Minimal Viable Product versus Minimal Viable Business Model

During this year I have been working with a small team to build a minimal viable food brand and product for testing. I have written about this journey under the title Project FB. Early results appears pretty good. We learnt lots about the product, the right recipes and flavour combinations. We tried different ingredients and different suppliers. We learnt more about the product than just this, we learnt how to sell it, what support you need, and how it performs in a small retail environment. All of this is very encouraging and very valuable.

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Nov 29

2011

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By Norman

In Marketing Consultant Resources, Personal Development, Project FB

Tags marketing consultant norwich marketing tools

The Importance of Winning at Product Level

Brands are an essential vehicle for getting consumers to love your product and buy into your values, but they become even more valuable if the product is truly best in class too. In the food industry a great test is to say, “if my product was tasted alongside everyone else’s without packaging or branding, would mine still come out as the best one to buy?” If so you are in a strong position, because you can still overlay a great packaging format, a great brand with strong values and recognisable packaging, a competitive price, all to add even more competitive value and differentiation.

To find out just how good your product is, it is perhaps worth considering how the brain senses may evaluate your product. So as an example using food, get your product out on the table alongside all your competitors and ask:-

Does my product look truly more appetizing than anyone else’s?

Does the smell of my product get my taste buds more excited than the smell of any other product?

Do I win on great taste?

Is the texture and feel of my product better than the competition?

If you can answer yes to all of these you have a winning product with the potential to be underpinned with great branding and great marketing!

Looks good, smells good. feels good, tastes good…… probably is pretty good!!

Jul 25

2011

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By Norman

In Marketing Consultant Resources, Personal Development, Project FB

Tags branding brands marketing consultant norwich norwich marketing consultant

Proto-type Research And Testing Versus The Retail Environment

Project FB – Update.

Since my last blog post about Project FB, concerning the “lowest cost viable product” with which to go and test the market, things have been moving in a positive direction. Our testing and proto-typing has led to changes in suppliers, improvements to our packaging, changes to pricing, and finally a set of products we have confidence will work in a retail environment.

But retail is a very different environment to the areas where most product testing takes place. We have done all of our market testing at local markets where you pay to spend a day listening and selling to customers but other routes we could have taken include more traditional market research including focus groups, or perhaps a larger scale test targeting one market segment with a full launch and evaluation. Whilst any method will give you answers it will also give you challenges.

We have recently been working with one retail outlet to see how our product would perform and what we needed to do to get the right rate of sale for the product to earn its place on shelf. Here are some insights for anyone facing similar challenges.

1) Rate of sale is the only measure that really counts. Your product must earn its space on shelf.

2) Having a relationship with the store manager is key. You must make sure everyone realises where the business is on the journey, what you are trying to achieve, and why it is worth it for both parties.

3) Make sure you have the flexibility to move your retail price – it is likely that pricing in the retail environment will need to be lower than it first appears, however do not sacrifice your premium without understanding the rationale behind any move.

4) The hardest thing about retail is that your product is stripped bare. You are not there to promote it, talk about it, and sell it. You much do everything to ensure a) the packaging does that job for you, b) you can maximise any opportunities in store to get your product noticed.

Since working with one retailer we have had to reduce our price point as customers felt the product to be too expensive. Our tests at markets would have suggested a higher price point was sustainable, but I think customers evaluation of goods changes depending on the environment they are in and the kind of shopping they are doing. We adjusted our packaging to simplify the messages and make the flavour names clearer. We added posters in store to get people’s attention.

All this is not enough. We are currently looking to add a sub-set of branded messages to a shelf strip and branded tray that will house our product and give even more impact on shelf.

On a busy shelf, full of products, how does my brand and product get noticed?

Getting a product right in retail is a critical success factor but I think any business regardless of size and financial resource can only maximise the retail opportunity by first understanding what is the right mix of price and promotional mechanics to generate the best rate of sale.

Mar 10

2011

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By Norman

In Books I Like!, Marketing Consultant Resources, Personal Development, The Wider Topic Of Business

Tags business models business strategy marketing consultant norwich

Business Model Generation

I would describe this book as almost like a mini guide to an MBA, or an exercise book for an entrepreneur. The style of the book makes it easy to read and the visual look and feel of it is just great and refreshingly different for a business book dealing with something as technically difficult as business model innovation.

