CHAPTER

It’s not just your product that has to get out of the kitchen and into the stores. It’s you.

As you think about your new product, let’s look at the case of Michael, whose product, Michael’s Perfect Pickles, we’ll come back to throughout this book. He sits at his kitchen table staring at a bottle of his pickles. Michael’s Perfect Pickles. They are fine pickles. His family likes them, his friends like them, and he received some great compliments about them at a local flea market. But how can he find a real market for them? What does it take, he wonders, to get them on the supermarket shelf? Why shouldn’t someone buy his pickles instead of someone else’s?

The trouble is, Michael shops for groceries just like everyone else, but he has never actually seen the pickle aisle for what it is, a bewildering mixture of competing products. So before he can get his pickles on a supermarket shelf, he has to become an expert on that shelf. And that’s what you have to do—become an expert on your product’s shelf.

So how do you become an expert? Simple. Start with research, and the best research is hands-on. Go to a grocery store and purchase one or two successful items in your product category and figure out what makes them pop. Look at your competition. Snap a quick photo of the shelf and category you wish to be in. Find the average price point at desired retailers. And engage store personnel, who will be flattered to be asked for their opinions. Here are some questions you might ask:

What products sell the most?

Why do you think that is happening?

What categories are most popular?

What items do customers say they would never buy?

What about traffic patterns? What days are heaviest? (The answers will help you determine the best times for demos.)

Once you know what the aisle is like and once you’ve started to think like a manufacturer instead of a consumer, you can begin to figure out how your product will fit in—or if it won’t. There’s no shame in admitting that. After all, the worst mistake you can make is trying to sell a product that clearly no one wants. Don’t listen to your ego. Listen to the cash register.

SHELF CHECK 1

Know Thy Market

Observe your market carefully and ask yourself these seven questions:

1. Who’s my target market?

2. How innovative does my product need to be?

3. What sets my product apart from the competition’s?

4. Does my product have a look that is similar to the competition’s?

5. What’s the best price point for my category?

6. Is my category growing or shrinking?

7. Is my product in demand?

Who’s My Target Market?

Store customers, buyers, distributors, retailers—they all want to know who your target market is, and they want you to be specific. Claiming that your product is for everyone will not work.

For example, if you are launching a natural antacid medicine, don’t say it’s for people ages eighteen to sixty-five. Most people with antacid problems are over thirty years old. This does not mean younger people won’t need it too, but the thirty-plus category is your target. Let your marketing strategy follow suit.

How Innovative Does My Product Need to Be?

Simply replicating a competitor’s product will not pay off because the market wants innovation and new products.

For example, I worked from just about day one with a natural soda company I’ll call Z. Its mission was to launch a healthy soda without all the chemicals. At the start, the juggernaut competitor was obvious: Diet Coke. Now, this may seem like impossible competition. But it is not if you ask the correct question. Why was Diet Coke so popular? People wanted a Coca-Cola taste without calories or weight gain. Easy sell! Z capitalized on that market gap. It promoted stevia, the sweetener, so it could say that Z had no phosphoric acid or artificial ingredients. Z’s pitch? A healthy soda without calories or artificial sweeteners. Z dominated the category because the company pioneered its category.

What Sets My Product Apart from the Competition’s?

What sets your product apart? Perhaps it’s the taste, quality, ingredients, environmental impact, or safety. Your sales angle should be defined by the most significant difference your product has. For example, one of my favorites is the only nontoxic cleaner on the market. Not only does it clean better than the alternatives on the stores’ shelves, but if by chance your toddler finds it and drinks it down, it’s 100 percent safe! Now, that’s an angle everyone can appreciate. Thirty years ago, this product would have been science fiction. What a game changer! What about your product changes the game on its shelf?

It is very important to remind yourself that your competition has already spent millions to get to where they are today. If you think you can launch a product as successful as Gatorade or Red Bull, by all means go for it. But to outspend these giants out of the gate while still an unproven brand will be risky. Battles can be short, but wars are notoriously long. To slay giants, your brand must raise the bar and differentiate itself.

Again, don’t listen to your ego. I have worked with companies whose owners assumed their products were innovative. These were not realistic assumptions based on market research but unquestioned assumptions that led to amateurish packaging, less-flavorful products, and higher price points, all of which then resulted in a lack of sales. Once I suggested to a company that we rethink the launch of a new product because I thought we would be swallowed up by our competitors. The manufacturer’s ego demanded otherwise, and a million dollars later the product moved from the shelves to the half-off bin and, from there, into obscurity.

