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Creating Blockbuster Products

Posted By Ron Sidman, Sunday, September 23, 2012
Updated: Tuesday, July 21, 2015

My guess is that most JP industry CEOs dream of finding at least one product that is so successful that it is transformational from a company sales and profit standpoint. So, how do you develop blockbuster products that generate tens of millions in sales for years and years and elevate your brand to the "must-have" category in the eyes of both retailers and consumers? You can get some clues by looking at some of the most noteworthy industry product success stories. There are many to choose from but I selected a few with which I am most familiar. What you will see is that there are 4 interesting things that these examples have in common:

·         They solved a previously unsolved significant parenting problem. 

·         They are protected by patents or other competitive barriers such as high cost of entry. 

·         They were not necessarily "overnight successes". 

·         They were not ideas generated by market research.

 Avent Bottle 

This was one of those classic tipping point stories of a product that travelled under the radar for years before catching on. The parent company had the good fortune of generating healthy revenues from a non-juvenile division that enabled the owners to stick with this product for a number of money-losing years until word of mouth took hold. The Avent bottle was one of the first to claim that it could reduce colic and extensive advertising and PR efforts in support of this feature triggered positive word of mouth that helped catapult the product to international success. This was also a story of a husband-wife team with a mix of talents that blended beautifully together. The husband was an outstanding, quality-conscious, patent-savvy engineer and the wife a highly experienced marketer. Their idea of market research was simply to create a product that they themselves would want to use. Restricting distribution of their product to specialty stores also helped enhance the cachet of this premium made-in-the-UK product line. 

Boppy Pillow

It also took a while for the Boppy Pillow to become a phenomenon. The product was initially created by a mom to satisfy a request from her daughter’s daycare center for something to help prop up babies. However, its ultimate success came from serving a completely different purpose than even the inventor was aware of. With the increased popularity of breastfeeding, there was a growing need for something that would allow moms to prop up their babies in a position comfortable for both mom and baby. The Boppy Pillow filled that need and was protected by a strong patent. Yet, in spite of winning a JPMA show new product award when first introduced around 1990, the founder faced significant financial difficultiesearly on and needed aid from an SBA microloan to carry on. A PR breakthrough occurred in 1998 when the product appeared in an episode of Friends. Spurred on by that publicity, 12 years after being introduced it was named by American Baby as the #1 baby product and is still a leading "must-have" product today.  

Take & Toss Cups

Forgive me for including one of my own creations, but I think it’s fair to classify this product and the line of related spinoff products it inspired as a true industry success story. First introduced in 2002, it is still a strong multimillion dollar product line ten years later. This was a case of applying a production technology from another industry to juvenile products. Gladware had been introduced in the housewares industry using thin wall injection molding for containers where traditional injection molding had previously been used. The result was a significantly lower cost per piece and the introduction of the concept of "semi-disposability". We felt that by applying this technology to training cups, we could create a product with considerable appeal to parents because of both higher value and the added convenience of not having to worry about losing or throwing away cups. While the idea was not patentable, the cost of tooling and equipment for this type of manufacturing was so high that it acted as a barrier to competitive entry long enough for us to get the product well-established. The long, stressful lead time for us was the time from the initial idea to actually getting it on the market with a level of performance that met our standards. As I recall, this was about 3 years. Fortunately, the risk paid off and the product was successful almost immediately because of the appeal of the price proposition.  

 

Breakthrough products like these can be the key to achieving the kind of financial success we all would like to have in our businesses. There are many ways to create them but what at least these examples indicate, is that you don’t necessarily need a huge marketing and product development staff and budget to create winners. What you do need is a "better mousetrap" idea that you can protect and the patience and financial wherewithal to stick with it until it catches on.

 

Disclaimer: No warranties, express or implied, are contained herein. Purchasers, or users, of this information acknowledge that any errors or omission in the performance of the material contained herein or, any injuries resulting from its use, are the sole responsibility of the purchaser or user, and not JPMA or the author. Opinions expressed are those of the author only.

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The Good Thing About Tough Times

Posted By Ron Sidman, Monday, July 23, 2012
Updated: Tuesday, July 21, 2015

It may be an understatement to say that life in the juvenile industry has not gotten any easier over the past few years. Not that there were ever true "glory days" when the business was easy and the profits flowed freely. But, it seems that the prolonged weak economy, increased costs and uncertainty associated with tighter regulations, and unrelenting pressure from major retailers have combined to create a lot of sleepless nights lately for many JPMA CEO’s.

During times like this, it’s always tempting to blame the economy, hunker down, and wait for things to get better. That may not be such a good idea. First of all, things may not get better quickly enough for you to stay alive. But, even if they do, you may actually be squandering a golden opportunity.

Think of an economic downturn as a stress test for your company—not unlike the monitored treadmill exercise used to detect heart abnormalities. Healthy companies should still do reasonably well when the economy is weak just like healthy people should be able to pass a cardiac stress test with no ill effects. However, there may very well be design flaws in your current business model that were all but invisible when the economy was booming but will stand out like blocked arteries in an angiogram when business slows.

