by: Geoff Ficke
Many of the inventors and entrepreneurs we deal
with in our consumer
product marketing business approach us with dreams of selling
product to the masses. This can be lucrative and a proper launch
strategy in cases where all of the stars in the galaxy line up
properly. How often does that happen?
Mass marketing success is contingent on economies
of scale, production advantages and large budgets for penetrating a
clamorous commercial environment. Large, established companies, think
Procter & Gamble, Unilever, Rubbermaid, have all of the tools
needed to launch
products into 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 basis, available in select stores, and usually at
a higher price than similar products, consumers tend to attach a higher
perceived value to these items.
There are numerous examples of exclusivity that
can be used as a template when considering the proper strategy to
utilize for a new consumer product launch. Retailers that sell high-end
limited distribution products are very profitable and enjoy exceedingly
high profiles. Bloomingdales, Tourneau, Neiman Marcus, Harvery Nichols,
Harrod’s, and Ralph Lauren are just a few of the stores that appeal to
the “carriage trade”. These stores seek goods of high quality, that can
be priced at a premium, and that are not available from competitive
outlets. This creates a loyal customer for the types of merchandise
that can only be found in these doors.
Automobiles, jewelry, ready-to-wear, cosmetics,
watches and home décor are only a few product categories where
exclusivity is validated as a marketing and branding strategy.
Ferrarri, Mercedes-Benz, Porsche and Jaguar are
world famous automobiles franchises. Ferrarri has created a worldwide
thirst for these sleek, super fast, super priced sports cars with the
“Prancing Horse” on the hood. There are only a handful of authorized
Ferrarri dealers in the United States. Production is kept very small
and all cars are typically sold two years before they are produced.
This insures that value for used vehicles remains very high. Indeed,
many old Ferrarri’s appreciate in value, something that can be said of
very automobile brands.
Rolex, Baume Mercier, Audemars Piguet, Chopard and
Patek Phillippe are a smattering of the very expensive watch brands
that are considered to be prized for their exclusivity, beauty, artisan
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.
Cosmetics houses at the highest end of the market
differentiate themselves by limiting distribution to a select few
stores in any given trading area. Clarins, La Prarie, Guerlain, Crème
de la Mer, and Estee Lauder are very choosy about where their products
are placed. This insures that consumers recognize that by their very
lack of availability these products are special, and therefore, justify
higher retail price points.
We look at hundreds of new products each year. A
select few offer that unique blend of novel consumer features and
performance benefits that insure success. A strategy we often use to
launch such products is built on exclusivity, at least initially. It is
very easy to “knock yourself off” and replicate high-end success with
less expensive mass-market versions of your product. If you do not
secure this space, competitors certainly will.
Alfred Sloan, the business and organizational
genius that created General Motors in the 1920’s, crafted the
multi-price point strategy of offering something for everyone. Cadillac
was exclusively for the rich. Buick and Oldsmobile were positioned for
the middle class, older customers, seeking unobtrusive styling and soft
rides. Pontiac was sportier and Chevrolet was the mass market, entry
level brand. Sloan recognized that today’s Chevy driver, as they
prospered and aged, would move up the GM food chain.
Charles Revson adapted this multi-level channel
distribution strategy with Revlon cosmetics. Etherea was his very
exclusive carriage trade brand. Ultima II was for fine department
stores. For broader distribution in general department stores and
boutiques Revson sold his Revlon brand. These Revlon corporate lines
were each differentiated by price point, packaging, product claims and
performance. He offered something for every range of consumer.
There are a number of advantages to an exclusivity
strategy. Typically initial inventory build out is mitigated, freeing
up capital for sales promotion. Limited distribution means that the
entrepreneur can be more attentive to each individual door carrying
their items. Fewer doors can mean that product features and benefits
can be demonstrated to individual consumers. This creates word of mouth
and referrals. It minimizes the need for expensive media advertising.
In-store merchandising is more manageable when distribution is limited.
The opportunity to grow organically, the turtle approach; often enables
the new company to establish a much more stable foundation from which
to expand.
A type of exclusivity strategy can be constructed
for products in virtually any category. From liquor, to beer, to
hardware, to foodstuff, to lingerie, to pet products, the list goes on
endlessly, there are opportunities to successfully commercialize
ideas and make them successful using limited distribution
techniques. This tried and true methodology is under-utilized, but
often the best way to penetrate a very tough marketplace.
Article Source:
http://www.articlesbase.com/marketing-tips-articles/
an-exclusivity-strategy-can-be-crucial-to-successful-brand-marketing-1214097.html About the Author
Geoff Ficke has been a serial entrepreneur for
almost 50 years. As a small boy, earning his spending money doing odd
jobs in the neighborhood, he learned the value of selling himself,
offering service and value for money.
After putting himself through the University of Kentucky (B.A.
Broadcast Journalism, 1969) and serving in the United States Marine
Corp, Mr. Ficke commenced a career in the cosmetic industry. After
rising to National Sales Manager for Vidal Sassoon Hair Care at age 28,
he then launched a number of ventures, including Rubigo Cosmetics,
Parfums Pierre Wulff Paris, Le Bain Couture and Fashion Fragrance.
Geoff Ficke and his consulting firm, Duquesa Marketing, Inc.
(www.duquesamarketing.com) has assisted businesses large and small,
domestic and international, entrepreneurs, inventors and students in
new product development, capital formation, licensing, marketing, sales
and business plans and successful implementation of his customized
strategies. He is a Senior Fellow at the Page Center for
Entrepreneurial Studies, Business School, Miami University, Oxford,
Ohio. |
