Lights, Car, Action
This story appears in the February 2000 issue of Startups. Subscribe »
At 21, Jack Panzarella moved back home with his parents to cut his expenses so he could introduce his first invention, a high-voltage neon light that operates using a transformer. Powered by a car's battery, the Undercar Neon makes a car's undercarriage glow in the dark. Now Panzarella, 29, has three major product lines--Auto-Neon (a line of car products), Sport-Neon (for in-line skaters) and Home-Neon (a line of clocks, sculptures and accent lighting)--with a combined total of more than 200 products. His Wayne, New Jersey, company, Street Glow Inc., now employs more than 200 people and had estimated sales of $16 million last year.
Panzarella's parents helped him in more ways than just providing a place to live. They're both entrepreneurs, and growing up, he knew from their example that he'd someday start his own business. His idea for neon auto accessories succeeded, despite his limited budget, because his invention had drama and pizzazz--in other words, he had a product people couldn't help but notice.
No invention sells as well or as easily as an eye-catching one. Panzarella has expanded his business by capitalizing on his flair for the dramatic and using event-oriented marketing tactics to build customer awareness.
Don Debelak (dondebelak@uswest.net) is a new-business marketing consultant who has been introducing new products for more than 20 years. He is the author of Bringing Your Product To Market (John Wiley & Sons, $19.95, 800-225-5945)
Illuminations
Panzarella's idea germinated when he was working as a repo man in Florida. He repossessed a car that had a neon tube attached to its undercarriage. Curious about what a neon light was doing there, he learned the car was a custom show vehicle that was often on display. The neon light was turned on to highlight the car and give it an extra dose visual appeal.
Panzarella thought this was a great idea that could be applied to ordinary cars. The only problem: The light ran off a big transformer that had to be plugged into an electrical outlet. Panzarella, a diehard car enthusiast, knew he'd have a great product if he could just figure out how to build a transformer that could run off the car battery.
Eventually, he developed a new transformer, moved back home to New Jersey, and started his sales campaign by driving around at night in a car equipped with Undercar Neon. "People would stop me all the time and ask where they could get the product. It was hot," he recalls. "Police [officers], who tend to be car enthusiasts, especially liked it, and they stopped me all the time to ask where they could buy their own."
Building off that customer enthusiasm, Panzarella started building a network of car stereo distributors and dealers who sold his product, which he packaged in a do-it-yourself kit. He also picked up two big mail order accounts: Crutchfield, which specializes in car stereo equipment, and J.C. Whitney, a catalog supplier of auto parts and accessories.
For a while, Panzarella concentrated on adding new products, including neon lights for license plates, neon gear shifts and neon accent tubes to install under a car's dash or seat. Once he'd created his line of products, he wanted to attract attention, so he launched an event marketing program.
Panzarella decided to capitalize on Sound-Off competitions--contests to see whose car has the best stereo system--by introducing Glow-Off competitions (not affiliated with Sound-Off), where people bring their neon-lit cars to contests and vie for awards. The biggest Glow-Off, sponsored by a large auto accessory dealer, Number One Parts Inc., is held every September at the Atlanta Motor Speedway, attracting thousands of people. Events like Sound-Offs and Glow-Offs are the type of big attractions that build customer awareness and keep a product's sales growing.
In 1998, Panzarella decided the in-line skate market was ripe for his neon lights. People skating at night want to be seen, and safety is a prime concern of the thousands of in-line skate clubs that often sponsor night skating sessions. Once Panzarella ironed out the details of producing a neon light that ran on batteries, he was ready to take on the market. His ultimate goal was to sell to big retailers like The Sports Authority, Sportmart and Big 5 Sporting Goods. But Panzarella didn't want to just put the product in stores; he wanted to create the same drama and excitement he had with Undercar Neon.
He started by locating distributors that sold to roller rinks. Why? Panzarella wanted to create a "buzz" in the market, and this way, the visual appeal of a hot skater with neon lights could be seen by hundreds of prime prospects. Next, he got the endorsement of Scott Olson, inventor of the original Rollerblade in-line skate, who felt Sports-Neon had great safety features.
Just months after its introduction, Sport-Neon's distributor sales were way over projections. With the market buzzing, support from the father of the in-line skate industry, and high demand from consumers, Panzarella was talking to all the big retail chains and lining up sales agreements. By waiting until he created excitement in the market before approaching retailers, Panzarella gained negotiating leverage. The proven consumer demand should produce immediate sales once stores stock Sport-Neon.
In order to succeed, your product has to give customers a compelling reason to buy. Maybe the product has a better design than the competition's, is a better value, works more effectively, or has more features to help customers meet their goals. All these improvements require you visual communication of how and why your product is better.
Products with dramatic visual flair are easier to sell because people immediately notice them. In many cases, in fact, eye-catching appeal is the main reason a product sells.
If you want to match Panzarella's success, look for product ideas that turn people's heads and get them saying "Wow!" Capture their attention, and you'll capture success of your own.
Knock, Knock
Inventors often ask, "How do I prevent overseas competitors from knocking off my product?" Jack Panzarella, who has held off foreign competition even though his neon products have been copied by overseas companies, tells what's worked for him: "I've tried to keep expanding the product line, upgrading the older products in the line, and offering a wide variety of products for auto accessory dealers to sell. A retailer can't buy the entire product line from anyone but me. So far, retailers haven't wanted to carry neon products from two companies." U.S. companies have one big advantage over foreign competition--they know more about U.S. customers. But that advantage doesn't mean much unless you translate it into new products and product upgrades that meet the constantly changing needs of the market. Panzarella has several patents and trademarks, but beyond that, he knows fending off the competition requires a wide, innovative and up-to-date product line that retailers want to carry.
Isn't That Specialized?
Most of Jack Panzarella's auto accessories are distributed through installers that sell car stereos. Specialized distributors are an ideal market for inventors, because they make a living from a small market with a limited number of vendors. A new product with sales appeal is most easily sold in this type of distribution channel.
When Panzarella launched his Sport-Neon line, he started with another specialty distribution channel--roller rinks. The distributors were happy to carry and promote Sport-Neon because it added much-needed revenue to their slim product line.
To find specialty distributors:
- Ask retailers for distributors' names. Specialty market companies usually buy from only two to three distributors.
- Read trade magazines targeting your prospects. Ads from specialty distributors appear in most issues. For example, car stereo installers get Mobile Electronics (Bobit Publishing, 310-533-2400); roller rink owners get Rinksider Magazine (Target Publishing Co. Inc., 614-235-1022). Find relevant publications by looking in the Gale's Directory of Publications (available in larger libraries). Call the magazines and tell them you're a manufacturer in the business, most will send you a free copy.
Contact Source
Street Glow Inc., (800) 925-9921, http://www.streetglow.com