Or, you may have been aware of the need to make painful improvements like reduce costs or make personnel changes but were reluctant to perform the necessary surgery while things were going reasonably well. [These medical analogies show I’m obviously spending too much time talking to my contemporaries in the industry.] 

If you’re not getting the financial results you’d like during the current economic malaise, here are some of the questions you might want to ask yourself:

Is your competitive advantage still strong enough?

Be honest with yourself. Do your products really have enough value superiority over your competitors such that you are the clear choice for your target customers? If not, how can you regain your edge? Accomplishing this will not only make your products more appealing to consumers but will also make you more important to retailers thereby putting you in a better price bargaining position.

Are you maximizing sales with your current customers—retail and consumer?

This is the low-hanging fruit. Are you putting in the effort to really understand the needs of your existing retail and consumer customers so that you don’t miss opportunities to gain ground. Could you be selling more products to consumers who are happy with what they’ve bought from you? What would it take for your major retail customers to expand your presence?

Are you missing opportunities to expand distribution?

Once you’ve maximized business with your current customers, what are all the possible new revenue streams you could create? If you’re a regional company can you become national? If you’re national could you be international? Are there new classes of trade that have potential? Be careful though. Some new markets may be costly to enter.

Can you eliminate or re-price programs, products, services or even customers that are not profitable?

I’ve always been a big advocate of analyzing profitability by customer, product, region, salesman, etc. If you’re not making money at these micro-levels, something probably needs to change.

Are you managing your cash flow as well as you could?

You can get away with sloppy cash flow management when things are going well. But it will come back to haunt you in tough times. Make sure you have a good cash flow projection process in place so you are not blind-sided by cash shortages. But, just as importantly, get innovative about what you could do to radically decrease your inventory requirements, reduce credit losses, ramp up collection speed, or get better payment terms from your suppliers.

Is it time to make those tough personnel decisions?

A business friend of mine used to talk about how, when business slowed, he would simply keep laying off employees until he was virtually the only one left. Hopefully, you won’t find that necessary. However, it might be time to objectively assess both the number of people in your employ and their productivity. This is not something that should be done without concurrently assessing the quality of the processes that your employees are operating within as well as the training you are providing.

Are you leveraging new and emerging technologies?

And, while you’re looking at your processes, are you taking advantage of software and automation that could reduce operating costs and improve quality? Are you staying up to date with what’s out there that’s working for others?

Have you read my earlier blog posts?

Excuse me for a little self-promotion, but if you haven’t already, you might benefit from reading or re-reading my previous blog posts where I offer a number of other revenue enhancement and cost reduction ideas. Or, even better, take advantage of JPMA’s CEO Mentor program where for a small donation to K.I.D.S. I’ll give you some objective feedback regarding your current business model. 

If you look at economic downturns as opportunities to improve rather than times to head for the bomb shelter, you can come out the other end as a much stronger company better positioned for future recessions. What’s this downturn telling you about your business?

 

Disclaimer: No warranties, express or implied, are contained herein. Purchasers, or users, of this information acknowledge that any errors or omission in the performance of the material contained herein or, any injuries resulting from its use, are the sole responsibility of the purchaser or user, and not JPMA or the author. Opinions expressed are those of the author only.

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How Best to Adopt Sustainability

Posted By Ron Sidman, Monday, June 4, 2012
Updated: Tuesday, July 21, 2015

In my previous post, I talked about why it might be time for you to consider embracing the principles of business sustainability. Let me be crystal clear right up front. I’m not talking about hugging trees, kissing owls on the beak, or making your packages out of recycled tractor-trailer tires. I’m talking about operating your business using fundamental business common sense. It’s my feeling that the concept of sustainability should not be thought of in just the “impact on future generations” sense but also in the literal sense of ensuring survival of your organization. As CEO, that’s your job. And if you do it right, you’ll automatically address the morally appropriate economic, social, and environmental issues in a business-justifiable way.  

In your personal life, the benefits of living a healthy life style, maintaining good relationships with family members, treating neighbors with respect, and being involved in your community are irrefutable and broadly accepted. It’s also understood that sometimes you have to suffer short-term pain for long-term gain. By doing these things you are not really sacrificing for the benefit of others, you are simply optimizing your own long-term happiness and health.

The same holds true for a business. Short-term decisions have long-term implications. Sometimes you have to regress before you progress. And, no business is an island. Every company’s actions impact the “system” in which it operates and are impacted by the same “system”. Embracing sustainability is nothing more or less than making sure your business model is designed and updated with the benefit of a long-term and system-wide view. To do otherwise is to be haunted by unintended and unanticipated consequences and to put your company at unnecessary risk. Well-managed companies have always been concerned about sustainability in the literal sense. What’s relatively new is an increased recognition of potential negative economic, social, and environmental consequences of business activities and an urgency to reflect that knowledge in your business model design.      

