Monthly Archives: September 2014

What You Don’t Know

There’s no big secret. Many of us think we know it all, but don’t know what we don’t know. In many situations, business owners have to make decisions on a daily basis and make those choices without any information or knowledge of whether it’s the right one or not. But they make them.

The prevalence of that daily occurrence has prompted us to agree with the unflattering concept that business owners, like most people, don’t now what they don’t know. Allow an explanation.

Let’s say you want to warranty a product you manufacture and make the assumption someone on your staff can whip up a warranty document. What you don’t know is that such a document, meant to protect your assets against legal action, should be reviewed by your legal counsel. You want it to stand up in court, so unless your staff member is a lawyer, you should have your counsel review the document your staff person creates.

Whether you produce hundreds or hundreds of thousands of products, how to protect your company from legal action is something you need to know … or to know your attorneys can do it and be able to explain what they’ve done to cover your assets.

Your accountant should know about tangible property regulations and other opportunities to save money or reduce your risk. If you are operating your business and don’t have or want to spend the time to learn about these measures, make sure your accounting firm knows what you don’t know. That’s the reason you engage them, so make sure they keep you abreast of potential risks and cost saving steps you should be taking.

There are consultants and other professionals available to assist you with the things you don’t know about your business. Your insurance representative should discuss errors and omissions (E&O) insurance if your company is liable for performance or other risks. Do you have adequate fire, flood, and other coverage? Do you know if any of your employees knows how to operate a fire extinguisher? Do you?

Did you know your website should be updated regularly? Does your web developer check on your search engine compatibility or updates every month? Is your web content still relevant to your target market? Have those market segments changed? Odds are they have.

When you start thinking about all that’s involved in operating your business, it can be overwhelming. Especially when you consider what you may not know that could pose a threat to staying in business. Things like changing tax laws, interest rates, banking regulations, market shifts, and consumer trends can be significant if they put you at risk without your knowledge of their impact.

Keep an open mind. Avoid assuming that everything is fine the way it is. Rely on your professional team – bankers, insurance agents, marketing professionals, legal counsel, accountants, and business/marketing consultants – for the wisdom that keeps you from being blind-sided. Ask for help when you need it. If you don’t think you do, it’s probably the time you need help the most.

Brand Your Work – Work Your Brand

Brand Success: Tylenol

Have you ever asked for acetaminophen?

More than likely, you’ve asked if anyone has some Tylenol. That’s a classic example of brand success. If you visit the Tylenol website, you’ll find 20 different varieties of the product, and learn that the parent company is the McNeil Laboratories subsidiary of Johnson & Johnson.

In the mid ’70s, Tylenol moved from the 5th most popular analgesic to become the number one branded over the counter (OTC) analgesic product on the market. It had become a more familiar pain relieving product than aspirin. As often happens when a product is the top-selling or more recognized brand, someone or something tries to take it down.

In 1982, someone tampered with bottles of Tylenol Extra Strength by adding cyanide which killed several people in the Chicago area. No one was ever caught, but Johnson & Johnson made a smart move. The company distributed warnings to hospitals and distributors and halted Tylenol production and advertising. On October 5, 1982, it issued a nationwide recall of an estimated 31 million bottles of Tylenol products with a retail value of more than $100 million.

Some considered the move a death knell for the product, while the consuming public praised it for the emphasis placed on the greater well-being of the general public.

The company advertised in the national media for individuals not to consume any products that contained acetaminophen. When it was discovered that only capsules were tampered with, Johnson & Johnson offered to exchange all Tylenol capsules already purchased by the public with solid tablets. The company also took the innovative step of creating tamper proof seals for bottles, creating a renewed sense of security with the consuming public when Tylenol was re-released.

Now, more than 30 years later, the tampering incident is little more than a footnote in the product’s history. The Tylenol brand owns the market for acetaminophen pain relieving products. Bayer still owns the brand recognition for aspirin, while one of the other pain relieving medications, Ibuprofen, has become recognized for the product rather than the manufacturer. In essence, it is it’s own brand.

The lesson in this case study of a successful brand is that Tylenol has dominated when it comes to the 1st Law of Marketing: The Law of Leadership.

It is the leading brand because it is the first brand in the prospective customer’s mind. People don’t ask for acetaminophen, they ask for Tylenol. Once you have a customer, they are likely to stick with your brand – as evidenced by Johnson & Johnson’s success with recalling Tylenol products because of the tampering incident. Tylenol has become the generic term for acetaminophen, another example of that 1st Law of Marketing.

Remember that marketing is perception, not the product, so people perceive the first product in their mind to be the superior product. The first brand tends to maintain its leadership because the name often becomes generic, as is the case with Tylenol.

Professional consultants are available to help your product become the #1 brand at whatever scale is possible.

Brand Your Work – Work Your Brand

Viable Options

Which direction to go may not be obvious.

In our last blog, we wrote about the importance of feasibility studies. They can be critical in deciding whether your business idea is viable or not.

One aspect of a feasibility study that comes up is the various options it often exposes if the original subject loses luster. When a study is commissioned and a consulting firm such as Brand Irons is engaged, the business owner or entrepreneur has a fairly clear concept of what they want to accomplish. They may have a business location and other variables in mind for establishing their operations. While those may represent the ideal, the business owner needs to be receptive to what the study’s findings reveal, however.

The study may, and often does, uncover that while the concept may be a good one, the short- and long-term economic viability is less than desirable.

In the course of a study, however, new and often better options arise from the research. More economical and durable equipment options may be discovered, for example. A more reasonably priced piece of property a block away on the other side of the street may actually be more advantageous for consumer accessibility, and be more affordable. An entirely different, yet potentially more profitable, market segment may be identified. The study may also reveal that an entirely different product line may be the better way to proceed. These are completely unforeseen developments that are revealed in the course of a feasibility study.

That’s why we encourage business owners to keep an open mind and embrace the potential that another option may crop up and be better in the long run. They should avoid locking in on one, and only one, option. Different vendors and investors or financial partners may also be discovered when the entrepreneur is amenable to suggestions.

The purpose of the feasibility study is not to tell the person with the idea whether to go forward with their business concept or not. It is intended to provide the decision maker with reliable information on which to base their choice. That information, when thoroughly digested and evaluated, forms the knowledge base that gives justification for whatever decision is made.

The beauty of this process is that it reduces the risk of throwing boatloads of money at a project that fizzles before it turns a profit. Yes, there is a cost to conducting the study, but if you can save hundreds of thousands of dollars by sending a few thousand instead, it is worth the effort. And, if the decision is made to move forward, it’s money well spent.

Brand Your Work – Work Your Brand