Pushing Products Through The Pipeline
When Macy's California in San Francisco sold 800 sets of General Housewares Corp.'s Magnalite Professional Cookware in two weeks -- turning over the $239 item at almost three times the normal rate -- the major credit went neither to the retailer, Macy's, nor to the manufacturer, GFIC. The person most responsible for the successful sale was sentative who created the merchandising concept. Brady repackaged each set of pots and pans in wine storage cases to coincide with the National Wine Convention in San Francisco. Then he sweetened the offering by including a free cookbook and an invitation to cooking demonstrations (on Magnalite Professional Cookware) at Mirassou Vineyards in San Jose.
Brady represents a small but growing number of manufacturers' agents in the housewares industry who have dramatically expanded the role of the traditional rep. It used to be "a salesman opened up a catalog of wares and took orders, item by item," says Gary Riley, president of the Cookware Division of GHC in Terre Haute, Ind. Brady, he notes, is a marketer, sensitive to the needs of consumers and retailers alike.
In 1976 Frank Brady left his job as marketing director for Seth Thomas Clocks in Thomaston, Conn., and went to California with the intention of becoming a manufacturer's representative. Gourmet cookware looked like a promising area: Californians were becoming increasingly interested in gourmet cooking. "They weren't competing with Mom, but with chefs in local restaurants," recalls Brady. Furthermore, high-quality gourmet housewares, largely designed and developed by Europeans, were not yet widely distributed in this country. Besides, gourmet products suited Brady: They were complicated enough to require an explanation and extra merchandising before consumers felt comfortable buying them. Fortunately for Brady, those kinds of teaching and merchandising skills were scarce.
In the housewares industry, few manufacturers have the advertising dollars to "pull" consumers into stores with national ad campaigns or the direct salespeople in the field to train and motivate retailers to sell their products. Manufacturers are forced to rely on the retailer to move products off the shelf. The results are mixed.
While most specialty stores cater to customers and are familiar with the products they carry, the large department stores are frequently staffed by people with little knowledge or interest in specific products. "That's where we fit in," says 37-year-old Brady, who brings to the manufacturer the complete services of a marketing department in the field.
Last year Brady Marketing reported total net sales of around $20 million, up from $11.1 million in 1982, placing #138 on INC.'s 1983 list of the 500 fastest-growing private companies. Seven commissioned salespeople and more than 100 part-time demonstrators are organized to create personal merchandising programs, train retail sales people, and develop advertising and special events. "If we help a person make money," theorizes Brady, "the more money we're going to make." Instead of selling to the retailer, Brady sells through the retailer to the consumer. With that perspective, the essential marketing question shifts from "How can I strike the best deal with the retailer?" to "How can we [manufacturer's agent, manufacturer and retailer] sell as many goods as possible through the store?"
One way, says Brady, is to sell programs, not frying pans. Last fall, for example, the company organized a merchandising program to sell Robert Krups food slicers. Mary Wagner, Brady Marketing's vice-president, worked closely with the merchandising manager and buyer for The Broadway, a Los Angeles-based department store, to develop a print campaign in the Los Angeles Times. But advertising was only one element in the program. Brady Marketing also trained the stores' salespeople to promote the slicer, brought in demonstrators to show consumers how to use it, and developed a wide assortment of point-of-purchase materials, including posters, banners, consumer literature, and a recipe sheet showing 101 ways to use the slicer. The expense of the program, split among manufacturer, retailer, and Brady Marketing, was outweighed not only by an eightfold increase in weekly sales, but also by The Broadway's subsequent order for 5,500 units. "You couldn't handle every order that way," admits Brady, "but sometimes you need a special effort to push you ahead."
Rather than repeat a successful performance, Brady Marketing mixes and matches promotions to create a different program for each retailer. "You don't need to reinvent the wheel every time," grants Wagner, "but the details must change to fit the personality" of the retail store and the local consumer. For example, because Macy's customers in northern California tended to be more familiar with the Krup's food slicer than The Broadway's southern California shoppers, Brady Marketing suggested that the company offer a free salami with each purchase, rather than focusing on demonstrations.
In general, Brady Marketing can't assume that level of product familiarity. Before a customer can feel comfortable enough to buy a $400 electric espresso/cappuccino maker or a salesperson can feel at ease selling it, both must be taught how to handle the product.