Here are some suggestions about how you can incorporate this concept of sustainability into the steps of a standard, typically annual, business model improvement process:

Step 1: Reconfirm your business’s PURPOSE
When reviewing your company’s Purpose, identify not only your customers but also your key stakeholders (non-customers who can affect or be affected by your business to a significant extent). Typical stakeholders would be investors, employees, suppliers, communities in which you operate, government agencies, etc. 

Step 2: Reconfirm your LONG-TERM VISION
Again, include both customers and key stakeholders in your vision of the ultimate role you want to play and the affect you want to have including what you want your reputation to be. For example, you might want to be the company most respected for awareness of parent/child needs. You may want investors to consider you to be very cost-efficient. And, you may want to be a respected and treasured company in your community.

Step 3: Reconfirm your VALUES
Make sure your documented Values will create a culture that supports your updated Purpose and Long-Term Vision. Based on the vision elements above, you may want values related to customer focus, continuous improvement, and community responsibility.

Step 4: Identify current and likely medium-term future REALITY
Conduct your “SWOT” analysis of internal strengths and weaknesses and external opportunities and threats maintaining your new, broader perspective that includes customers and all key stakeholders. Data gathering should include soliciting feedback from both. Make sure you specifically include issues related to economic efficiency (innovation, productivity, material usage), social equity (employee health, impact on local communities, transparency), and environmental accountability (pollution, land use).

Step 5: Create a MEDIUM-TERM VISION
When you imagine what you’d like things to be like 3 or 5 years from now (qualitatively and quantitatively), think in terms of how much progress you’d like to make along a path from your SWOT-defined Current Reality towards your Long-Term Vision. Based on the possible long-term elements mentioned earlier, your Medium-Term Vision might include new products that respect parental environmental concerns, redesigned packaging that reduces package and packing costs, and internal programs that encourage employees to be active in local community charity events.

Step 6: Identify your priority ONE-YEAR PROJECTS
For each Medium-Term Vision element, what can you accomplish in the next year to make the most progress?

Step 7: Ensure successful project IMPLEMENTATION
Of course, I’d be remiss in not reminding you that all previous steps are worthless if you don’t ride the One-Year Projects through to successful implementation.  

By using a business model development process to address sustainability issues, you can ensure that you are acting responsibly while adopting only those initiatives that make true business sense for you.   

In my next post, I’ll explore the role that trade associations like JPMA could play regarding supporting their members’ sustainability initiatives.

 

Disclaimer: No warranties, express or implied, are contained herein. Purchasers, or users, of this information acknowledge that any errors or omission in the performance of the material contained herein or, any injuries resulting from its use, are the sole responsibility of the purchaser or user, and not JPMA or the author. Opinions expressed are those of the author only.

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Is it Time to Fully Embrace Sustainability?

Posted By Ron Sidman, Tuesday, May 1, 2012
Updated: Tuesday, July 21, 2015

CEO’s are often understandably skeptical about the various management “movements” that come and go over the years. However, if I were running a company today, I would be totally embracing the so-called “sustainability” movement—not because it’s the latest rage but because it makes fundamental long-term business sense.

The movement arguably originated in 1983 when the U.N.’s Bruntland Commission was formed to address what was called “the accelerating deterioration of the human environment and natural resources and the consequences of that deterioration for economic and social development”. They later defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.

After getting relatively little serious attention from most companies, especially in the U.S., for many years, sustainability seems to finally be coming of age. In a winter 2012 study conducted by the MIT Sloan Management Review and the Boston Consulting Group entitled “Sustainability Nears a Tipping Point”, 70% of surveyed companies “have put sustainability permanently on their management agenda”. In fact, two-thirds felt it is a necessity to be competitive today and in the future.

Pressure from consumers has clearly been one of the driving forces. A 2011 Nielsen survey of 25,000 consumers globally revealed a high and in many cases rising degree of concern about sustainability issues such as water shortages and pollution, packaging waste, pesticides, air pollution, and climate change. It is true that while consumers may be favorable towards companies who adopt sustainability practices, they aren’t necessarily willing to pay a price premium. 83% of consumers surveyed wanted to see companies implement programs to improve the environment. However, only 23% would pay more for eco-friendly products. Nonetheless, green concerns are clearly influencing purchase decisions. While I couldn’t find a breakout specifically for parents or grandparents of young children, this target market for juvenile products would logically be especially concerned about “. . . the ability of future generations to meet their own needs.”

These same consumer concerns as well as visible environmental issues such as air and water pollution and water shortages have resulted in an increase in federal and local government as well as public interest group involvement worldwide. Past history tells us this will only increase as we go forward much like child safety regulatory activity over the past 40 years.

On the self-serving side, raw material price increases and volatility have also spurred business interest in sustainability initiatives such as energy and material use reduction that directly improve the bottom line. Not surprisingly, Wal-Mart has been leading the sustainability for cost reduction charge since 2005. The cost reduction aspects of sustainability fall right into Wal-Mart’s business model wheelhouse and, if you’re a Wal-Mart supplier, you have no doubt already been coaxed into making packaging changes that have reduced material usage or shipping costs.        