Does My Product Have a Look That Is Similar to the Competition’s?

This can and does happen. Inside supermarkets, when two products look similar, one must go because obtaining merchandise variety is important to retailers, except perhaps in a hyperspecialty store focusing on few categories.

I worked with a manufacturer whose packaging looked similar to its direct competition’s, even down to the color scheme. The manufacturer did not imitate the competition—it was just unaware of them entirely. When its product eventually made it onto the shelf, even buyers and retailers thought they were the same brand. Worse, both products were placed together to reinforce the competitor’s brand. I believe to this day that my manufacturer had a superior product. But the competitor had a larger stake in the market and a loyal following and methodically drove out its similarly packaged competitor.

What’s the Best Price Point for My Category?

To answer this question you must first find your competitors’ price points. You must humbly look at the competing products and their prices and ask if your price point should be the same or lower. This is another place where ego and good research can collide. Cash flow is a fundamental of finance and must be a singular priority. That may sound elementary, but if your cash dries up because of a poor pricing decision, you are in trouble. The majority of consumers compare pricing among brands, myself included. Aggressive price points can be instant sales killers. If you are going to charge a higher price there has to be a very clear reason or nobody will buy.

Products slightly cheaper than the next can instinctively draw a consumer’s attention, whereas something overpriced will turn people off. An example would be a dish soap priced a dollar more than the competitive products. It is not a decadent piece of rare chocolate; it is a product for cleaning spoons. Therefore, the consumer’s tolerance for a higher price point is not as strong as for other, more-coveted items.

Having decided on your basic price you may find that you are not finished with pricing. Discounted sales provide another stream of revenue in the evolving grocery world. I have been observing the 99 Cents Only Stores and can see that discounting prices is a useful tactic. Unlike yesteryear when off brands sold cheaply, it’s now top organic and mainstream brand products that can be discounted. If your production and operation costs are low from the start, that opens the doors to more pricing opportunities. If the day comes when your top specialty product is in overstock, then selling to the 99 Cents Only Stores and overstock sites will be a feasible alternative. When this happens, because of your low costs, you will close the deal with a profit. Do not think this will weaken your brand because the big organic brands are in the 99 Cents Only Stores to stay.

Is My Category Growing or Shrinking?

Shelf space allocation is regularly manipulated by retailers to increase sales and profits, in part because of trends in the market. So you have to know whether your category is growing or shrinking.

For example, the energy shot market boomed in recent years, naturally attracting competitors by the droves. Now some buyers I’ve spoken to believe this market may be shrinking, with the potential for enormous market casualties. Yes, one could argue that a breakout product could reactivate the category, but perhaps people are less willing to buy a 2.5-ounce shot for $3 to $4. Perhaps the current economy is dictating fewer impulse items and more staple items. When unemployment is high and money is tight, buying 16 ounces of fresh juice for $3 to $4 instead of a tiny shot seems like a better bang for your buck.

The way I see it, there are trends and fads. Trends can last a long time but fads come and go. Shots are a fading fad, and only a few suppliers will survive in the major retailers. Check the 99-cent store and you will see all these shots arriving in droves. Go to Whole Foods Market (WFM) and watch the dust gather on the shots. If you are going to jump on a fad, make sure you are the first in, not the last copycat.

Is My Product in Demand?

Launching a product can be likened to bringing a child into the world. But be careful of the emotional commitment. You must ask if there is a real demand for your product. Retail buyers are already inundated with thousands of new and established products. Is your category saturated with products or is there room for one more? How can you get brand share?

Better yet, can you invent a new category? Can you make your product so innovative that it will be an undeniable hit? For example, the company called Ezekiel came out with sprouted wheat shells and breads. When Ezekiel launched these products they were all the rage because consumers wanted live sprouted bread with low carbs and, most important, healthier bread. Ezekiel came to dominate that space. Ezekiel became one of the top brand shares of the sprouted bread category. It was a paradigm shift.

Recently I visited my favorite WFM in Venice, California, looking for my Ezekiel shells and found none. Nothing caught my eye as similar and, irritated, I drove to Sprouts Farmers Market to buy them. Loyal customers will jump a few hurdles to buy a favorite product. It’s one thing to create a product people will pay money for. It’s another to create one that people will also pay for with time and effort.

So let’s go on to the next step: moving your product from conception to retail ready.