"Sales associates [in department stores] are starved for knowledge," says Wagner, who arranges training dinners several times a year for the stores' salespeople. "We don't just teach them about the machine," she says, "we explain how to sell it," simplifying the selling process into four steps: acknowledging the customer, drawing attention to the product explaining its features and benefits, and closing the sale. "Once they feel comfortable, they push it," says Leslie Berger, a buyer for J. W. Robinson's, a department store in Los Angeles.
Besides training retail salespeople, Brady Marketing spends at least eight hours prior to actual demonstrations explaining products and sales approaches to demonstrators. Unlike many retailers and manufacturers that hire demonstrators practically off the street, Brady Marketing screens all prospects by telephone before interviewing them. Of those interviewed, about 50% are accepted. "We're not interested in someone with heavy demo experience," says Brady. The company values communication skills, patience, and creativity.
Like most employees, demonstrators benefit from proper training and recognition. "We pay demonstrators for coming to lunch or talking on the phone," says Wagner. With weekly computer printouts that report the dollar and unit sales for each demonstrator, Brady Marketing can easily single out top performers for special recognition. Such attention has paid off in an uncommonly loyal and professional network of reps. In fact, Brady plans to expand its demonstrator servies. Like an employment agency, the company intends to contract out demonstrators to manufacturers other than those Brady Marketing represents.
Besides in-store marketing services -- customized merchandising programs, sales training, and demonstrations -- Brady generates interest among consumers outside the retail stores. At a three-day consumer cookware show held in Scottsdale, Ariz., Brady Marketing and Diamond's, a Phoenix-based retailer, rented 200 square feet of booth space in which to demonstrate Simac Appliance Corp.'s ice cream and pasta makers to about 6,000 visitors. To squeeze the most out of shows and promotions, Brady frequently runs prize drawings. Names on the drawing registration cards are later transferred to Brady's mailing list, as well as to the lists of the participating manufacturer and retailer.
Brady's salespeople also encourage small retail accounts, which are reluctant to advertise, to spend cooperative ad dollars provided by manufacturers. And to boost their confidence, Wagner has arranged with the ad departments at the San Francisco Chronicle and the Los Angeles Times to have sample ads prepared at no charge. Once the mock ads convince a store to advertise, notes Wagner, the paid advertising more than compensates for the initial paste-up time.
In 1981, Frank Brady decided to expand his business by leasing a 2,000-square-foot warehouse. "It was a way to protect our customer base of small retail accounts," he says. Because specialtystore owners don't have the confidence to purchase the amount of inventory they should, the warehouse allows the specialty stores -- which represent about 30% of Brady's business -- to order in small quantities and receive overnight shipment on orders.
Seeing yet another opportunity, Brady also formed a new division, Culinary Parts Unlimited. CPU provides retailers with replacement parts for appliances -- including glass carafes, filter paper, and pasta disks -- items that retailers prefer not to stock. Demonstrators and retail salespeople simply hand customers brochures that list CPU's toll-free telephone number. Instead of calling a manufacturer's service center and waiting six weeks for delivery, a customer can expect shipment from CPU within 48 hours.
Few manufacturers have the benefit of working with rep firms that, on their own initiative, go to such extremes as Brady to provide marketing services. Most manufacturers, in fact, complain that their reps don't give their products the attention they deserve. But the problem may not rest entirely on the rep. "Ninety-nine percent of the manufacturers never tell the rep what's expected," explains Thomas R. Lawrence, an investment banker in Memphis and formerly a consultant to manufacturers developing rep networks. "When the manufacturer signs on a rep, he has to articulate the programs he wants done."
Brady has chosen to deal with the kind of manufacturers -- General Housewares, Krups, and Simac, for example -- that work closely with their rep organizations and are willing to incorporate ideas and suggestions from the field. For instance, it was largely upon Brady's insistence that Krups's management decided to change the color of its automatic drip coffee maker from "European" orange to white. That decision, claims Brady, "increased business on the item tenfold."
Since 1980, Brady has purposely winnowed down the number of manufacturers he represents from 20 to 12 in order to allow him to provide the marketing and merchandising it takes to push products through stores successfully. Although he intends to keep that number at the current level or lower, he does plan to diversify. "We're looking for other high-quality products that require an explanation," says Brady. That could be exercise equipment, hi-tech furniture, or ski clothing. "We're not selling cookware," he emphasizes, "we're selling quality and fashion." As a reflection of his own aggressiveness, however, he defines more narrowly future manufacturers he intends to represent: "We're interested in companies that aren't satisfied with 10% or 15% growth a year . . . companies that have the financial resources, the desire, and the sense of urgency to move at a faster clip."