Q: People don’t realize they’re doing it?
Yes. That’s the biggest aspect of the book. People do not realize that they’re doing it. I get approached by a lot of business executives who don’t carry themselves correctly or present themselves the way they think they are. And they don’t understand why people don’t support them. On the flip side, I see a lot of ventures where people get enormous amounts of money and I don’t think they’re as capable as the other people out there but they packaged it correctly when they sold it.
Q: You’ve offered an interesting theory about how companies balance intentional and unintentional marketing in their messages to consumers. What’s the difference?
There are brands that have traditional consumers. They don’t want to detract or scare away their traditional consumers but they want to grow their business and be attractive to another market. Let’s use Timberland as an example. It was built and marketed as the best boot in the world.
Timberland obviously was made for hikers and the like. The same goes for Northface and brands like that. Somebody buying a Timberland from a technical aspect – a mountain climber or a hiker – they’re going to buy one pair of Timberlands every year or maybe every two years. Why? Because it’s the best boot in the world, so you shouldn’t be buying it every week.
But if you want to get to the demographic of the popular culture, the 40 and under, the rap, Latino, etc., these people are the ones who make Nike such a huge company because they buy a pair every two weeks. Once they get it scuffed, they have to get a new one. So they buy from a fashion aspect. You can’t market to them like you would the core group because if you market to them, then what are marketing? The best boot in the world to get a scuff on? So, you have to do an unintentional marketing campaign aimed at them and give the appearance that they came after and sought out your company and grabbed your company.
So you have to market to your initial core – the hikers, etc. – and then you have to do a different type of marketing, such as incentives in the stores and things of that nature, where the public doesn’t think you’re marketing to this demographic that is not yours but that demographic spends ten times more on your product than your core, original market does. So there’s intentional and unintentional marketing, and you need them both.
Q: What about premium prices?
Most of the time, the reason why products have a premium price is because you’re paying for everything else – the advertising and licensing. So we have to roll that into the costs.
Q: How important is it to develop and launch a brand internally before going out to the marketplace?
There’s a little balance necessary. Internally, you have to make sure the pieces are in place. Is the product technically proficient in the area it’s in? Second, you have to set the margin and price on it and know what that magic price point is that makes it acceptable. We all have a magic price point. Then you get the DNA of it – the three words; what’s the message we’re putting out.
Then there’s that moment. If you’re a new company or a big company, there’s that focus group moment where you trickle it out to the consumer to hear about people who are not close to the product. You need to hear from those people that have no knowledge or love or couldn’t care less…you need to know if they’ll take $5 or $500 or $5000 out of their pocket and buy the product.
Because of the age we’re in, with transparency and Twitter and Facebook, you have to put that product out to see how the world gravitates toward it or goes away from it. That’s a fine line you have to walk as an entrepreneur.
