the U.S. Market
A Competitive Game That Plays by New Rules
By Harris Gaffin
The recipe might sound
simple. First make a product, then find a market. Bring
the two together, and bingo! But in selling products from
all over the world, in a country as large and heterogeneous
as the United States, with more than 300 million potential
consumers, is not as straightforward as it might seem.
As David Rogovin, President of THE-ROGOVIN-GROUP based
in Newton, Massachusetts (a Boston suburb) and specializing
in the development of entrepreneurial marketing programs
says, "The U.S. is such a voracious country,
it can quickly gobble up so much product that it can literally
bankrupt the production resources of many off shore companies."
is to try to match a product or a group of complimentary
products to the unique opportunities offered by specific
regions of the U.S. These unique advantages may include
such factors as market size, economic stability, ethnicity
of the population, climate, availability of aggressive
sales representatives, the relative costs of marketing
within each region... Thus, for instance, if after a reasonable
test market introduction in the southern part of the country,
a Ghanian leather goods manufacturer can continue to maintain
a profitable share of market for its products in the same
test region that coincidentally has a combined population
of 10 million people (about the size of Ghana), as Rogovin
says, "That could be a wonderfully,
manageable "world" for them. They may never have to worry
about expanding, or if and when they decide to expend, they
will be sophisticated enough to do so carefully and for good
As the following figures indicate, if
a company was just testing a new product, it would still be looking at a marketing area of significant
Furniture & Appliance
As Rogovin points
out, "Many of these
sales figures are greater than the GNPs of certain countries.
After careful analysis of a company's
manufacturing capabilities, financial resources and overall
commitment to exporting, THE-ROGOVIN-GROUP would then design
a customized test marketing program that would, among other
things, include the selection of sales brokers who would
represent the line to merchandise managers and buyers.
As Rogovin states, "In
most cases, initial market tests would be developed on
a limited basis, in a geographic area of manageable size
and cost, in this way we do not overtax the resources of
our exporting clients."
In support of these regional tests, THE-ROGOVIN-GROUP
develops and implements such marketing and sales techniques
for a client as trade and consumer advertising, publicity,
regional trade show participation, in store displays, promotions,
product tie-ins, etc. These approaches help to both sell
the product into the stores as well as move it out. Quite
often, a large portion of these marketing expenses can be
paid for on a barter basis.
The first level of
product success is, of course, gaining sufficient distribution,
and if this falls below the parameters indicated in the
marketing plan then the problems have to be quickly analyzed
and aggressively repaired. As Rogovin says, "There can
be a thousand reasons why a product may not be well received.
We must be fast and accurate diagnosticians."
However, most market
introduction problems can be avoided, since long before
they introduce a product THE-ROGOVINGROUP carefully researches
the product's pricing structure, design, quality, packaging,
as well as its competition. "We
have to know what else is out there," Rogovin says, "and
how it stacks up against both our client's product and our
marketing and sales program. Submitting product samples to
the right group of buyers is one of our standard pretesting
tools for a client's T-shirts, golf tees, TVs, tea bags...
you name it."
Rogovin points out that not all domestic
products are produced or sold in the same way across the
U.S. Even CocaCola, that international standard of product
consistency, adjusts its formula by region. For example,
Coca-Cola is sweeter tasting in the southern part of the
U.S. than it is in the northeast.
Large American retailers like Walmart,
K-Mart and JC Penny do not necessarily buy the same products
for all of their stores in the States. They select a particular
group of test stores and then initiate a product trial. In
addition to appealing to the specific needs of a region,
they are testing the market, much like THE-ROGOVIN-GROUP.
If they don't get favorable results they may be forced to
stop the regional test program, but at least they are not
committed to a national effort before they have projectable
A full JC Penny distribution
program could involve 350 stores, and if you are "lucky," they will
instantly send a fax saying, "We need 2.5 million more units
tomorrow morning..." On second thought, perhaps that would
not be so "lucky"! Since an uncontrolled overnight success can
be a real danger, unless you have your own air cargo fleet
or a few million units already warehoused in the States just
on the off-chance that WalMart might want them. "The reorder/turnaround
problern can be a killer," says Rogovin. "And for a small
company, it could be mass suicide."
This is almost what happened to Reebok,
the athletic footwear giant, when they first attempted to
enter the United States market. The company had only one
small factory in England, and when they added a modest amount
of extra capacity to the plant they thought that they could
quickly begin the distribution of their shoes in the States.
After showing their hightech product line both at trade shows
and directly to key buyers they were well on their way to
major distribution arrangements with large sporting goods
retailers. And the shoes sold so well that Reebok USA quickly
began sending reorders back to England. But the little factory
that could... couldn't! So after a production/distribution
upheaval that almost destroyed the company, Reebok finally
had to regroup and have its shoes made in high volume Korean
factories in order to meet the considerable demands of the
mighty U.S. market.
As Rogovin indicates, the retailing world
of the United States also includes all of the hundreds of
thousands of independent retail businesses that are often
much easier to deal with than the giants of mass merchandising.
In addition to giving a client's product the proper marketing
spin, THE-ROGOVIN-GROUP's strategy involves the testing of
the entire range of retail possibilities... from independent
mom and pop stores to direct response companies, department stores
"There is a
whole big world of products out there and there is an insatiable
demand for new products right here in the U.S. THE-ROGOVIN-GROUP
wants to make it happen for serious offshore companies
that not only want to approach the U.S. market with quality
products, but who understand the importance of playing
the U.S. marketing game according to the new rules of market