designers, have elevated more than the heels on their products. An order for a new Ferrari or McLaren sport car, paid up-front with cash, will earn the buyer a spot on a waiting list with a 2-year wait for delivery of their vehicle. Every Hermes Birkin bag is pre-sold each season before the purses ever hit store shelves. The valet parking concession at Harrods and Harvey Nichols in London is constantly backed up with a constant cue of chauffeur driven Rolls Royce and Bentley automobiles.

Launching Consumer Products with an Exclusivity distribution Marketing Strategy and Sales Model is a course we often we choose for client projects. Once a market has been  penetrated, and consumer demand is stimulated for a product it is always an option to replicate the item in a lower price point presentation. You can always come down in price.

Why Is Laser-Like Focus So Crucial and Yet So Difficult for Entrepreneurs to Maintain

Monday, December 26th, 2011

by: Geoff Ficke

Why Is Laser-Like Focus So Crucial and Yet So Difficult for Entrepreneurs to Maintain 

When we work with small businesses, entrepreneurs and inventors in our Consumer Product Marketing and Branding Consulting group we constantly find ourselves using and reinforcing the importance of the word “focus” to prospective clients. It is crucial to their success. It is also, often in the shortest of supply. 

By their very nature, people who create products and attempt to start businesses have some level of creativity. They envision possibilities for their ideas and endeavor to turn their vision into a commercial entity. However, this creativity often handicaps their efforts because they cannot maintain total focus and apply it to the job at hand. This manifests itself in different ways, usually by comingling work elements from multiple concepts and straying from the alpha plan that must be executed to get their initial idea to market. 

Recently we reviewed a Pet Product for dog and cat wellness. The products were well developed from a clinical standpoint. The Entrepreneur had conducted bountiful lab research. The Marketing Strategy and Business Plan were unformed but that could be easily fixed. After a thorough review process, and much debate, we passed on the opportunity to proceed and engage on this project. Why? 

Simply put, the creator of this interesting line of Pet Care Products was unable to focus on this one, high potential group of products. During the meeting, and on subsequent conference calls, he would divert his attention to human oral care products he was developing, or a horse liniment, or an arthritis spray treatment, or a cancer patch. On numerous occasions we asked him to identify the most market ready product in this vast arsenal. He would respond the “pet products” and then ramble on endlessly about other cures he envisioned.

This lack of laser-like focus is the Achilles Heel for far too many aspiring inventors and entrepreneurs. It is paramount that success be achieved on at least one project before investors, partners or licensees will want to participate in subsequent ventures. By muddying the waters with bits and pieces from multiple, diversified concepts a signal is powerfully given that the owner lacks focus, and thus discipline and commitment.

The experience I describe with the creator of the dog and cat wellness product range is not an anomaly. It is too often the norm. It is also a red flag that the presenter is not serious. A creative mind is a wonderful asset, if it can be harnessed. Projects must be prioritized and nurtured with care and full attention to every detail.

If you believe in your idea and opportunity give it a chance to be seriously and fully considered. A great concept is minimized if the owner is not equally strong in presenting themselves and their total commitment to achieving success. Do not make a hash of your introductory meeting by confusing your audience with multiple, non-connected concepts. Too often this is done as a simple act of narcissism. The breadth of your creative instincts will become apparent soon enough, if you can get past the introduction and excite interest from partners or investors.

The Cincinnati Native Who Created the Pet Food industry in the Mid-19th Century

Tuesday, July 12th, 2011

by: Geoff Ficke

The Cincinnati Native Who Created the Pet Food industry in the Mid-19th Century 

Since the domestication of the dog some 10,000 years ago, man’s best friend enjoyed a very limited diet of table scraps, grains and scrounged bits and pieces scoured from fields and city streets until the mid-19th century. The idea of a commercial Dog Food product dedicated to the culinary and dietary needs of canines was inconceivable in a world where people toiled mightily just to nourish themselves. People kept dogs for much more than companionship. They worked for their keep just as hard as any feudal serf. 

James Spratt was a lighting-rod salesman from Cincinnati. On a business trip to England in 1860 he witnessed a gaggle of street dogs wolfing down a pile of discarded biscuit hardtack that had been tossed to the dock from a British merchant ship. This inspired Mr. Spratt. He immediately went to work to create a product that would satisfy canine hunger and afford him a great business opportunity.

 James Spratt’s brainchild, The Patented Meat Fibrine Dog Cake was launched in Holborn, London. The original product was a hard biscuit cake made from a concoction of beetroot, wheat, grains, molasses and meat. Spratt was always very secretive about what type of meat he used in his Meat Fibrine Cakes. Initially the dog biscuits were sold to English gentlemen for their prized hunting dogs. The Company that Spratt formed was the first Consumer Product Brand to Market using snob appeal and Product Positioning based on the pampering aspect of the pet food was a major factor in the Brands success. 

Spratt’s Patented Limited Co. soon received a Royal Warrant from Queen Victoria. A Patent was issued for the recipe and blending process that James Spratt perfected to manufacture the dog food biscuits. Sales boomed as aspirational dog owners wanted the best for their pets in an age when the industrial revolution was in full gear, prosperity was spreading and leisure was an exciting new lifestyle component for the middle class. James Spratt recognized these demographic changes and they whetted his Entrepreneurial instincts. 