While responding to consumers and government agencies and reducing costs have been the primary factors driving companies towards the adoption of sustainability principles, I believe there’s actually an even more basic reason to incorporate these concepts into your management system. The fact is that the principles of sustainability represent a perfectly logical and desirable enhancement of a company’s business model development process. Embracing sustainability will cause you to take a broader view of the “system” in which your business operates resulting in the creation of a more robust and effective business model and resultant increased long-term business success.

In my next post, I’ll describe how you can embrace sustainability in a way that makes sense for your company. I’ll also talk about the role JPMA as a trade association might want to play in educating and supporting its members as well as interfacing with government agencies and NGO’s in the same way it has with safety issues.    

Disclaimer: No warranties, express or implied, are contained herein. Purchasers, or users, of this information acknowledge that any errors or omission in the performance of the material contained herein or, any injuries resulting from its use, are the sole responsibility of the purchaser or user, and not JPMA or the author. Opinions expressed are those of the author only.

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JPMA: 50 Years of Invaluable Support

Posted By Ron Sidman, Wednesday, March 7, 2012
Updated: Tuesday, July 21, 2015

Hard to believe it’s been 50 years since a handful of enlightened juvenile industry CEOs recognized the value of competitors working together to serve their common interests. Thank goodness they did! As a former JPMA board member and officer, I’ve experienced the organization from the inside and out. And while, like other volunteer organizations, the inner workings sometimes feel more like Congress than a well-oiled machine, and while at times it has been misunderstood and underappreciated, I shiver to think what the industry would be like today if there were no JPMA. We all owe JPMA a debt of gratitude.

Like all organizations that survive the test of time, JPMA has continually evolved over its history to serve the ever-changing needs of its membership. Much of the credit for this goes to the many industry leaders who were willing to volunteer their time, often at the expense of attending to their own company responsibilities, to further the interests of the industry as a whole. Ironically, as is the burden of people willing to make tough decisions, they sometimes had to suffer criticism from some of the members they were working so hard to serve. Yet their selfless dedication to creating a better industry for all enabled them to persevere. Thanks also ought to go to the management and staff of Association Headquarters for knowing how to accomplish the daunting task of keeping a volunteer trade association alive, well, and productive. It’s not easy.

My own company benefited in countless ways. The JPMA-originated trade shows allowed us to position ourselves as a significant player in the industry. JPMA’s regulatory advocacy always injected some rationality into the regulatory process whenever emotion was driving things out of control. For example, life would have been a lot tougher if we did not have Rick Locker at our side during the phthalate crisis of the late 90’s. The certification program gave us a voice in standard setting and advance information that could guide our product development. JPMA did a great job of representing the interests of manufacturers like us with our retail customers on the tough issues we could not address on our own. And, my personal interactions with other board members and industry leaders at board meetings and other JPMA events greatly enhanced my understanding of what was happening in the industry allowing me to anticipate future trends and do a better job of running my company. The fact was JPMA was always there for us when we needed it.

But, the ultimate JPMA benefit in my opinion is the people you meet through the association in the industry and at AH who become your friends, your contacts, your confidants, your golf partners, and maybe someday even your employees as happened with me. We are all blessed with an industry made up of great, caring people. I suppose it should be no surprise. People who dedicate their lives to making the lives of parents and babies happier and safer happen to be good people. I had the pleasure of getting to know many of them through JPMA.     

What some JPMA members never realize, unfortunately, is that you will only get out of it what you put into it. If you just sit around and wait for someone to help you, you’ll be disappointed. Be an active member. Participate in the benefit programs. Sign up for a committee. Become a board member. Go to association events. Let your voice be heard. And, of course, don’t forget to take advantage of the JPMA CEO Mentor Program (a shameless plug)!

As much as ever before, the health of the juvenile industry requires an active, responsive, supportive trade association focused on, as stated in JPMA’s mission, advancing "the interests, growth, and well-being . . . of manufacturers, importers, and distributors". It will take the continued dedication of you, the industry’s leaders, to sustain this mission going forward. But if you do, JPMA will always be there for you too when you need it.

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How to Hire (and Keep) the Right People

Posted By Ron Sidman, Friday, January 27, 2012
Updated: Tuesday, July 21, 2015

I’ll be the first to admit I made a lot of hiring mistakes in my career. In fact, for me, personnel management in every aspect was probably the most difficult and stressful part of the CEO job. I’d always relish doing the fun stuff like formulating strategies, designing new products, or working on new marketing programs. But I frankly dreaded having to deal with staff performance reviews and issues, compensation decisions, or above all coping with the loss of a key employee.

