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Kevin Mako: Hello, product innovators. Today we learn from a 40-year marketing professor and author of 30 marketing books on the fundamentals of modern invention marketing tactics.

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Narrator: You're listening to the Product Startup Podcast, the show that helps bring your product idea to life by chatting with successful inventors, product developers,

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Narrator: and hardware industry professionals. Our goal here is to get to the bottom of what makes a product successful, from initial idea to getting your product on store shelves.

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Narrator: taking you step by step to build a functional product and scale your product business, hosted by Kevin Mako, one of North America's leading experts on hardware development for small product businesses. Now, onto the show.

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Kevin Mako: Welcome back, everyone. Today I'm very excited to introduce Michael Solomon to the show. Michael's been teaching marketing for 40 years. He currently is a marketing professor at St. Joseph's University in Philadelphia. He's written almost 30 books, including

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Kevin Mako: many marketing textbooks. His most recent book is called The New Chameleons. It's all about modern marketing lessons. Today, Michael is going to share some valuable knowledge in how inventors, startups, and small manufacturers can learn from the fundamentals of modern day marketing,

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Kevin Mako: but also how to apply these marketing tactics to your new invention products. Now on the episode. Michael, welcome to the show. Hey, thanks for having me. Excited to have you on. I understand

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Michael Solomon: you've written almost 30 books. Yeah, yeah. Well, I have. I mean, it beats working for living, I guess. You know, when you're an academic, we say publish or perish, and there's some truth to that. So, yeah, we've got to keep turning out those books.

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Michael Solomon: Many of them are textbooks, but a few of them, including my most recent one, are our trade books that you might find,

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Kevin Mako: hopefully, at an airport bookstore or something like that. So, yeah, I love to write books. Well, we'll have to talk about your most recent book, too, as we're getting through it, because it relates to the subject matter of marketing today. But we have a bit of a background on

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Michael Solomon: yourself going back to maybe some of the first books you wrote. Yeah, sure. Well,

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Michael Solomon: as you can tell, by my silver hair, I've been at this for a while. I've been a marketing professor for about 40 years at different schools, both here and overseas.

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Michael Solomon: And I am a consumer psychologist. So my background is psychology, and what I study is why we buy. And what it is that marketers can do to really sync

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Michael Solomon: what they have to offer with what people are looking for and convincing people that they have a better solution, which is not as easy as it always sounds. So I've had the opportunity, in addition

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Michael Solomon: to writing my books, I've had the opportunity to work with a number of big clients in a variety

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Michael Solomon: of verticals, including hardware and household products, as well as apparel, cosmetics, It's automotive financial services and so on. And these businesses all sound very different.

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Michael Solomon: But one thing that startups need to keep in mind and established companies need to keep in mind is that you can often learn a lot not just by benchmarking yourself for what your direct

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Michael Solomon: competitors are doing, say, in your own business, but to also look at best practices in some of these other verticals. So my career has been a series of kind of hopping around and having,

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Michael Solomon: having the chance to work on problems in different industries. And the more I do that, the more I realize how much they're all the same.

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Michael Solomon: It's all about creating something that really is going to resonate with customers and really eliminate the need to market the product.

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Michael Solomon: Actually, you know, there's a famous expression by Peter Drucker, a very well-known management theorist back in the day. And he said the aim of marketing is to make selling superfluous. In other words,

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Michael Solomon: if you've done such a great job of coming up with a product idea,

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Kevin Mako: taking it to market, et cetera, in theory, you shouldn't have to sell it because people will just grab it because you found something that they wanted. Now, that happens in the ideal world, not so much in the real world.

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Kevin Mako: Well, this is why I was really looking forward to having you on the show because I think it's incredibly important for hardware startups and people developing new products, whether it be in the entrepreneurial mindset or whether at a Fortune 500 company,

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Kevin Mako: it's important to really understand the fundamental principles of marketing, which is, you know, and you've had plenty of experience working with a number of hardware companies, including Black and Decker and such.

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Kevin Mako: So break it down, where do we even start in understanding if we're looking at marketing,

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Michael Solomon: a fresh eyes approach, how do we understand the basics? And then I'd love to hear some of your best practices that you've seen over 40 years of working with a variety of different companies on executing and best practices in marketing. Sure.

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Michael Solomon: Well, you know, I'll start by telling your audience the same thing I tell my audience, which is my students, every semester. And that is that in marketing, we start at the end and work backwards.

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Michael Solomon: And that fundamental principle right there is something that, especially I think in the space you're dealing with, a lot of people ignore. And what I mean by this is that we don't start at the beginning.