As the title suggests this book is all about business model generation, but what makes it unusual is the way it takes you through the process step by step almost as if a business coach was sitting alongside you.

It also provides some great resources. Marketing and business analysis tools, frameworks for creativity, a really great model to understand how your business and business model could work, further reading references and extracts from other books (most of which are covered within my blog incidentally!) which are all of relevance.

There isn’t too much detail or anything too controversial to write about in a review, but it is still a really useful book to have. It is also very easy to read and very visual which allows the reader to think more about their business rather than just reading the book.

I would recommend this book to anyone grappling with business modelling, but also to consultants who are facilitating workshops for clients. The book is full of tools and frameworks, and also points you to further resources should a particular area be of interest to you.

Oct 13

2010

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By Norman

In Books I Like!, Marketing Consultant Resources, Personal Development

Tags branding marketing consultant norwich Marketing Norwich

The Purple Cow

Another Seth Godin classic! In this book Seth Godin explains that most of the “needs” people have are now met by one or more products which with the rise of retail and the internet are now widely available. The brands that enjoyed the benefits of being first to market coupled with investment in large broad above the line advertising 20 years ago now have a dilemma. They have to continuously invest in that mass advertising just to stay still, yet whilst doing so they cannot grown market share any further.

This means that introducing new products is even harder than ever, but it does not require the mass advertising investment that was required 20 years ago. Instead, marketers must ingrate their marketing strategies and ideas into the very fabric of the products they develop. Furthermore, for the product to have any impact or chance of success the strategy and or execution of strategy must be remarkable. That is to say, it is no longer remarkable to get your milk from a cow….. you need to find a purple cow to make it remarkable and differentiated! For a product to succeed it must be truly remarkable in its packaging, the advertising, the message, etc etc.

If you are able to achieve this Seth Godin explains that then it is possible to generate an immediate interest and engagement with your audience who will share the idea with likeminded people. Seth describes people who he calls “Sneezers”, people who will embrace your product but crucially enthuse about it to other people often through new media applications. This can deliver the momentum needed to build a business.

The essence of The Purple Cow is to transform your whole business from being ordinary to remarkable, and that in a way becomes your overarching marketing strategy. This in many ways ties in nicely with the Values Led approach that is described in Ben and Jerry’s book the Double Dip.

Oct 01

2010

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By Norman

In Books I Like!, Personal Development

Tags marketing consultant norwich Marketing Norwich

The Starbucks Experience

I must admit I found this book rather disappointing from a marketing insights point of view. I was really hoping to get an inside perspective on the story behind the company, what the starting point for the brand was, and how the company dealt with its phenomenal growth in America. Unfortunately, the book is in many ways just a promotion tool for the business, reminding people of the experience they should get when they pop into their local Starbucks!

The best thing I can say about the book is that it does give an insight into how great customer service can really add value and become a competitive advantage within a business or as part of a marketing strategy. With this of course comes the challenge of maintaining both the quality of people and the consistency of message as the company grows in size. The book gives some good tips and approaches to ensure that the core values of a business and/or brand are maintained as it gets bigger and has to deal with issues such as multiple sites.

The Starbucks Experience describes some interesting approaches towards environmental policies and to public relations management. It illustrates how Starbucks has developed policies to try and support appropriate charities in a meaningful way and integrate these into its wider marketing activity. The book explains how some activities have worked whilst others haven’t. Its promotional work with the Rain Forest Alliance is a good example of a strategic partnership that has worked well, but is more complex to manage and market than it first appears. The book also describes the public relations challenge of being big and still wanting to grown to the point where small independent businesses feel threatened and the negative impact this can have on a brand. There is a strong parallel between the concerns raised by the USA general public when Starbucks stores threaten to open near an independent coffee house, and the concerns raised in UK when a Tesco Express opens right next door to an independent green grocer.