I know I’m not alone. In discussions with other CEO’s over the years, I have been struck by how many of us struggle with the people side of the business. There are many reasons for this that I won’t get into now. But suffice it to say that your success as a CEO will be greatly determined by your ability to build and maintain a strong team. Here are some things I discovered over the years that you might find useful:

·         Recognize that finding the right people is and always will be an ongoing, high priority CEO responsibility.Depending on the size of your company, you may be hiring all the new employees yourself or only your direct reports. In any case, like it or not, it’s ultimately your responsibility to make sure you have the right people at all levels. And, the bigger your company gets, the more important it becomes. No matter how robust your business model is in theory, without staffing it with the right people you’ll have an empty shell or at least an under-performing business.

·         Hire based on the requirements of your business model.One of my favorite expressions is a paraphrasing of a statement from Alice in Wonderland’s Cheshire cat—“If you don’t know where you’re going, any path will get you there.” You can’t possibly hire the right people until you have decided what business design will enable you to get and sustain a competitive advantage. The requirements of that design (which includes the corporate culture you need to create) will dictate the talents and character traits needed in each key position. An obvious example—if you want your company to be a leader in product design, you obviously will need a world class head of that department.   

·         Hire people with a track record of appropriate accomplishments. Once you know the position(s) you need to fill and the things that the holders of those positions need to accomplish, hire people who have proven, based on past history, that they can accomplish it. Anything else is an expensive crap shoot. “Behavioral interviewing” is an important tool to have in your company’s recruiting toolbox to help find the right person—with not only the knowledge and skills needed to do the job but also the strength of character. If you’re not familiar with this technique, I’d recommend the book Hiring 3.0 by Barry Shamis. Done well, behavioral interviewing will reveal knowledge, skills, initiative, and character and has been proven to be more accurate in predicting success on the job.    

·         Don’t hire until you’ve found the right person. It is all too common to hire the best of the people you’ve interviewed rather than a person who can really do the job long term. Typically, you’re under pressure to fill a vacant position that’s causing you and your company a lot of pain until filled. Succumbing to this pressure is how a lot of hiring mistakes happen. In picking key employees or marriage partners it’s always better to wait for Ms. or Mr. Right to come along.   

·         Monitor the satisfaction of “stars” at all levels in the organization. Every company has critical employees in key positions. Make sure you know who the “stars” are and set up a process that minimizes the possibility of being blind-sided by having one of them move on unexpectedly. You can do this via regularly scheduled direct or skip-level 1:1’s or periodic informal discussions.

·         No matter how good you are at recruiting and retaining, you’ll make some hiring mistakes and you’ll lose some good people. While you certainly can and should do everything you can to minimize mistakes, you’ll never totally eliminate them. It’s just too difficult a process to always get right. 

·         Correct hiring mistakes quickly. When you have the wrong person in a key position, it is costly in multiple ways. It diminishes your company’s performance. It eats up your time. It demoralizes other employees. Fight the tendency to put it off because it’s too painful to make a change or you think you’re being too critical. The quicker you correct the situation, the better off your company will be. Believe me.

·         The time will come when someone who was the right person no longer is. This is a tough one. As your company grows and the world changes, some of your long-term, loyal key employees will no longer be the right people for the jobs they hold. What do you do? The best thing for the employees involved and the company is to take action, not ignore it. In my experience, it’s usually possible to offer them a lower level position that fits their skills and, if communicated properly, they will accept and in fact appreciate it. Most of the time they are well aware they are no longer doing the job.       

A juvenile product manufacturer CEO has a lot of things on his or her plate. None is more important than making sure you have the right people “on the bus”. Among other things, the emotional dynamics of personnel management make it perhaps your most daunting challenge as you go about managing your business. Giving it the attention it deserves will pay dividends.     

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And You Thought Aggravation Was a Bad Thing

Posted By Ron Sidman, Wednesday, December 7, 2011
Updated: Tuesday, July 21, 2015

The headline on the front cover of the December 5, issue of Time Magazine reads, “Why Anxiety Is Good for You”. The article talks about how anxiety can be a positive force as long as you don’t react to it in an unhealthy way. I agree wholeheartedly when it comes to running a business. Certainly, juvenile industry companies have no shortage of things to be anxious about—whether it’s the typical things like competitive pressures and personnel issues or the daunting industry-specific regulatory challenges. I don’t have to tell you that building a successful JP business is very hard work. As a CEO, there are probably days when you wonder where you can find the strength to cope with it all.

The point is that you absolutely can and should use frustration, dissatisfaction, and fear to your advantage! I have this theory that most successful businesspeople (and athletes) are perfectionists to at least some degree. And, it is that constant emotional tension between the imperfect status quo and a more perfect vision of what things could be like that is the fuel that keeps them going. Show me a very successful person and I’ll show you someone who is “relentless” in the positive sense of the word. They are driven to close the gap between current reality and their vision of a more perfect world. In business, this “gap-closing” is the essence of “business development”—not to be confused with “business direction” which is the day-to-day management of the business as it exists today. You need to do both.

