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The Road to Become a Target Vendor
Mike Eaton of Hero Clean, Inc. has branded his product line with the tag line Cleaning Products Made for Men. Starting in August 2015 Hero Clean’s product line was on the endcaps of 16 Target stores in California and soon he will be going into select stores on Long Island. Eaton took three and a half years to go from conceiving his idea to getting onto Target shelves, and the journey was more complicated than he expected but there a lessons to be learned in the story that I believe will benefit every inventor.
Eaton’s story started out when he would open laundry detergents to see just what detergents had the least offensive odors. He couldn’t take the heavy fragrances of many of the brands, and the cover-up fragrance idea really wasn’t what he was looking for. Eaton came to the inspiration that every cleaning in the store was made for women, fragrances were added for women, and that there weren’t products geared for men. A little checking on the Internet and Eaton found some pretty powerful statistics, 47% of US adult men (18 and over) are single. The average age of a male getting married today is 29, and still 47 % of first marriages fail and 42 % of second marriages fail. The result is that 42-43% of purchases made by men. Eaton figures that 70 to 100 million men are buying cleaning products.
Eaton study men habits and needs for cleaning products. One aspect was to look into cleaning products that better fit men’s sweat pH and bacteria that are more associated with men than women. The other aspect was the number and type of cleaning products men prefer. He found men like easy to use products, and all-purpose products that can do many tasks. From his evaluations, Eaton determined he needed different
Lesson 1. Have a clearly define target market that comes complete with an interesting story.
Defining the Product
Eaton study men habits and needs for cleaning products. One aspect was to look into cleaning products that better fit men’s sweat pH and bacteria that are more associated with men than women. Men also need stronger surfactants (the chemical group that gets out stains and perspiration in clothing, and loosens food from dishes) and longer lasting much milder smelling fragrances (to deal with lingering bacteria odor without an overpowering scent). The other aspect Eaton considered was the number and type of cleaning products men prefer. He found men like easy to use products, and all-purpose products that can do many tasks. From his evaluations, Eaton determined men needed four different products:
All-purpose spray cleaner
Lesson 2. Understand your target customer needs
Creating the Product
Eaton identified a great market but the question is how to develop the product. The answer for Eaton was not to try and do everything himself, but rather to turn first to the suppliers, in case the ingredients industry
Manufacturers in the ingredients industry are always working to trying to get more business. They do this by developing new formulations, including their products of course, that address some of the market issues their customers face. Eaton was able to get ingredients companies to supply him with new formulations that he was able to evaluate. Since Eaton is a marketing person, specializing in brand building, he wasn’t comfortable dealing with all the technical aspects of the proposed brand so he hired a chemist familiar with the cleaning industry to help in the final formulation.
Many of the major ingredient customers weren’t willing to help out as they didn’t see Eaton as major customer. Eaton had to find smaller companies. Trade shows were a tool Eaton use to find those smaller companies. The show he attended that were most helpful were International Cleaning Experts EXPO, https://iceexpo.org and the ACI (American Cleaning Institute) show, www.cleaninginstitute.org/about/aci_convention.aspx where ingredients companies exhibited.
Lesson 3. Take advantage of the supply network for product design, concentrate on smaller companies who are more likely to help a new inventor-led company.
Eaton’s used a rather large network of single friends to do performance testing. He gave them samples and told them to go to town on seeing if the product worked. These tests went well. This was not unexpected though as Eaton’s earlier work with ingredients manufacturers allowed him to use formulations where there was a substantial body of data indicating the formulations would be effective.
Eaton’s products used different formulation and the cleaning chemicals can react in unexpected ways over time. Eaton needed to tests the shelf life of the product to ensure he had a long shelf life. Big retailers like Target also require cleaning vendors to be Wercs Smart Vendor https://secure.supplierwercs.com/ which is an organization that helps retailer participants select quality products with chemical formulations. Eaton wasn’t really in a position to do this testing on his own. Instead he used testing capabilities as one of is criteria in selecting a contract manufacturer. Rather than doing the testing on his own, the contract manufacturer did most of the testing. This testing revealed that Eaton’s laundry soap had some issues which caused the product to be reformulated which caused about a one year delay in the market.
Lesson 4. Don’t try to do technical steps on your own. Use vendor support.
Financing the Development Phase
Eaton’s path seemed fairly straightforward. But there was a catch –money. To the ingredient supplies and the contract manufacturers Eaton’s venture was a long shot. And even if he was successful, it might take him two years or more to introduce his product. In fact it took Eaton three and half years to land on Target’s shelves. So suppliers weren’t willing to fund Eaton’s efforts, and he had to pay for everything. Sometimes felt that the suppliers were trying to make all their money off of him in the development phase. The result was that Eaton had to invest to get through this development phase.
Inventors do have options with companies which Eaton didn’t pursue. They could offer royalties to the suppliers to cover expenses, or offer a share of the company to the suppliers in return for their financial support. These tactics work only if an inventor can make a strong case that their product could succeed. In Eaton’s case, he was pioneering a new product category and that is an inventor’s hardest sell. Vendors and possible investors tend to be conservative and supporting a new product category is a risky venture.
Lesson 5. Expect companies to charge you for their support.
Eaton is a marketing professional who had branded his product into concept, Hero Clean, Cleaning Products Made for Men. He knew that he did not want to just go into and talk to buyers. He had a concept for a market and he wanted to go to an executive who was involved in merchandising cleaning products. In a retail organization merchandising managers are responsible for the entire selection of products available, and or how those products are grouped together, or differentiate to appeal to customers. This is a much function than buyers who are selecting existing product lines and working with vendors of issues such as packaging, price and quality.
