Electronic Retailer - December 2011 - 38

BY STEVEN FEINBERG

Case Study

How to Cook Up a Successful Offer

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electronicRETAILER | December 2011

Enlisting a global sourcing partner early in the process leads to a well-rounded offer for Maxxus Marketing and You Can Cook.

Marketers who want to afford themselves the best opportunity for success should consider enlisting a capable global sourcing partner into the product and offer configuration discussion early in the process. The reason is fundamental: Direct response programs typically require a cost of goods sold (COGs) relative to retail price of four or five to one. In other words, if you are selling something for $1, its manufacturing cost should be $0.20 to $0.25. One of the main reasons is the cost of media airtime, which can be very expensive. Given this equation, marketers are challenged with having to create the greatest perceived value with a realistic cost basis while maintaining the kind of high standards that consumers expect. This effects everything from the packaging to the sweeteners that comprise a “but wait, there’s more” offer. To illustrate how such collaboration works, let’s examine the case of Maxxus Marketing, LLC and its product You Can Cook. You Can Cook was developed by Maxxus’ President Shawn Alikian to help everyday people master the ability to cook restaurant-quality meals at home. Alikian recognized that, while professional cooking shows are wildly popular, most people don’t possess the skills necessary to cook like the chefs they see on TV. To bring the program to market, Alikian worked closely with DRTV experts RW Advertising and owner Sean Ryan to help create a compelling product offering and produce a winning product and infomercial. As Ryan puts it, “When we get a client interested in doing direct response, we ask ourselves, ‘How can we create a kit with the concept that will reinforce the value and make the customer thrilled when they receive it?’” To find the answer, he enlisted trusted partner SF Global Sourcing. Through a brainstorming process that involved the three parties, the team set out to develop an offer that would give consumers a tremendous value, while keeping wholesale costs manageable. The original offer configuration Maxxus had in mind would have retailed for $200 to $300, a figure the team felt would be cost prohibitive. After vetting many possible offer components via a series of back and forth meetings, SF Global Sourcing sourced samples and costs for a variety of possible items that ranged from knives to kitchen gadgets to a hardbound cookbook. Through these collaborative sessions, the team evolved a product offer that would give consumers great value and a rich experience, while keeping the

wholesale costs and resulting retail price within the range of most consumers. The final offer arrived at consists of: • 134 individual recipes on eight DVDs grouped into categories, such as Appetizers, Salads, Meat/Poultry, Make Ahead Meals, Seafood, Side Dishes, Soups/Stew/ Chilis and Delectable Desserts, all contained with a handsome book-like case with instructional booklet. • Shopping list flash cards on a ring – one for each of the recipes – that consumers can remove from the ring and then take to the market to get all the right ingredients to make a dish. The flash cards are laminated to ensure durability. • A ninth DVD to be used as a sweetener that highlights fundamental cooking skills, such as how to properly select fruit, chop, etc. It is also used as an enticement in that it is a free gift that is “yours to keep,” even if the consumer returns the product. • Value-add sweeteners for the deluxe version include branded flexible cutting boards, a You Can Cook apron and a downloadable trial cookbook. The result is a well-rounded offer that retails for $99. Note that all of the items are designed to imbed the brand into the cooking process from end-to-end including shopping, food prep, cooking and even cleanup, given the cutting boards are emblazoned with the brand logo. As Alikian comments, “We hope that this initial offering will establish You Can Cook as a lifestyle brand with virtually unlimited line extensions.” The process to arrive at the optimal offer is one that Ryan certainly believes in: “When we get an opportunity to help build an offer, we’ll go right to the chalkboard with our global sourcing partner because they are absolutely solution-oriented.” Suggesting that establishing such partnerships may be one of the key ingredients a marketer needs to cook up a five-star success. Steven Feinberg is the CEO of SF Global Sourcing (www.sfglobalsourcing.com) and the chairman of the ERA Board of Directors. His company specializes in global sourcing of intellectual property via CDs and DVDs, value-added packaging, and all of the elements that comprise an offer – from books to hair razors to Yoga mats – by leveraging a worldwide partner network. Steven can be reached at 1-855-SF-GLOBAL or steven@sfglobalsourcing.com.

Electronic Retailer - December 2011

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