After taking his Company public, James Spratt opened an American subsidiary based in New York City.  Distribution spread quickly across the United States. Spratt was one of the first great Consumer Product manufacturers who invested heavily in Marketing, Branding, Billboards, Packaging Graphics, Advertising and Sponsorships. 

The Company bought the front cover of the first ever journal of the American Kennel Club and actively participated in dog shows. Spratt began to target health conscious dog owners and the concept of dog life cycles was his creation. This total immersion into Marketing Pet Foods lead the Company to expand rapidly to many other Pet Care Products such as Travel Boxes, Collars, Leashes, and Kennel accessories. Booklets were given to consumers detailing how to treat common dog maladies utilizing Spratt products, medicines and Shampoos. Food products for cattle, poultry and other livestock were added. 

James Spratt died in 1880. The Company he founded, based on a simple dog biscuit, has endured. In 1950 it was bought by General Mills. 

The genius of James Spratt was not simply the creation of the first commercial Pet food. It was his vision and belief that as industrialized countries prospered, people would buy a product for their dogs that they had never needed. Today there are 77 millions licensed dogs in the United States alone. There are big box stores devoted exclusively to Marketing and Sales of Pet Products. Every Supermarket, Drug Store and Mass Merchandise retailer has a dedicated Pet Food department. 

This is the legacy of the great Entrepreneur James Spratt. He acted with creativity, purpose and determination to create a market where there was none before. His inspiration was piqued by watching street dogs devour hardtack on a Liverpool dock. This is a wonderful example for nascent Entrepreneurs to study.

How An Immigrant With Just a Few Canaries Builds a Vast Fortune

Saturday, August 15th, 2009

by: Geoff Ficke
In the 1920’s Germany was in tatters. The formerly great empire was dismantled, the powerful army humiliated by its defeat in World War I and the population starved, cold and living in despair. Businesses that had been successful before the war were decimated by the outcome. There was no way to earn a living. For many Germans the only reasonable option available to pursue a better life was to immigrate to America.

Before the outbreak of World War I, Max Stern had operated a successful textile business. The ravages of war left him with no factories, no customers and no financial options for cobbling his vast pre-war operations back together. Joining thousands of others, Mr. Stern fled post-war Weimar Republic Germany in the early 1920’s. He landed in New York City, virtually penniless, but with a plan that was already operational for rebuilding his fortunes.

Stern was not about to feel sorry for his plight. He was down, but only temporarily, because he brought more to America than dreams. He also presciently brought over 2000 canaries. At the time he was considered a bit eccentric, having spent passage monies for a flock of tiny birds. No one would have predicted that this stock would become the base for building one of America’s greatest family fortunes.

Max Stern immediately began selling canaries to pet shops and eventually the giant Woolworth chain of dime stores. The birds needed to be housed so he also sold cages. They needed to be fed so he sourced and sold bird food. Over the next 30 years he built his Company, Hartz Mountain, into the dominant pet supply business in the country. By the time of his death in the 1980’s, Hartz Mountain Corporation controlled over 80% of the pet product market.

Max Stern’s son, Leonard Stern, joined the family business and has been instrumental in vastly expanding the firm’s tentacles into real estate, finance, hotels and publishing. In order to concentrate on this huge basket of assets, the Stern Family sold the pet products business in 2000.

Today, Hartz Mountain Industries (HMI), the Stern family holding company, is one of the largest privately held real estate owners in the United States. HMI has earned spectacular returns from investing and developing the swampy Meadowlands region of Northern New Jersey into huge industrial parks. The company had developed vast swaths of the Hudson River waterfront in New Jersey. Office towers in New York City, charging some of the highest commercial rents in the country, as added jewels in the HMI crown.

Leonard Stern built Stern Publishing from nothing into one of the largest publishers of weekly city magazines, owners of The Village Voice, Cleveland Free Press and Harmon Homes, real estate guides. This business was sold in 2000.

Leonard Stern is regularly listed as one of the richest men in America. He inherited great wealth from his immigrant father Max, however, his drive and ambition has greatly leveraged those resources and expanded the Stern families wealth to staggering levels. All of this has occurred because Max had the foresight to undertake the fateful move to a distant new country with a bold plan of action.

That a small inventory of itinerant German canaries could be the starting point for a world-wide business empire, still thriving after 90 years, is testimony to the genius of the American system of capitalism, and one particular immigrant’s courage and willingness to use that system to his advantage. A version of this story has been repeated endless times, with many varying degrees of success over the history of the United States. Waves of immigrants arrive here every year only seeking the “right to pursue happiness”.

Not all succeed, but all have the opportunity to pursue their particular dream. Very few people will ever enjoy the unbridled commercial success that the Stern family has experienced. However, millions and millions of immigrants arrive in this country, appreciate the opportunities it provides and avail themselves of the endless possibilities available to them by becoming immersed in America and it’s economic bounty.

Today, we are experiencing a serious economic hiccup. It will pass. We will rebound. The opportunities to be had in this country have never been greater. Immigrants, and foreigners that dream of immigrating to America, know there is no place better than this country to pursue happiness. They seem to appreciate what this country has to offer more than some of us who have been so blessed to be born here. We should never take the greatness of America for granted.