Eaton had done a lot of work with sponsorship of events before starting Hero Clean and one of his contacts knew a sponsorship at Target. That Target contact gave Eaton the name of the Director of Merchandising for Cleaning Products at Target. Eaton talked to him on the phone and the response was immediate and positive. It turns out that Target studies had shown that there were a tremendous number of men walking through their store alone or with other men. Target wanted to do things to entice these men to buy more products. Hero Clean and Target it turned out was match. Definitely a concept that Target wanted to try out. Phase one of the sale was made.
Lesson 6. A big message is what gets in front of someone who can push your product through.
Sales Details Take Time and Effort
Target of course like all big retailers is conservative about what products they put in their stores. They worry about quality, the vendor’s ability to deliver and support returns, and just how well the product is received. Target’s starting point is on-line sales. But to even do that the starting point is the vendor site on Target.com. Vendor’s need to post a tremendous amount of information before getting started regarding specifications, packaging requirements, and details on steps vendors need to take to receive approval for product changes. This information is not shared with customers, but is required before you go on line. The site also requires a vendor to agree to Target policies such as payment terms and returns. This process took several months. Target, as well as all other big retailers, will return products to you for the smallest deviation in a product or package from the agreed upon specifications.
Lesson 7. You need all you details lined up with the retailers requirements before you’ll make sale one.
The first test was Target.com where the Hero Clean line did well. But Target.com was also the testing ground for invoicing, Target and most other retailers have EDI requirements. EDI is electronic data exchange where retailers send orders to vendors and receive invoices back. Retailers also use EDI for other communication. www.edibasics.com/edi-by-industry/the-retail-industry. EDI is tough for an inventor to do on their own, but there are many EDI contract services you can use. Selling on Target.com allows Target to run orders through you, receive invoices and generally ensure that a company is ready to sell to Target stores.
Putting Hero Clean on the endcaps of 16 Target stores in Southern California in August 2015 was step two in market testing. Now in the summer of 2016 Target is expanding the test to additional stores in Long Island.
Lesson 8. Expect major retailers to test new concepts carefully before making a major commitment.
Expanding Sales to New Retailers
Eaton reports that other retailers including Fleet and Farm type retailers, as well as Lowes, Home Depot and Wegman are talking to him now based on his success at Target. He hopes to launch sales and some of these stores by the end of 2016.
Lesson 9. Success leads to additional success. Momentum counts.
Inventor Focus Groups
Eaton sent his product out to friends for a performance evaluation. He also had feedback from friends that he had a good idea. But what can you if you want a more thorough evaluation. “How do I evaluate my product” is probably most common question inventors email me.
This task is more difficult as Inventors don’t usually have big ad and promotion budgets so they need to have their products succeed either because they have unique and highly desired features, or they have better perceived value. I have found inventors can easily discover how their product relates to other products with some simple focus group testing among friends or acquaintances. No inventor should overlook this step as it could cost them a lot of money if it their product is considered too expensive for what it does.
Steps to Running an Informal Focus Group
Friends and acquaintances are OK as long as they are potential users of the product. You can have anywhere from three to 10 people.
Have people sign a non-disclosure form, it shows you are protecting your idea. You can go to the web site http://www.biztree.com/non-disclosure-agreement?ppc=1&gclid=CPaJ-8iPl7MCFYpFMgodk3UABA for a variety of non-disclosure forms you can choose from. (Cama – you may have a non-disclosure form on your web site. If you do, substitute your web site for this one.)
Select five to eight products for people to evaluate. You don’t need products that accomplish the same goal, but do include products just from the same industry. If you have a kitchen product, you should have some kitchen products that do other jobs. All the products should be in a price range of 50% to 150% of what you feel is your targeted retail price. For example if you are targeting a price of $10.00, try to have products that vary from $5.00 to $15.00 in value.
Decide how you want to present your product–a “looks like works like” prototype is best, but other options include drawings, rough prototypes or sales flyers. If you have a sales flyer, either obtain flyers for the other products or print out one of their web pages.
Have people first rate all the products by how likely they are to buy the product. You want to see that your product is at least in the top 50% of how likely people are to buy a product. After the vote, ask people why they gave the products the rankings they did. Often people’s comments will give you a better understanding of how people view this category of products, which will help you in your product’s final design and also in your future marketing efforts.
Next have people rank the products by value, with the product they feel is highest value first, and the lowest value last. This helps you determine how consumers value your product. Since you will know the price of the product just above your product and just below, you get an idea of what price your product should have. Again ask participants why they ranked the products as they did to get a better idea of how consumers think.
Most inventors are disappointed if their product isn’t the hands down rankings winner both in value and desirability. But it is not necessary to be first, only in the top half. Remember you are competing with products that already have had market success, and in many cases, products your focus group members were already aware of. A successful product doesn’t need to be better than every other product on the market, just some of them. However, that doesn’t mean you should ignore comments or rankings by participants that are negative towards your product. Instead look at those comments as an opportunity to improve your product so it can be a true market winner.
Don Debelak is the founder of One Stop Invention Shop (www.onestopinventionshop.net) which offers marketing assistance and patents to inventors. Debelak is also the author of several well-known marketing books including Entrepreneur Magazines’ Bringing Your Product to Market. Dondebelak34@msn.com, 612-414-4118
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