Ken Meyers
Cofounder and president of Smartfoods Inc., based in Marlborough, Mass., a snack-food maker that successfully went from regional to national distribution; Meyers left the company this year to found Silverback Creative Inc., a "guerrilla marketing" firm based in Wellesley, Mass.
A couple of things bother me. For one, if you look at the amount O'Kane has allotted for slotting fees over the next three years, he's hoping to garner 50% of his distribution in the company's fourth year. If he's going to build brand presence, he had better not take four years to get there.
I also think the deal with PPG was ill-advised. To give up the option to retail outside New England was ridiculous, considering there's no evidence that PPG itself can provide that kind of blanket distribution. PPG has distribution through glass stores and hardware stores, but what about the supermarkets and the Wal-Marts of the world? It would have made much more sense to grant PPG exclusivity only in its own distribution arenas.
From a marketing point of view, he should take ClearVue's strongest point of brand differentiation -- that the formula is six times stronger than the big guys' -- and play it for all it's worth. That's an advantage, but it also comes with its own set of risks, notably that it sets consumer expectations very high. And there's nothing worse than delivering less than 100% on a consumer product. Besides that, I suspect glass cleaners may be a product category where it's OK to be just good enough. And even though ClearVue is stronger and better, if it gets down to a price war, it may lose its customer base.
So far O'Kane has gotten where he is on sales-and-marketing moxie, but a point may come soon at which significant strategic decisions will have to be made. If he's not really interested in running his company, he ought to find someone who is.
Observer
Wilson Harrell
Has run 60 mass-merchandising brokerages, doing a total of $500 million in sales; took household cleaner Formula 409 national and sold it, six years later, to Clorox for $7 million; now a consultant in Cummings, Ga.
ClearVue has passed the most severe of all tests: consumers are buying and rebuying it. Freeman Chase, an important broker, made a key statement, saying that ClearVue is "vastly superior to anything currently on the shelf." I don't believe Chase would have taken it on, or that supermarkets would have put it on their shelves, if the product did not indeed do what it claims. That's the marketing edge O'Kane needs to build a national business. But time is of the essence -- before someone copies his product.
What should O'Kane do next? First, he should develop a national rollout plan, even if it's a market-by-market strategy. And the key to that must be television advertising that dramatically demonstrates the product's advantage.
Next, to compete with the big boys, he should leverage his relationship with Freeman Chase to attract other large brokers with whom he can strike deals -- effectively, partnerships. He might say, "Instead of your usual 4% to 5% commissions, I'm going to give you 10% the first year and 5% thereafter on a 10-year contract. But you pay the slotting allowances." Brokers like long-term commitments like that.
He'll also need to raise some money. If his numbers are accurate and he's got the distribution and sales he says he has, this is an absolute can't-miss public offering. He could raise $4 million to $5 million. Another way to raise money may be a private offering among the brokers he'd like to deal with. In other words, he could develop a running private placement on a market-by-market basis, as needed.
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Competitor
Bob McGee
Brand manager of DowBrands' Glass Plus glass cleaner
Staying strictly regional is the best shot ClearVue has at success, especially with minimal marketing dollars. What's a long shot on a regional basis becomes almost an impossibility on a national basis, because the extent to which big competitors try to eliminate you is directly related to how big an impact you have on their business.
A big strike against ClearVue's entry into the marketplace is that it is somewhat ill-timed. Procter & Gamble is launching its new entry, and Windex Professional Strength was launched in June. Everything is going to heat up in 1992. Spending on a national basis for glass cleaners could approach $20 million next year, and ClearVue's $40,000 ad budget is not going to break through too much clutter. Regionally, the local, homespun marketing pitch may play well, but O'Kane would be foolish to think he could expand that nationally.
The same goes for distribution. You're much more likely to be successful making a heartstrings pitch to a local chain than to a national outfit like K mart, Wal-Mart, or Target. And it would be very difficult for any national cleaning product to be successful if it could not play in the general-merchandise class of trade.
ClearVue supposedly cleans glass better, right? It's difficult, without significant advertising and consumer promotion dollars, to try to prove that. There's also the problem that 90% to 95% of glass-cleaner users are extremely satisfied with their current brand's ability to clean glass. Brand loyalty is strong, especially when you're going up against products with the name recognition of a Windex.
