So far, free enterprise seems to be taking its course. ClearVue sales increased steadily until July, traditionally a slow period for glass cleaner. Today O'Kane reports that the product is on the shelves of every major supermarket in New England and has 8% of that region's $10-million glass-cleaner market. In May Clear Vue had its first profitable month. The company has so far been able to get paid for its product before it must pay suppliers. If that continues, Berryan and O'Kane plan to devote those profits to slotting fees, marketing for new stores, and introducing a new refill.
O'Kane hopes to do a solid regional business, perhaps up and down the East Coast. He dismisses the idea of going national in supermarkets: Clear Vue couldn't afford it. In the meantime, what if a good offer comes along from a large company? "Everybody's got a price," he admits -- but claims he's not looking to sell out.
* * *
Still, after a good bit of success, O'Kane would like to sit back and catch his breath. But he's far from established, and there are several pressing issues he must confront:
* Until now Clear Vue has manufactured on a just-in-time basis. But as volume rises, a surge of big orders could strain O'Kane's operation. Recognizing that, he's currently working to build up inventory.
* If ClearVue begins to infringe too much on products like Windex or Glass Plus, those products' manufacturers could decide to squash it, as often happens in the consumer-products industry. One obvious route: discounting their products heavily only in the regions where ClearVue sells.
* Alternatively, any competitor could break down the ClearVue formula and imitate it easily, and steal market share. Then again, if it's ClearVue's appealing packaging, and not its formula, that attracts shoppers, that's a competitive advantage that is even easier to duplicate.
* O'Kane doesn't especially enjoy the day-to-day details of running the business. Public relations and selling, he admits, are much more up his alley. How long can or should he wait before putting together an experienced management team?
* Then there's the deal with PPG, which locks him out of all retail distributions outside New England. Will that prove to be too severe a limit on ClearVue's potential market share? O'Kane may already think so, since he has effectively broken the deal by selling in New York and Pennsylvania.
One thing is certain: whatever the outcome, the great ClearVue experiment has changed the mind-set at Lawrence Plate Glass. Walter Demers Jr. talks enthusiastically of a day when ClearVue might be as big as -- or bigger than -- the parent company. "Brooks has taught us all a little bit of a lesson," says Walter III. "We learned that you don't have to set parameters for yourself. The doors we all thought were closed didn't turn out to be."
EXECUTIVE SUMMARY
The Company: Clear Vue Products Inc., Lawrence, Mass.
Concept: Take a popular sideline product that had never been aggressively marketed and introduce it to the mass market. Expand distribution to supermarkets throughout New England and, eventually, up and down the East Coast. Trade on product's strong formula and on testimonials from longtime customers.
Projections: Sales of $802,000 in fiscal year 1991, with sales rising to $5.49 million by 1994. Aiming for pretax margins of 13%.
Hurdles: Gaining distribution in supermarkets without having the budget for the fees they demand for new products. Differentiating a product in the extremely crowded glass-cleaner category. With a minimal marketing budget, taking market share from multibillion-dollar companies.
THE FOUNDER
Brooks O'Kane
Age: 31
Family: Married, one son
Source of idea: As the new marketing director in the family business, he was impressed by the letters customers had written praising the company's unmarketed glass cleaner.
Personal funds invested: None
Equity held: 20%
Salary: $50,000
Education: Studied marketing, Plymouth State College, Plymouth, N.H.
Other companies started: None
Last job held: Marketing director, Lawrence Plate Glass; before that, account executive at a small direct-marketing agency.
financials
Clear Vue Products Inc. Projected Operating Statement
Year ending (actual) 9/30/90 9/30/91 9/30/92 9/30/93 9/30/94
Total sales $162,300 $801,774 $1,989,897 $3,416,653 $5,486,105
Cost of sales $133,400 $569,260 $1,253,635 $2,084,158 $3,291,663
(manufacturing and distribution)
Gross profit $28,900 $232,514 $736,262 $1,332,495 $2,194,442
Expenses
Advertising and promotion $0 $60,000 $102,300 $179,850 $586,250
Slotting fees $20,000 $80,000 $207,700 $365,150 $288,750
General and administrative $51,357 $110,390 $214,184 $366,618 $596,417
Interest $1,043 $7,800 $10,000 $10,000 $0
Operating profit (loss) ($43,500) ($25,676) $202,078 $410,877 $723,025
WHAT THE EXPERTS SAY
Observer
