Up date to my May 28th, 2014 post about Kraft Barbecue Sauce

If you read my May 28 post about Kraft's new item Pit master's Choice Barbecue Sauce you will see what Kraft was doing. It was a big test! This year Kraft has introduced a fill line of flavors in this size with the new formulation that does not use corn syrup. I guess the test must have worked!

I find it very interesting Wal Mart was the test store for this idea. I found out last week that Wal Mart asked a major tea company to make a product for them that no other retailer had. This year that company is presenting this item to all retailers.

I am wondering if the high cost of getting new items in grocery stores and the high failure rate has caused less and less innovative new products being developed and introduced?

If you have anything to add on this topic please make your comments at the bottom. I would love to hear your stories.

Tax benefits of a home based business

Home based business tax benefits

First let me say I am not a tax expert. I can tell you what my personal tax experience has been and how things have worked over the years for me with regards to taxes. I would suggest you get professional help (CPA) for your taxes if you are going to have business related expenses.

If you have a business that is profitable or unprofitable there is legal tax benefits associated with that business. This is true even if the business is part time and operates from your home or apartment. If you have a regular job you can save taxes by operating a part time business because of these deductions. If the part time business has a loss, that loss lowers your taxable income form your regular job (saves you taxes). Your business does not have to be incorporated for this to happen. In today’s world if you can lower your tax bill you have made money! It is really nice when you have a professional prepare your taxes using your home based business expenses and you get a nice refund check. It’s like getting a raise from your regular job!

How does all this work. Very simple, first get involved with a good home based business. Click here for my suggestion. Pay for everything with a check so you know exactly where your money is going. If you use a credit card  keep all the statements so you can pick out the business related expenses at the end of the year. 

When you start making money from the home based business you may have to pay quarterly estimated taxes (why you need a CPA) to avoid penalties.  You will get a 1099 from the company paying you so all income will have to be reported on your personal 1040 form. That is why keeping up with the expenses each month is so important.

Almost every new business is unprofitable the fist few years. This is when these losses will be taken away from your regular job income. Your goal with the home based business is to “grow” the business to the point that you no longer need your regular job. One of my life’s biggest mistakes was working for a company I did not own.  

The list below is some examples of expenses you can use in your home based business.

-         Internet costs
- Education (seminars, ebooks, reports, other info products)
- Advertising (Adwords and any other advertising costs)
- Hosting
- Domain Registration
- Professional services (software development, graphics, coding etc.)
- Child care (daycare)
- Healthcare costs
- Computer and accessories
- Charitable contributions
- Home office furniture
- Office supplies
- Postage
- Car/Truck Mileage for travel related to the business
- Business use of home
- Utilities
- Cell Phone and service
- Financial services (tax preparation etc.)
- Business meals/drinks
- Legal fees including LLC/Inc. formation
- Renter/Homeowner Insurance
- Real Estate/Personal Property tax

There maybe more depending on your business. Remember you need to keep good records and get the help of a CPA.
Go here to learn about the home based business I like. E-mail me here if you have any questions.

Arthur Rock, legendary venture capitalist in Silicon Valley California, said if you invest in forty start up high tech companies one will be so successful you will make all your money back and much more. Jordan Adler, the number one money earner in Send Out Cards, has said if you sponsor   forty Marketing Distributors in Send Out Cards, one will end up building a massive business. To me network marketing is no different than the venture capital business; both have a high risk of failure with a huge upside for success (money). The BIG difference is you do not have to invest millions of dollars in network marketing so the risk is far less. Less risk is the right direction. Visit http://www.sendoutcards.com/107314   

Learn from smart marketing people

I learn things by watching what smart marketing people do. Kraft foods has many smart marketing people working for them. They are the leading food marketer in the US so when I see them do something new I pay attention. What’s new at Kraft this summer? They introduced a new barbecue sauce brand name. It is called “The Pitmaster’s Choice”. Now on first look this is not such a remarkable thing for Kraft to do but look closer.

The product is only one flavor and one size – 28oz.  They put the product on a pre-built display that is marked “Limit Edition” and put a value retail price on it -$2.00.  The other thing that caught my eye is the formulation. First ingredient is sugar not high fructose corn syrup. No water is on the ingredient statement. This formulation is much more expensive than their regular barbecue sauce or even their premium brand Bulls Eye.

