Part II: Lessons from Food Businesses – Marketing, Branding, R&D, and Product Launch

In “Part I: Lessons from Food Businesses,” I made the following statement,

“Food entrepreneurs may often find themselves frustrated that crappier products on the market do better than their high quality product.”

I want to dive deeper into this. I have been frustrated with this concept but accept that what tastes good to one person, may taste awful to another. Food is very much a subjective thing — something based on personal preferences, tastes, opinions, and feelings. The consumers that purchase “crappier products,” or products that i.m.o. are low quality: sugar-based, artificial flavors, colors, and additives offering very little nutritional value, still seem to stand ground in the marketplace. But why is this so?

Look at all the big named brands (BNBs – for simplicity sake). The well-established, nationally recognized brands. These companies have presence in multiple aisles, for a variety of products. The American consumer has grown up with these BNBs. And the flavors and textures have dominated their palette for a long time, making a mark in their memories. The BNBs have effectively capitalized on the happy sensation that comes with familiarity and childhood nostalgia.

My dad’s side of the family grew up extremely poor. There were days when all they had was a piece of white bread and milk, even lucky if they had a boiled hot dog with that. There were some days where they didn’t eat at all. To this day, my dad’s side of the family LOVES eating white bread and hot dogs. Not the most nutritious, yes I know. But because they grew up on it, it holds a special place in their memories. It doesn’t matter that the food isn’t nutritious, it was what they ate to survive — and there must be some comfort in eating things over and over again with the connection to survival.

But I digress a bit. My point is that there are non-nutritious, not very good tasting food products in the marketplace that end up doing well and dominating the marketplace. I believe that part of this has to do with the psychology that I mentioned above, price point, how well-established the brand is, as well as how a consumer is conditioned to make it a part of their initial purchase and then incorporate it into their lifestyle.

It all starts with a company’s marketing and branding. How does a person first notice a new product on the shelves? Effective marketing, branding and appropriate placement.

Marketing and Branding

  • Do I recognize the brand and logo? Do I feel like I can trust the brand?
  • Does the product packaging, graphics, and labeling stand out from competition (shelf presence)?
  • Does it catch my eye when I walk by (is it bold and striking)?
  • Does it fit in the section that it’s placed in (proper placement)?
  • Does it fit with my lifestyle and price that I’m willing to pay?

People will likely go through an evaluation similar to the questions above, whether being fully aware that they’re doing it or not. They somehow come to a conclusion of whether they’re going to make a purchase, maybe consider it for another time, or not at all. Either way, first impressions make a difference and it’s up to the company to target their product well for their specific demographic and clientele.

One can hire a branding agency to help design, refresh or provide feedback, but it costs thousands of dollars. And that’s not even guaranteeing that the information they provide will be all that helpful or different from what you already know (on a side note: I worked with a business who had hired one and we were both quite disappointed with the deliverables. Also, there seemed to be no factual evidence of why their recommended schemes would work or be successful. It was all a matter of their opinion!). In any case, you won’t know whether the information they provide will be helpful or not until you try, right? 😛

Research and Development

Before rolling out a new product into stores, it is critical that the entrepreneur conduct their own due diligence. With a limited budget, it may not be feasible to hire an agency or consultant. The entrepreneur can however, better prepare themselves for the marketplace by conducting their own market research — and from that, extrapolate useful information. Below are a few questions when conducting market research for developing or refreshing a product:

  1. Who is your ideal customer? Consider demographics, psychographics, and any narratives that your ideal customer tells themselves when they want to purchase your product. What does that sound like? Also consider alternative ways this ideal customer may conduct their purchases through — i.e. online, Amazon, subscription boxes, events, etc. Write down notes for all other distribution channels.
  2. Visit the stores that you envision your customer shopping in. What stores are they and why would your ideal customer shop at those?
  3. Where is the ideal location that your product would be placed in (besides end-caps)? A product can’t live at an end-cap forever since these sections get refreshed from time to time. Where would this product sit more long term?
  4. What are the price points of the competition? High, low, middle prices? Write them all down.
  5. Does the marketplace appear to be oversaturated with similar products? This is one of those questions that you do not want to have a revelation about after you’ve launched a product. Take a good, hard look and be honest with what is out there, not what you are hopeful about or think you see. Write down all the competitors products so you have substantive data that can help temper your idealism with realism. For instance, bars is an oversaturated market — granola bars, fruit bars, protein bars. If you get into this industry, you better have a unique product that can stand up against all the other bars. Remember, you don’t want to discover that your product exists in an oversaturated market in your product launch phase. And it should not be an excuse for when your product fails since this is known. Sadly, this does happen due to lack of research and planning. If you continue on even knowing the market is oversaturated, you had better have some tricks up your sleeves for going into the specific market with a disadvantage!
  6. What graphics, labels, text, storytelling, and packaging is the competition using? Which one stands out the most?
  7. What do you think the competitors do well (in regards to #4 above)? What do they not do well?

Utilize the information you’ve gathered to determine what your narrative, graphics, labels, text, and packaging will be. Learn from others already launched in the marketplace. Will yours stand up to your competition? If not, revamp. I won’t go deep into the costing and pricing that would be part of this phase, since that can be a whole topic on its own, but you want to make sure that you can turn a profit while still maintaining a competitive price point that allows for your distribution channels to make their margins as well. Oh, and of course, the customer has to be willing to pay the price that you’ve set. Part of this can be determined by your competitors pricing, but you should not solely just use your competitor’s pricing to price your own product. You have to determine your own cost of goods and figure out what margins are acceptable at each level. So many businesses utilize their competitor pricing and it is a shame! Every business is operating with different expenses and margins. The business owner could very well be cheating themselves of additional profit. Okay, enough ranting on that — will save for another post! 😛

Product Launch

When you finally roll out your product, make sure you have adequate staff to support your launch. It is critical to the success of the product to be demo’ed and in the hands of your ideal customer for awhile before gaining any real traction. Without proper support, visibility, and awareness that your product exists, it will likely get lost in the thousands of new products launching. It can be quite disheartening to spend thousands of dollars to launch a product and have to pull the plug on it because “it” wasn’t doing well. But was it really the product’s fault? Could the demise have been prevented? Could the product have been better supported? What did your outreach plan look like? Was it versatile and included a plan for different distribution channels?

Conclusion: Entrepreneurs need to recognize that without proper market research and development and adequate support lined up for each of their distribution channels, they are going into the marketplace completely blind and wasting precious cash flow in the process. There is valuable data in the current marketplace to indicate what works and what doesn’t work (unless you’re launching a product never before seen!). When refining a product’s packaging, labeling, narrative, and graphics, one should do so based on data as well as how it fits with the company’s branding. The product and all that it is made up of, should align and be consistent with the brand and how it is perceived by customers. This leads me to: “hub and spoke” products, a topic for next time!


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