SPECIAL REPORT
Sizing Up 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 250 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."

Rogovin's concept 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 reason."

As the following figures indicate, if a company was just testing a new product in the greater Atlanta area, it would still be looking at a marketing area of significant prowess.

	Total Population		$3 Mil
	Retail Sales		$24 Bil
	Automotive Sales		$5.3 Bil
	Food Sales		$4 Bil
	Furniture & Appliance Sales		$13 Bil

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 market information.

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 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 JC Penny 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 mail order companies, department stores to PXs.

 "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 stratification."