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Michael Solomon: where we have some wonderful new product that we've come up with.

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Michael Solomon: And then we make it or maybe, you know, we prototype it. And then we say, yeah, okay, I wonder who will buy this.

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Michael Solomon: And I've worked with some very large companies over the years. And I've been really surprised at how many of them have that perspective. You know, they may literally have Nobel Prize winners working in their laboratories.

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Michael Solomon: These guys can invent anything. The problem is that they invent the stuff and then the marketing swings into operation. That is not the way it should work.

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Michael Solomon: So what you want to do is start at the end by identifying an unmet need or a need that could be met better.

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Michael Solomon: And once you do that, which is very, you know, that's the hard part. Everything else, if you've done that correctly, everything else will flow naturally, which means that now you start to walk it backward where you say, okay, now that's,

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Michael Solomon: I've identified this gap between how people are doing, whether it's hanging a picture or building a cabinet or whatever it is,

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Michael Solomon: how can I now create an offering product or service or both that will meet that need and how can I convince people that I have what we call

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Michael Solomon: a unique value proposition or a unique sales proposition or selling proposition that's sometimes call,

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Michael Solomon: that is better than the competition and is accessible to these people. So if you're able to do that, these are all big ifs, of course,

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Michael Solomon: then you start looking at the tactical aspects of marketing. And so, you know, it's important for everyone to understand the difference between a strategy and a tactic. So I'm talking 30,000-foot, you know, look here.

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Michael Solomon: But too often we confuse the two. And my students really struggle with this.

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Michael Solomon: A tactic is just a means to an end.

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Michael Solomon: But you first have to define what the goal is before you can create the tactics to reach it. So too often companies, startups and big companies are starting with the tactics like the famous four P's of marketing.

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Michael Solomon: Those are tactical weapons that we have and we can talk more about those four P's.

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Michael Solomon: But first, we need to have that underlying strategy to understand where we're going. So once we have that underlying strategy, that's where we bring in the ammunition that we have. So we have those famous four P's that everybody's probably heard of.

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Michael Solomon: I like to call it to P or not to P, that is the question.

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Michael Solomon: You know, product, place, promotion, and price. We've been talking about these for 40 or 50 or 60 years or something.

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Michael Solomon: sometimes people want to add a fifth P or a sixth P like people or public relations and things like

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Michael Solomon: that. The point is that we have the ways to position our offering using the 4P, such as price,

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Michael Solomon: for example. So a lot of people don't understand that price, it can be a tactical weapon, not just an afterthought. The way you price your new offering sends a signal about the

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Kevin Mako: quality of that offering.

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Kevin Mako: So if you price something very high and people assume it's high quality, they may not buy it because they can't afford it, but you're sending a signal. So my point is that

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Michael Solomon: all of these aspects of the 4P should be used proactively and in sync with the other. So we never just set a price without thinking about promotion or place, which is how we're going to distribute the

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Michael Solomon: product or the product itself. All of these things ideally are a package. And they all go together.

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Michael Solomon: That's great. Now, let's jump into, I really appreciate the helicopter view. I want to look at strategy and the four P's. Can you explain the difference between the two and jump into a bit more

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Michael Solomon: of what you mean by marketing strategy? Right. Well, you know, when you have a strategy and hopefully you have one, you know, and quite honestly, a lot of startups don't have strategies. They're just too

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Michael Solomon: busy trying to, you know, stay afloat. But ideally, you have a strategy, which means you have objectives, where you want to be not just tomorrow, but in the next quarter, in the next year,

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Michael Solomon: maybe even in the next three to five years. And that's where the planning comes in. So the four P's, again, depend on your objective. So let's say, for example,

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Michael Solomon: the strategic vision of my company is that I want to be responsible for 20% of the widgets that people buy for this particular

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Michael Solomon: application in the next five years, right? So that's a good strategy. Is it realistic? I'm not sure. But it's a strategy. And what that means is you want to orient your tactics in order to achieve that

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Michael Solomon: strategy. So for example, if, as I said, your strategy is basically to build awareness and get lots of new users to try your product, then that tells you that you may, for example, want to keep the

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Michael Solomon: price fairly low. You're going to need to promote heavily and repeatedly,

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Michael Solomon: even if it's just the brand name because if it's a new product, people aren't aware of that. You can't just, remember,

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Michael Solomon: the buying decision is a process. It's a series of steps. We don't just wake up one morning and say, oh, you know, Kevin just brought a new widget to market. I think I'll buy that today.