I have only seen this product in Wal Mart.  If this item is exclusive to Wal Mart that would be another fact to take notice of. Wal Mart for several years has merchandised the larger sizes of barbecue sauce off the bottom shelf. This was done to get consumers to trade up thus bringing Wal Mart a higher dollar sale and maximizing the categories profits. I have always thought this to be a good merchandising idea and have often wondered why more retailers did not copy this strategy.  Could this new Kraft item be part of that strategy? I had a Wal Mart buyer that would share his thoughts about the category and how to increase sales and profits. His idea was if the consumer has a larger amount of barbecue sauce they will use more sauce each meal and use it for more meals. In other words if you got it you will use it. I think this is the idea behind 2 liter soft drinks (or larger sizes).

Ok, so Kraft sales person knows the category strategy for barbecue sauces at Wal Mart. This is how he/she introduces this new item  to the Wal Mart  buyer; How would you like a Kraft barbecue sauce in an economy size, most popular  flavor, premium formulation, and value priced?  How would you like an exclusive on this product?  All you got to do is buy my pre-built wing pallet display three times in 2014 and we can make that happen for Wal Mart.

Why would the buyer make this deal? It has all the elements to make a huge category increase in sales and profits for Wal Mart. Not to mention there is most likely a media program that will include coupons and radio advertising. This product is pointed right at the serious barbecue sauce user (heck they named it Pistmaster’s choice) as well as the person reading product labels and all the negatives about high fructose corn syrup. Large size, value price, and on a labor reducing pre-built display. How could they say “no”?

One more point; The pallet display holds 150 bottles. Based on a $2 retail I estimate the unit cost to be $1.60 so the delivered cost on this display is $240.00. If Wal Mart puts this display in 4,233 stores three times in 2014 that would be a total sales of $3,047,760.00. That would make Kraft Pitmaster’s Choice the number 1 barbecue sauce skew in the US!  Not bad for one point of distribution!

This is more sales than I was doing with Big Show Foods my best year of a ten year run. My single best marketing tool at Big Show Foods was a pre-built display holding a combination of three flavors and a total of 600 bottles. Guess who purchased all the displays? Yep,  Wal Mart!  

One last thing to think about; what is the consumer psychology of putting “Limited Edition” on the pallet display SIX different times? You think it creates a sub-conscience desire with customers? I could write a book on this subject. 

I value your questions and comments.

Are you planning a large size pallet display for your brand? If “yes” call me   at 919 349 7874 or e-mail me at tom.price@earthlink.net for some cost information.

Up Date on Uncle Yammy's barbecue sauce marketing plan

Scroll down a few post to read about how I am helping Uncle Yammy's brand.

We just received sales results for Food Lion. After four weeks of TV advertising sales are UP over 550% vs. same weeks last year! Keep in mind this was done in the winter when people were not cooking outside. We have attracted around 1500 new customers to the Uncle Yammy's brand. Stores are experiencing out of stock conditions after four weeks. The only other area Uncle Yammy has store out of stocks is a market he has been in twelve years. Effective marketing built the Uncle Yammy's brand to a level in four weeks that took twelve years to accomplish in another market. 

Guess what? The lift in sales has paid for the marketing plan! We will continue to invest marketing dollars in this market until we reach our goal of having 12,000 new customers. This number of customers should buy between 1,000 and 1,200 cases of product per month. What would happen to your business if you had a lift in sales like this?

E-mail me at tom.price@earthlink.com if you have questions or call me at 919 349 7874.

I value your comments so please tell me what you think about my blog posts. My goal is to help people market their brand by sharing things that work. 
  

How do I get started?

I get asked this question a lot; I have a great barbecue sauce. All my friends like it. I make small batches and sell. What do I do next?

If having a food business is your dream you are in very good company. Believe it or not most of the great food companies in America were started by an entrepreneur making small beatches and selling to their friends and neighbors. Look at the company history of Campbell’s Soup, General Foods, H.J. Heinz, and most every product in the frozen food case. They were all started by people with a dream and the drive and determination to make it happen.

Can it happen today? 