“Business development” is the creation and then continuous improvement of your business model. It doesn’t get done well by people who are content with the way things are. It gets done by people who have that “fire in the belly” caused by dissatisfaction. Of course, the trick is to not let the fire eat away your belly lining. Instead, you can convert anxiety into aspiration through a simple 5 step process:

1.       Create a culture of continuous improvement. When you or your staff members are anxious or aggravated about the way things are going, nothing is more demotivating than thinking this is the way it’s always going to be. Every good sports team I know of talks about getting better week after week. You can live through almost anything if you know that work is being done to fix what’s broken. As CEO, it’s your job to establish a corporate mindset that it’s everyone’s responsibility to keep making the organization better and better.
 

2.      Understand your current internal and external reality.In an earlier post, The CEO as “Chief Reality Officer” (link), I talked about some of the things you can do on an ongoing basis to stay in touch with current reality company-wide. Make sure you have an accurate picture of everything you and your staff can feel good about and whatever it is you need to be anxious about. A SWOT analysis is often the format used—internal Strengths andWeaknesses, external Opportunities and Threats.

3.      Create a shared medium-term (e.g. 3 year) vision. I encourage my clients to craft in writing a shared long-term vision(what you ideally want your company to ultimately be in the distant future) that probably never changes, but also a sharedmedium-term vision (e.g. where you want to be 3 years from now on the road to the long-term vision) that is revised annually as part of the business development process. It’s the medium-term vision that becomes the driving and guiding force. Just having it in place does wonders for company morale in tough times. Make sure it’s exciting and motivating while not being unrealistic. Not to go biblical on you, but remember Moses and his promise of “a land flowing with milk and honey”? That probably started out as a 3 year vision but ended up working reasonably well for 40 miserable years in the desert.

4.      Determine what business model changes/improvements (“strategies”) will close the gap. When you have an exciting picture of what things could be like in a few years, it’s surprising how easy and fun it is for you and your key staff members to come up with possible changes to your processes, product line, distribution channels, target consumers, etc. that will get you there. This is a creative process that lends itself to brainstorming followed by whittling the list down to the best options. 

5.       Implement the strategies. This is the toughest part. It’s like the difference between designing a new product and actually getting it to market successfully. Too many companies are very good at steps 1-4 and then fall flat on implementation because they don’t have a good process in place to create action plans, monitor progress, deal with the inevitable “real world” setbacks, and hold people accountable for results. Keep everyone’s eyes on the vision and make strategy implementation a company priority.

Remember, when you find yourself reaching for the Tums, you have a choice. You can take a woe is me attitude and beat yourself up or you can use your angst as fuel for your continuous improvement engine. And, don’t give in to the temptation to fix each problem that comes along in isolation or simply put out fires without fixing root causes. I can assure you you’ll be far better off taking a holistic approach like the one outlined above. 

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Getting Parents to Buy Your Products

Posted By Ron Sidman, Monday, October 31, 2011
Updated: Tuesday, July 21, 2015

One of the most common challenges for my JPMA CEO Mentor Program clients is how to market their product(s) to consumers. How much should they spend to stimulate consumer demand? Should they advertise? What’s the role of PR? How effective is social media marketing? And, of course, this is all complicated by the fact that no company, small or large, has extra piles of money lying around waiting for a place to be spent.

As anyone who has read my previous writings or worked with me will recognize, I recommend that CEO’s adopt the mindset of having a business model that is a perpetual “work in progress” that you are continuously improving. Marketing should be looked at as one cog in the business model wheel. Based on my own experience and what I observe in the marketplace today, here’s a sequence of questions that could lead you down the right marketing path for your company. And, as you will see, I don’t necessarily think that conventional advertising and PR need to be a priority for most JP companies. Let’s start with the basics.

1.      Do your products really, truly have a competitive advantage at the price you are charging? No amount of marketing is going to make a weak product successful. If your products aren’t up to snuff, fix that first before wasting resources on building demand. In today’s world of easy access to product quality and price comparison information, you can’t fake it. And, be honest with yourself. It’s very easy to fall in love with your own creations even when competitive products are objectively superior.

 

2.      How and where do your consumer customers make their buying decision? Whether the product is a self-purchase or a registry/gift item, it’s probably accurate to say that the mom is the decision-maker. But, how does she make her decision regarding your product(s)? If you don’t have a handle on this (and aren’t periodically checking to see if things are changed), you’ll be possibly wasting a lot of marketing dollars.

For some categories like nursing, car seats, or monitors, moms often most trust recommendations from friends with babies or reviews from resources like Baby Bargains or Amazon.com. For cribs and other furniture, in-store personnel might be a big influence. For products like rattles and teethers, the purchase decision may well be made by moms without much outside input and not until standing in front of the display. Whatever your consumer’s buying process is, it should determine where you concentrate your communication efforts.

 

3.      How much of your resources can you afford to spend on marketing? I don’t believe in marketing on faith. Every company ultimately has to live within its means. And every dollar you spend needs to provide a return on the investment. So, when it comes to establishing a marketing budget, you need to look at the cost and benefit sides together. The questions are, (a) specifically what measurable things are you trying to accomplish in what time frame, (b) how much will it cost, and (c) does that make financial sense? Beware of marketing agencies that say, tell me how much you want to spend and we’ll spend it. Instead, they should be asking what outcomes you are looking for, telling you how much it will cost to achieve those outcomes, and holding themselves accountable for achieving them.