Another interesting theme in the book is the concept of trying to occupy what it calls “the third space” in the hearts and minds of its consumers. The third space is a special place – the home is the first space and the most important place to individuals, the second space is the place where people work, and that leaves another place or space which Starbucks aims to fill – the most important and comfortable place to be when not in either the first or second space. It is an interesting concept and a strong example of a brand trying to own a particular place or occasion in the hearts and minds of its customers. As a marketing consultant in Norwich, I am often helping people to identify the space their brands occupy in the minds of customers.

The most startling thing about the book is that the picture it portrays of Starbucks bears little or no resemblance to the Starbucks I know except for that fact that they both make coffee! The book maintains that Starbucks has managed to preserve a culture where the customer really is king and making the customer happy by looking at every possible detail is the purpose of each and every single employee. Whilst the supporting stories to illustrate this are heart warming, I am afraid to say they are not born out in my experiences of Starbucks coffee houses in England. Perhaps this is because the company is so large now and it is more challenging to preserve the culture in overseas operations. My own conclusion is that this is not the case, and simply the author sees Starbucks through very rose tinted spectacles!!

I still enjoy Starbucks, their coffee and free Wi-Fi access!

Sep 16

2010

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By Norman

In Books I Like!, Xtracts

Tags business services norwich. marketing consultant norwich norwich marketing consultant

Making Ideas Happen

Last night I finished reading this great book. Scott Belsky, founder and CEO of Behance Network, considers the question: lots of people are good at having ideas, so why do some people seem to manage to translate these into tangible useful things, whilst others seem to never get past that initial creative spark. Belsky argues that this is not just about a predetermined mind set or skill set, but that instead we all have a tendency not to make ideas happen, some people have just developed a set of useful tools to overcome these tendencies.

Through his book he provides a set of useful and practical tools that are suitable for both individuals and teams. He gives relevant and practical examples to illustrate his recommendations and conclusions. Belsky talks first about the importance of organisation, not system design, but a method of identifying and managing the key actions required to keep projects moving forward that individuals are intuitively comfortable with. He then discussed the importance of a strong support team, and the importance of extending that team far beyond the comfort zone of an individual. Finally he considers leadership in its own right, and splits this into two distinct areas, leadership of oneself and leadership of a team. He argues that both need to be considered separately but are interconnected.

The nice thing about this book is that it is written in the same style as Jim Collins’ Good to Great and Built to Last, both in the style of reading and formatting. Better still many of the core concepts and ideas seem to inter-connect. If you have a great idea, maybe you should read Good To Great…… if you have a basis for a company but never seem to execute the big idea, maybe you should read Making Ideas Happen…….. if you are like me and still just starting out, I recommend all three!

Sep 14

2010

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By Norman

In Marketing in Norwich, The Wider Topic Of Business, Xtracts

Tags brands business models marketing consultant norwich

Learning from other Brands

I have recently been trying to absorb a lot of information about different business models and how they affect the outcome of businesses.

Two books I have enjoyed reading are “The Story of Green and Black’s” and “Innocent, Our Story & Some Things We’ve Learned”.

Both books are an interesting read but I think the Green and Black’s book is perhaps less aimed at selling more of their own product or more about the story for the sake of the story. What is most striking is that neither of these businesses (or many others it seems), concern themselves with the manufacturing or logistics / warehousing aspects of their business. These are outsourced. Both businesses put great emphasis on maintaining control of the supply chain by purchasing raw materials directly from source, particularly if there is a marketing or brand story attached to this.

They then focus on the routes market, trade marketing, sales, and brand building amongst end consumers. This model offers perhaps greater flexibility and certainly less overheads and things to think about when building the business. The only counter to that is that the business itself doesn’t actually make anything! Whilst this can be seen as a benefit, and some people would argue it is creating value in the brand, it does also expose the business or brand to a much greater risk of acquisition (because the value of the business is lower) and the threat of direct copy-cat products made by someone else. Nobody has to ask the question “This looks quite difficult to make, how do they do this?” This does not appear to have happened with either of the two brands I have mentioned but I still think it is an important consideration. Businesses with a manufacturing technical competitive advantage as well as a strong brand must hold more value than those that don’t.

