The payback was not long in coming. Within six months Inner Beauty Hot Sauce had garnered mention in half a dozen magazines, among them such widely circulated national journals as Metropolitan Home, Family Circle, and CondÉ Nast Traveler. The coverage, Pendergrast believes, earned Inner Beauty more than just free exposure. "The difference between advertising and having your product mentioned in an article is credibility," he says.
Today Inner Beauty appears everywhere, from the menu at The Four Seasons Hotel in Chicago to the cart of a sausage vendor named George, outside Fenway Park in Boston. Sales this year will approach $200,000, wholesale. Pendergrast, who spends 60% of his time helping to manage the restaurant, estimates he has spent $6,000 in the past three years in direct-marketing costs (postage, samples, and other promotional materials).
Company owners -- especially outgoing company owners -- can also take actions of their own to achieve the credibility needed to drum up business. That is Bailey Ruff's strategy. Ruff, his wife, and his son run two hardware stores in Arlington, Tex. It's a town without its own newspaper, TV station, or radio station. No matter. Arlington Hardware was voted the third-most "fun place to shop" by readers of the neighboring Fort Worth newspaper.
From the start Ruff has managed to get noticed. In the inflationary late 1970s, shortly after he founded his first store, then-president Jimmy Carter went on the airwaves to ask the nation to please follow some price and wage guidelines. Ruff quickly ran a small ad in the Fort Worth Star-Telegram, saying, in effect, "Yes, Mr. President, our store will comply with your guidelines. And we will post the names of suppliers that don't." A Dallas TV station snapped it up, and Ruff found himself on the evening news. A dozen radio interviews followed.
Suppliers that had routinely raised prices more than 5% every few months stopped doing so; the threat of exposure was enough. Sales, meanwhile, doubled from 1978 to 1980. "Fifty-percent increases weren't unusual in those years," recalls Ruff. "It gave us super credibility to be on the 6 o'clock news. We were still a young company then. It let people know we were serious about keeping our prices down."
These days, with 60 employees and his stores' sales at about $10 million, Ruff -- and Arlington Hardware -- continues to be in the public eye. For the past three years, Ruff -- dubbed "Mr. Firecracker" by the locals for underwriting the Fourth of July festivities -- has had his own TV gig. "On the House," a short spot at the end of a popular cable-TV show on real estate, airs four times a week and features Ruff offering tips on home repair and gardening.
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Event Marketing
Event marketing has been going on as long as Betty Crocker has been sponsoring bake-offs. A now time-honored institution among consumer giants, event marketing has emerged as one of the fastest-growing arenas in marketing. But billion-dollar benefactors are not the only ones playing the field these days. Among the North American companies that will spend $3 billion sponsoring events this year, some of the savviest are small, niche companies that manage to turn their products into public spectacles and, as a result, transform their marketing into news events.
Innkeeper Chuck Hillestad, for example, has made event marketing his chosen weapon for penetrating new markets and offsetting business cycles. Through one event alone -- his Romantic of the Year contest, which offers prizes including a candlelight dinner, candies, breakfast in bed, flowers, and, of course, a night at his Queen Anne Inn -- he has reached hundreds of new customers. The cost: excluding the prizes, about $500 -- to photocopy and mail his press releases. After a winner was chosen, Hillestad sent discount coupons for one night at the inn to all the contestants. In return, he estimates, he got 30 to 40 new bookings that winter. The event took place, not so coincidentally, just after Christmas, the inn's slowest time of the year. "Last year turned out to be our best winter ever," he says of the inn, which had approximately $270,000 in annual revenues.
Then there's the New England Culinary Institute, in Montpelier, Vt., which has turned a campus pastime into a sales tool for recruiting students. In a sort of Olympian bake-off, the school's annual Quadrathlon pits culinary schools from different regions against one another. Each five-member team begins with an identical bag of mystery ingredients that its cyclist transports in a 15-mile loop to the institute's restaurant kitchens. Each team's prep cook then takes over, decides a menu, and prepares the ingredients, which he or she then passes on to the team runner. The runner carries the ingredients on a tray in a two-mile race uphill, where each finish chef must cook a meal. Finally, each team's server presents a finished meal to three judges.
As a result of its colorful contest, the school, with tuition revenues approaching $6 million, has attracted national publicity, including coverage on "Good Morning America" and articles in publications ranging from The New York Times to Runner's World. "In any given year 25% of the applicants we accept will have heard about the Quad and have had a positive response to it," says cofounder John Dranow. And the out-of-pocket expense for the competition is a mere $1,500.
Other companies are using events to launch products, gain wider distribution, build awareness, and just plain sell. And few are doing it better than Suntex International, an Easton, Pa., game manufacturer founded in 1980 by Robert Sun.
In 1989, after launching one modestly successful product, Sun knew rolling out his new game would be no trivial pursuit. If he had any dreams of selling his card game in volume, he'd have to persuade the large national chains, the real king makers in the game business, to cede him shelf space first. Without a titanic (and, needless to say, costly) promotional campaign, he faced weak odds of doing that. What's worse, his latest diversion was a math game, dubbed 24. Its object: to combine the four numbers on each card, through quick mental arithmetic, to equal 24. Not exactly Nintendo. And few math games had ever sold in big numbers.