 

4.      What’s the most cost-effective marketing process for you? Once you’ve made sure your products are in fact superior to a sufficient segment of the market, you understand how consumers decide whether or not to buy your stuff, and you know what marketing needles you are trying to move and how much you can afford to spend to move them, you’re ready to design (or redesign) the marketing process portion of your business model. Given the importance of word-of-mouth in the juvenile marketplace, one of the first and most cost-effective opportunities you might want to look at is leveraging your existing consumer customers—as few or as many of them as you may have. They could easily become your “consumer sales force”.

One of the best marketing programs we ever created at The First Years was what we called the “Parents’ Council”. It started in the early 70’s as just a periodic gathering of moms who used our products and lived near our headquarters. Eventually it expanded via the internet to include many thousands of parents (mostly moms) nationwide. To this day, I run into people who tell me they were proud members of the Council and really appreciated the way we interacted with members. If I were doing it all again, I would be even more aggressive in trying to get everyone who bought one of our products to join the Council and even more diligent about making sure every member became a raving fan and enthusiastic spokesperson for our brand.

The way you can fuel the word-of mouth engine is first by having great products, but then by establishing ongoing positive relationships with the people who buy and like your products. If you’re nice to them, they’ll have positive things to say about your brand and the ball will start rolling. You can sign up people via inserts in packages, on your web site, or via social media. Once they’re on board, maintain an ongoing mutually beneficial dialogue. Help them with their issues, provide member benefits and purchase incentives, provide member-only information, ask their opinions, get reactions to new designs, make them realize you care. And, if you sell multiple infant/toddler products as we did, you can bring your other products to your customers’ attention on an age-appropriate timed-release basis. Finally, (see question #3) you can track effectiveness by seeing how many new members of your “club” were influenced to buy your products by existing or past club members.

Hopefully, this gives you some new things to think about when it comes to spreading the word. Don’t be afraid to try new marketing approaches compatible with the rest of your business model and institutionalize what works.  

 

 

Disclaimer: No warranties, express or implied, are contained herein. Purchasers, or users, of this information acknowledge that any errors or omission in the performance of the material contained herein or, any injuries resulting from its use, are the sole responsibility of the purchaser or user, and not JPMA or the author. Opinions expressed are those of the author only.

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Getting the Most Out of ABC

Posted By Ron Sidman, Saturday, September 10, 2011
Updated: Tuesday, July 21, 2015

Many juvenile product companies have at times questioned the value of the annual trade show. However, as long as retail customers are willing to make the trek, there are some highly beneficial things that can be accomplished at an industry-wide exposition, even beyond what you might expect.

To take full advantage and make the best use of your time there, you need to go in well-prepared and with the right mindset. Here are some things you can do in Louisville to maximize the return on your trade show investment:

·         Make sure you are presenting an ideal corporate image.In this era of virtual companies, on the show floor you can still look like a major force in the industry even if your headquarters is a desk in your living room. Of course, it’s important that you have crystallized in advance your compelling corporate competitive advantage—what I called a “superiority theme” in my previous post. Everything your company shows, does, and says at the show should reinforce this. While it may be too late to change the design of your booth for this year, at least make sure you have reminded your staff of the core message(s) you want to emphasize. 
 

·         Think of the show as part of your ongoing industry market research. While your number one priority at the show is always presenting your product line to customers, a close second should be proactively gathering information about your current and future competition as well as industry trends. In a previous post, The CEO as “Chief Reality Officer”, I talked about the responsibility CEOs have for being aware of what’s really going on inside and outside their company. I’m not suggesting you use a periscope to peer over the walls of competitive booths. There’s a lot to be learned by just walking the show, attending show events, and of course networking. Make sure you allocate enough time for these activities.
  

·         Observe how effective your sales force and reps are with customers. During the course of the show, you will have a golden opportunity to observe just how well your sales people know the key customers and how well they deliver the message. This is something that otherwise would take you hours of sitting in airports and flying around the country to accomplish. And, don’t feel uncomfortable about listening in. Remember, like a coach on the sidelines, your job is to be aware of the quality of your team’s performance and to make sure that appropriate training or remedial action takes place.

·         Take advantage of the opportunity to meet senior level managers at retail accounts. Under normal circumstances, it’s difficult just to get a few moments with the buyer in his or her office. At The ABC Show, you will have the opportunity to get exposure to senior level retail managers as well and in an atmosphere where you can position your company and products in the best possible light.  Making contacts at the show can also pave the way for follow up communication without appearing like you are going over the buyer’s head.

·         Get early trade reactions to products in development. In addition to promoting your existing and new products, don’t miss the opportunity to get early trade input on products you have in development. All you really need is a sketch or a model. There’s a confidentiality tradeoff here so be careful who you show things to. But, you can avoid some serious mistakes and improve the ultimate rate of sale by factoring in retail buyer perspective on design, packaging, and pricing at an early stage. It may also be a way to learn if there’s a competitive product out there you need to know about. You should be able to tell by a buyer’s reaction whether or not your concept is unique and appealing.