Other useful things in the books:-

– Use PR. Launching a brand is a story in itself

– Do competitions. Winning awards is great for your brand if you shout about it

– Sample your product. People need to know how good it is

– Don’t compromise of what makes your brand unique. Celebrate it and push it to the limits

– If you can’t afford a big advertising campaign, unfortunately you will still need to advertise, so find innovative ways of doing it cheaply.

– Target listings in stores that have high credibility and work hard to make them work

– Always keep a good handle on your costs both fixed and variable

– If you are small and competitors are big, think more quickly and execute more quickly than they can, but do so to the same quality standard

– If things don’t work it doesn’t matter as long as a) you both realise it and know why b) you have some else to try next

– Your packaging is your most important sales advertisement – get it right and don’t compromise on anything

– For every £10 of extra cash for marketing that your competitor has, you must have £20 worth of passion and commitment

– Build links with likeminded people, businesses and brands in different categories. Make a club and share insights and ideas

– Never be afraid to ask for help

– Always always negotiate to get the best deal.

– Find a good marketing consultant!!!

Sep 14

2010

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By Norman

In Marketing in Norwich, The Wider Topic Of Business, Xtracts

Tags marketing consultant norwich

Just how much does it cost to build a business?

I have just started working with a new client. They have a great idea for a new food product and quite a lot of background knowledge to support their thinking. They have some good contacts within the food industry and in other associated areas such as sales and marketing. The one thing they don’t have is a lot of investment or cash reserves to support the business in its infancy.

Many businesses that launch now seem to do so with some kind of investment package to see them through the initial pre launch and launch phases of the business. But is this really a prerequisite to building a successful business? If you cannot secure £250,000 – that’s the amount of investment Innocent secured before they launched properly in the UK – can a business grow by simply selling a small number of units and reinvesting those returns into more produced units, which in term builds a bigger sales base?

I can see the attraction and security that a large pot of upfront capital can provide. The ability to hire staff with the confidence that you can pay their salary, the ability to go to a customer with a properly costed marketing support programme which is granted in exchange for a listing, are just two examples. However, surely there is a benefit of growing incrementally and at a slower pace. The business is perhaps likely to be more in tune with its customers, listening and learning from every single one. The business is perhaps much better at negotiating hard for the best price on materials. Of even more value is the fact that the business will in time have a longer track record of business and custom which means it cannot be treated as a ‘fashion’ or ‘fad’ brand. Finally businesses that start from scratch are more incentivised to have robust profitable business models and per pound spent perhaps a better asset value to costs incurred ratio.

Clearly there are benefits to working with either model. I am looking forward to getting stuck in with this new team and this new business. It won’t be easy starting from scratch, and we will often wish we had a little more cash, of that I am sure. But on the other hand, if we are creative in how we do things and think innovatively about how to execute our ideas, I think we could have a great story on our hands!! So Watch This Space!!!

Aug 18

2010

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By Norman

In Books I Like!, Marketing in Norwich

Tags marketing consultant norwich Marketing Norwich

Predictably Irrational

I have just finished reading Predicatably Irrational – The Hidden Forces that Shape Our Decisions. I enjoyed the book although personally I think in places it is rather predictable and that some of the findings seem fairly rational to me!

The format of the book also can become a little repetitive. Every chapter is basically, I thought this or questioned that, so I did an experiment with some MBA students, and here is the result that you were not expecting (or sometimes expecting in my case!).

The areas I found most interesting were around people’s perception of price and how this can be dramatically altered by creating a different environment or a different set of benchmarks for what the price should be. The exploration of why things hold more value once we own them, and why price is different to cost were also interesting. Less interesting were some of the chapters around human behaviour, which to me were fairly obvious conclusions – we are animals and therefore sometimes we don’t behave to a mathematical pattern which is entirely predictable. The observations about honest and human behaviour are also interesting but again in my view perhaps not so radical. More interesting was the research around our decision making and how peer groups can affect that. Overall some useful stuff, (from the perspective of a Norwich marketing consultant) particularly when considering how to stimulate sales or build a new proposition for potential customers, but not as exciting as Freakonomics!

So, you open your fridge and someone has left some Coke and some cash. If you are thirsty maybe you will take the Coke, but if you need some cash, you still don’t pinch what’s in the fridge. Predicatably Irrational…… you tell me?!!

pi2

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