A Novel Dilemma
The Entrepreneurs: Brian Glover, 35, and Francisco Guerra, 34, founders of Drink Safe Technology in Plantation, Florida
Product Description: The Date-Rape Drug Personal Test Kit is a business-card-sized test strip designed to reveal the presence of two of the most popular date-rape drugs, gamma hydroxybutyrate (GHB) and ketamine. Users simply place a few drops of their drinks on the card's two test circles. If either test circle turns blue, it's an indication the drink could be tainted. The product sells nationwide for $1.25 per card, or $7 for 10 cards at convenience and grocery stores.
Start-Up: $150,000 cash and up to $700,000 in donated time from Glover, Guerra and other researchers working on the idea
Sales: Approximately $250,000 in 2002; $7 million projected for 2003
The Challenge: Reaching customers when your one-of-a-kind product lacks an established network of distributors, wholesalers, retailers, catalogs, manufacturer's sales agents or other methods to sell through
Brian glover and francisco guerra knew people would want to buy their innovative product-especially young women who enjoy the nightlife scene. But without the support of bar and nightclub owners who didn't want to call attention to any dangers associated with their establishments, and without a ready distribution channel in place, these entrepreneurs faced their share of obstacles getting the product in front of customers. Here's a rundown of what worked for them:
1. Check out your initial impulses. Glover and Guerra's first marketing idea was to sell the product as a promotional item to liquor companies. According to Glover, "On average, most large liquor manufacturers like Budweiser and Bacardi distribute over 500 million coasters each per year for advertising purposes."
Guerra adds, "We thought liquor companies would see our product as a great public service, since date rape involved the liquor industry." But the liquor companies didn't show any interest-and the inventors' efforts with pharmaceutical companies also led nowhere. Although those first attempts didn't succeed, they were still worth a try. Had they worked, the inventors could have used an outlet that would have sold millions of their products. The moral? It never hurts to aim high where you can make the most money.
2. Study the target customers. When Glover and Guerra's publicity generated responses on their Web site, the results helped them home in on their target customers. "It was obvious the people most interested in the product were young women and mothers of young women," Guerra says. "We knew those were the customers who wanted to buy our product."
3. Choose a target market. Once marketers know who the customer is, they can determine where those customers make certain purchases. "We wanted to have a product in a location where women make a last-minute or emergency purchase at night, and we felt convenience stores were a prime market," says Guerra. Another option for the inventors was to sell the product through drugstores. But in the end, convenience stores proved to be the better option-there are more locations, and they stay open later at night.
4. Generate a positive story. Retail-store buyers are always reluctant to take on a new product, so inventors need to prove that customers will want to buy their product. "We've found that three out of five young adults will tell you they know someone who has been [the victim of] date rape," Guerra says. "There are close to 150 stories per day about date rape in publications around the country. We have been able to get [hundreds of] stories published [about our product], and when we went to trade shows, buyers were aware of those stories."
5. Make sure the product is ready to go. Retail-store buyers can look at a product they're familiar with and imagine how it will be packaged and sold in stores. They're less able to do that with products they've never sold before. Glover and Guerra sold their product on their Web site for one year before their first big trade show, the 2002 National Association of Convenience Stores in Orlando, Florida. Luckily, the partners had the packaging, pricing and product kinks all worked out before presenting the product to buyers. That professionalism helped them land their first big account: Circle K convenience stores.
6. Plan how you'll sell to the market. Once Glover and Guerra had selected their target customer and market channel, they wrote a business plan in early 2002. They researched trade shows, trade magazines, market outlets and distribution methods before approaching the market. This kind of preparation helped them determine the most cost-effective way to introduce their product to the market.
|Inventors often do
best when their new product fits an emerging trend-before big,
established companies take over the market segment. Trade
magazines, which frequently depend on input from established
marketers, often only predict trends after they've begun. To
beat the crowd, check in periodically with a futurist, an expert
who looks past the obvious to predict what might happen tomorrow.
For more details, go online and visit the Association of Professional Futurists.|
Another good resource is The Deviant's Advantage: How New Fringe Ideas Create Mass Markets (Crown Business Publications) by Ryan Matthews and Watts Wacker. These futurists show how they look at the market to uncover where innovation often starts. The book, which includes numerous examples, explains the process a deviant thinker goes through to discover the perfect product and get it to the market.
A word of caution: Logical, sequential thinkers will have trouble adjusting to the book's wild and unpredictable style, which is a path futurists often follow.
1. Don't be easily discouraged. Even experienced marketers have trouble introducing a new type of product. Retail-store and distributor buyers are always afraid of making a mistake, and you might have to approach them several times before they'll listen seriously to your sales proposition.
2. Distributors will make room for a winning product. One of the confusing factors about the market for inventors is that every buyer wants to carry the next hot product, yet they also fear handling new products. The reason for the contradiction? Only one out of hundreds of new products will become the next big thing.
Your job is to show the buyer your product has a chance. If you generate publicity, find success by selling the product at fairs and shows, acquire endorsements from people who are important to the market or highlight a success story, buyers will listen.
3. Understand your target customer and the distribution channel. Most inventors who succeed have learned virtually everything about their target customer and market, or they've aligned with someone who does. From a retail buyer's perspective, inventors come and go in a big hurry. So expect them to be skeptical of your staying power, especially if you don't seem to know the ins and outs of your chosen distribution channel.
4. Watch your money. Your money will run out quickly if you have to move from one distribution channel to another. You may need new packaging, and you'll definitely need to attend trade shows regularly to meet new distributors. This all costs money, and you won't be able to attack a second market if your money runs out. Inventors should always spend their money slowly, but this is particularly true when a product lacks an established distribution channel.
5. Big companies are a hard sell in tough times. One mistake inventors often make is to assume that a big company is an easy sale. In reality, just the opposite is true. Big companies move slowly and are rarely the first ones to take on an innovative product, primarily because so many people need to approve each major decision. And that's in good economic times. When the economy slows, big companies are more interested in cutting costs, which typically means little innovation occurs.
|Are you stuck
figuring out how to make a prototype or the design of your final
product? Do you need stronger or lower-cost materials? The Thomas Register of American
Manufacturers, available at most larger libraries and
online, is the place to look. This resource, composed of more than
20 huge volumes filled with product information, provides
information on most suppliers for virtually every type of
component, from cheap fasteners to million-dollar production
equipment. Many of the companies have even included a product
catalog in the register.|
To find what you're looking for, search under the appropriate category, then call the companies and explain what you need. If they can't help, they'll most likely refer you to someone who can. Don't just call one or two firms-call them all until you've determined who fits your needs best.
Don Debelak is the author of Think Big: Make Millions From Your Ideas. Send questions to firstname.lastname@example.org.