from: Geoff Ficke
Many of the inventors and entrepreneurs we deal with in our consumer product marketing business approach us with dreams of selling products to the masses. This can be profitable and an appropriate launch strategy in cases where all stars in the galaxy align correctly. How many times does it happen,
The success of mass marketing depends on economies of scale, production benefits and large budgets to penetrate into a resounding commercial environment. Big established companies, they think that Procter & Gamble, Unilever, Rubbermaid, have all the necessary tools to launch products in this maelstrom. Most small entities and individuals do not.
Our preferred strategy is often to create a branding strategy based on exclusivity. When a product is sold in a limited distribution base, available in select stores and usually at a higher price than similar products, consumers tend to attribute a perceived value higher than these items.
There are numerous examples of exclusivity that can be used as a model when considering the correct strategy to be used for a new launch of consumer products. Retailers who sell high-end products of limited distribution are very profitable and enjoy extremely high profiles. Bloomingdales, Tourneau, Neiman Marcus, Harvery Nichols, Harrod & Rs and Ralph Lauren are just some of the shops that attract the “trade in transportation”. These stores look for high quality goods, which can be priced at a higher price, and which are not available at competing outlets. This creates a loyal customer for the types of merchandise that can only be found in these doors.
Cars, jewelry, prêt-à-porter, cosmetics, watches and home are just some categories of products where exclusivity is validated as a marketing and branding strategy.
Ferrarri, Mercedes-Benz, Porsche and Jaguar are world-renowned car franchises. Ferrarri has created a worldwide thirst for these stylish, super-fast, super-premium sports cars with the & ldquo; Prancing Horse & rdquo; on the hood. There are only a handful of licensed Ferrarri dealers in the United States. Production is kept very small and all cars are typically sold two years before they are produced. This ensures that the value for used vehicles remains very high. In fact, many old Ferrarri appreciate the value, something that can be said of many car brands.
Rolex, Baume Mercier, Audemars Piguet, Chopard and Patek Phillippe are a smattering of expensive watch brands that are valued for their exclusivity, beauty, craftsmanship and perceived value. They are sold in very few retail stores. The very fact that they are hard to find, expensive to buy and limited production makes each of these watches highly desirable.
The cosmetics houses located at the end of the market differ by restricting distribution to a few selected stores in a given trading area. Clarins, La Prarie, Guerlain, Cr is me de la Mer, and Estee Lauder are very demanding about where their products are located. This ensures that consumers recognize that, due to their limited availability, these products are special and therefore justify an increase in retail prices.
We look at hundreds of new products every year. Some selected offer that unique blend of new consumption and performance features that ensure success. A strategy that we often use to launch such products is based on exclusivity, at least initially. It is very easy to “defeat” & rdquo; and replicate high-end success with less expensive versions of your mass product. If you do not secure this space, the competitors will certainly do it.
Alfred Sloan, the entrepreneurial and organizational genius who created General Motors in the 1920s, developed the multi-price strategy of offering something for everyone. Cadillac was exclusively for the rich. Buick and Oldsmobile have been positioned for the middle class, older customers, looking for a discreet style and soft laps. Pontiac was sportier and Chevrolet was the mass market, basic level brand. Sloan acknowledged that today’s Chevy driver, as he prospered and aged, would have gone up the GM food chain.
Charles Revson has adapted this multi-level channel distribution strategy with Revlon cosmetics. Etherea was its exclusive commercial brand. Ultima II was intended for department stores. For a wider distribution in department stores and boutiques, Revson has sold its Revlon brand. These Revlon business lines were differentiated by price, packaging, product requests and performance. He offered something for every consumer band.
There are a number of advantages for an exclusivity strategy. Generally, the initial inventory is mitigated, freeing up capital for sales promotion. Limited distribution means that the entrepreneur can be more attentive to every single door that carries its own items. Fewer ports can mean that the features and benefits of the product can be demonstrated to individual consumers. This creates word of mouth and referrals. Minimizes the need for expensive media advertisements. Merchandising at the point of sale is more manageable when distribution is limited. The opportunity to grow organically, the turtle’s approach; it often allows the new company to establish a much more stable base from which to expand.
A type of exclusivity strategy can be built for products in practically any category. From liquor, beer, hardware, food, lingerie, pet products, the list goes on and on, there are opportunities to successfully market ideas and make them successful using limited distribution techniques. This tried and true methodology is underutilized, but often the best way to penetrate a very difficult market.
from: Geoff Ficke