The short answer is “yes”, but there are some major things that have changed that make it a lot harder to get a food company off the launch pad today. The first thing that is different today is the grocery store business. One Hundred years ago there was only one chain grocery store. The rest were small “mom and pop” type locally owned grocery stores. There were not as many products and the new products generally were innovative and stayed on the shelf long enough for “word of mouth” advertising to build the brand. Not as true today with most new products being line extensions to existing products or just “me too” type products with little or no real point of difference. That is not to say all products introduced today are not innovative—yes some are but not many.

When I started in the grocery business working for a major national manufacturer way back in 1976 the business had started a major change in direction. All the power in the grocery business was in the hands of the major manufacturers. Companies like Proctor and Gamble, referred to as Proctor and God in those days, told the retailers what to do. All the P&G sales reps looked, dressed, talked, and acted the same. P&G had the best training program in the business. They could change a person’s personality through their training. Most if not all grocery buyers hated them because they told the buyers what to do. Why? Because P&G controlled consumer behavior through their TV advertising. If P&G ran a TV ad the grocery store “HAD” to have the product on the shelf. There were only three TV stations in most markets and TV advertising was very powerful especially when skillfully done. My favorite story about P&G was when Lever Brothers came out with Surf Laundry detergent. All the grocery buyers were singing a little jingle that said “Surf’s in Tide’s out” because they thought Surf laundry detergent was going to knock a big hole in Tide laundry detergents market share and they were going to do everything they could to help. See if you can find Surf detergent today.

P&G was not the only company that used the power of TV. The corporation I worked for took a simple aspirin pill and turned it into a mercurial pain reliever called Anacin. They took a high grade soap and turned it into “dry cleaning” in a bottle –Woolite.  They solved a very distasteful problem with a product named Preparation H. It was all done using TV advertising and a lot of money was made in the process. My company was named American Home Products but Wall Street called it American Home Profits.  

The shift in power from brands (manufacturers) to stores (chain stores) was helped because of cable TV. Remember when cable TV came out? People said why pay for something that I get for free now?  Now if you do not have cable with over one hundred channels you are living in the dark ages. At the same time grocery stores turned into be big chains that built stores as fast as they could lay brick. Result? Manufactures no longer had the control over consumer behavior due to the many channel options and chain grocery stores started springing up like weeds.

I remember the day I called on a buyer to present a new item (Woolite Upholstery Cleaner) and he said “Tom, you got a great product BUT to get it in my 126 stores you are going to have to give me 1 free case per store”. I was shocked! He wanted me to “Pay” to get on his shelf??? Fast forward thirty years…….. The going rate for distribution in the barbecue sauce category (in the South) in a medium size grocery chain is $10,000 per item IF the buyer likes the rest of the marketing plan. That marketing plan better have a lot of ways designed to get the consumer to try your new product or $10,000 will not buy you six inches of shelf space (on the bottom shelf).

Can a new consumer products company get started today? I like to say to make a small fortune in the food business today  start with a large one! Stay tuned for some things I have learned that will not cost you a dime.

Please make comments. Comments help me understand if I am helping people and they also help me understand what people need help with. 

Marketing will result in increasing brand awareness and sales

What is marketing?

 Marketing is the process of communicating the value of a product or service to customers for the purpose of selling that product or service.

Three key words in this definition; Communicating, Customers, and selling.

In my view the word “communicating” is the most important part of Marketing. All communication done to build a brand should result in  positive behavior by the customers. The most positive behavior is the purchase of the product.

Small food manufactures have the problem of not having enough margin to  allow them the luxury of investing in  effective Marketing or communicating.

 

But wait! What happens if you can do this effective communicating for FREE? Yes FREE! Would you not want to do this? But How?

You as a small food entrepreneur must master (learn) to use the free marketing tools available today. They are ranked in order of importance;

 Web page

 Facebook page

Blog

Youtube

Twitter

These five FREE marketing tools can take your company up the ladder of brand awareness and get your sales to a level of profitability without you spending a dime!

What could you spend your time on more productive than learning to master these tools?

IF YOU ARE MANUFACTURING YOUR OWN PRODUCT STOP NOW. 

Find someone to do that for you and spend the time you were spending on manufacturing learning these marketing tools. If you need help finding a manufacturer for your product call me at 919 349 7874 or e-mail me at tom.price@earthlink.net and I will help you find a co-packer and show you  how to use the aforementioned marketing tools.

I welcome your comments and they are greatly appreciated.  Visit my web page at www.cardmarketingplan.com to see how I personally use these marketing tools.