Best of luck at this year’s show. Hope to see you there!

 

Disclaimer: No warranties, express or implied, are contained herein. Purchasers, or users, of this information acknowledge that any errors or omission in the performance of the material contained herein or, any injuries resulting from its use, are the sole responsibility of the purchaser or user, and not JPMA or the author. Opinions expressed are those of the author only.

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Creating a Steady Stream of Great New Product Ideas

Posted By Ron Sidman, Monday, August 22, 2011
Updated: Tuesday, July 21, 2015

The lifeblood of many successful juvenile product companies is the regular introduction of innovative new products. Products have life cycles. At some point, whether because of new competitive entries or changing consumer tastes, sales of running items will start to tail off. So, if you want your sales to keep growing, and you’ve reached full distribution of your current line, you probably need to keep introducing new products to replace the tired old ones. Also, as I mentioned in an earlier post, it’s always safer to have a “diversified portfolio” of products rather than banking on just a few. Imagine then how much more successful your company could be if you could consistently generate a steady stream of great new product ideas year after year.

Many juvenile companies, even some larger players, rely heavily on submissions from outside sources or getting the US distribution rights for products found overseas. These are workable tactics and you certainly can be successful with those approaches. But, what if you didn’t have to depend on outsiders for great ideas? What if you could eliminate expensive royalties and limiting distribution contracts?

New product development is very much a numbers game. The more good ideas you can pour into the wide front end of the product development funnel, the more successful new product introductions will come out the other end. For consistency of quality and quantity year after year, you need a proactive idea generation process that keeps that funnel full of promising concepts. Here are some activities that could be part of your process to control your own new product destiny: 

·         Start with an understanding of your “corporate competitive advantage”. Before doing anything else, make sure you have a unique “superiority theme” that will run through all your products. For example, it might be exceptional durability, contemporary design excellence, superior facilitation of child development, state of the art technology, extended use for older ages, unparalleled convenience, or some other attribute that you can broadly apply. Having and consistently utilizing such a theme will both help you generate new ideas and help ensure their success in the marketplace.

·         Look for interesting products in the juvenile marketplace that would be even better if you put your stamp on them. This is one of the easiest and surest ways to generate new product ideas. If you have a sufficiently strong “superiority theme” (aka brand identity) of your own, you can succeed just by applying your secret sauce to a concept that already has shown traction with consumers. If you’re the “design aesthetics excellence” company, you could successfully compete by doing knock-em dead design versions of existing products. I’m not talking about “knock-offs”. That’s typically not a viable strategy. I’m talking about leveraging your unique brand strengths to create a product that is far more appealing to your target market than what the competition is offering. The reality is that often the company that first introduces a product concept is not the one that ultimately has the most success with it. What would be your brand’s version of that product is the actionable question.    

·         Immerse yourself in the consumers’ world and find ways to make their lives better. Every juvenile product company is in business for one purpose—to make the lives of new parents and their children better in some way. Parents perform multiple “processes” in their roles as caretakers—nurturing, feeding, bathing, grooming, educating, transporting, and so on. What if you approached new product idea generation as an exercise in parenting process improvement? What if you or your staff routinely observed how parents are performing these processes now and routinely looked for ways that they could do it with less stress, with more enjoyment, in less time, for less cost? Again, make sure you always look at things through your “superiority theme” lens. You’re bound to find ideas you can add to your list.

·         Proactively scan other marketplaces for new concepts that have juvenile product applications. One day a number of years ago, my wife came home from the supermarket with a new product for storing leftovers called GladWare. As you will recall, this Tupperware-like product was appealing because of its low cost and “semi-disposability”. Since my company was in the business of making cups, bowls, dishes, and utensils for toddlers, it occurred to me that there might be an application for this thin-wall injection molding technology in juvenile products. The Take and Toss line of products we developed quickly became by far our highest volume product group and is still highly successful today. Of course, it’s not necessary or desirable for you to wait for your wife, husband, or partner to bring home the stimulus for your next great creation. You and your staff could make a practice of doing periodic scans of new ideas and technologies in other fields. 

If developing successful new products year after year is important to you, you need to decide which techniques your company can best use to “mine for gold” and then apply them on a consistent basis. At The First Years, our marketing and design folks collaborated on idea generation using techniques like these as a part of their overall responsibilities. But, everyone in the company was encouraged to submit new product ideas and was recognized for it when they did. In future posts, I’ll be talking about how you can screen and enhance these ideas as they move through the product development process.   

 

Disclaimer: No warranties, express or implied, are contained herein. Purchasers, or users, of this information acknowledge that any errors or omission in the performance of the material contained herein or, any injuries resulting from its use, are the sole responsibility of the purchaser or user, and not JPMA or the author. Opinions expressed are those of the author only.

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