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Michael Solomon: It's like a courtship process. You know, you don't usually propose after the first date, although I guess it's happened. You know, it's a courtship process. And each time you go on another date, you're learning more about the other person, et cetera, or you may decide that you don't

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Michael Solomon: want to learn more about them. That's fine.

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Michael Solomon: But you need to have that in mind. So if my objective, And again, that may not be my objective. My objective may be to, for example, make my existing customers even more loyal than they are now.

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Michael Solomon: That might require a different usage of the four P's. But the idea is whatever your end strategy is in terms of your market entry and market growth,

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Michael Solomon: that's when you start to tailor the weapons that we have, like the price that we set and the messages that we create, where we sell the product, et cetera. That's where we do that stuff.

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Michael Solomon: We don't just do that stuff and then figure out, well, it would be nice to grab 20% share in five years. Again, that's putting the cart before the horse.

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Michael Solomon: And really, marketing 101 is marketing is about meeting people's needs and doing it better than the competition.

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Michael Solomon: So really, your objective,

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Michael Solomon: as I said earlier, the most important thing is to make sure that what you're selling satisfies it.

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Kevin Mako: and need. There have been many instances. I'll give you a quick example, one that just came to mind. There was a deodorant product that came out, personal care product that came out some years, a few years ago.

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Kevin Mako: And it's distinctive offering compared to all the other thousands of deodorants of the market was that there was a certain vitamin that was added so that when you

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Kevin Mako: sprayed this deodorant in your armpit, it applied this vitamin to it as well.

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Kevin Mako: No other deodorant did that. That's really great. But there's a problem. Nobody really cares whether they get that vitamin in the armpit. And so the product failed. In other words, it's not enough just to be new or different.

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Kevin Mako: You have to be new and add value. And those are two very, very different things in the market.

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Kevin Mako: Value is so important. And in the early phases,

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Kevin Mako: it's great to see how you kind of phrase this because first and foremost, make sure you're solving a pain point. And I know dealing with our clients, and I've worked with over a thousand hardware startups in my day.

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Kevin Mako: And generally, I would say the majority of them find a pain point in their own life, which is a great starting point, right? You repeatedly are frustrated by something and you realize there's got to be a better way.

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Kevin Mako: And then you have that aha moment where your mind somehow puts the solution into it. And then, of course, you want to broaden that out and make sure there's other people that are similarly minded.

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Michael Solomon: but of course you have a massive planet of 7 billion people that probably or some may have that same problem. And that's where you realize, you know, that. I like how that's kind of like

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Michael Solomon: your North Star. So you're focusing on that first. And then after that, you want to have a strategy in place. And from what I heard you say, strategy and goals seem to be very tightly aligned.

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Michael Solomon: They're kind of one and the other. Do you find that when you're, if you're, especially imagine as a hardware startup, is it good to set kind of quantifiable goals? Because you mentioned different types of

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Michael Solomon: goals. Like I want to get to market. I want people to see this. But does it help when you're when you're framing, you know, using your tools, which you mentioned then are the four P's, which we'll get into? But starting with something to say, okay, I want to get a thousand units out, you know, within two years.

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Michael Solomon: And that, you know, obviously you need more to your goal. But it does it, do you find it helps with these companies to really put that vision numerically? Or are there other other best practice is that you found that really help people succeed in achieving those goals?

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Michael Solomon: Well, that's a great question. And the answer is probably yes, but not necessarily. The broader question is, or the issue is creating a goal where you can tell whether or not you

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Michael Solomon: met it, right? So very often that's going to be numerically. But I suppose there are cases where you could use other metrics as well.

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Michael Solomon: But you need some way to tell, you know, at the end of a year, were you successful or not?

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Michael Solomon: And if your strategy is phrased very vaguely, you know, like, we want to be the best, the best maker of X, well, what does that mean?

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Michael Solomon: You know, your mother thinks it's the best, therefore you've achieved your goal. So, yeah, I think you need to set some goals where you can be, where you're, you'll call call your bluff. Now, it doesn't mean that it's the end of the world if you don't reach those

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Michael Solomon: goals. And the important thing is that a goal is just, is actually, although we're talking about it as an endpoint, it's actually just an intermediate point because what you want to do

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Michael Solomon: is to be constantly creating a feedback loop where you're getting feedback about your actions and whether or not they're working so that you can adjust them. And so nothing is set in

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Michael Solomon: stones. When you think about direct marketing, for example,

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Michael Solomon: online direct marketing, it's based on that premise of constantly improving the message by, for example, doing an A-B test. I don't know

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Michael Solomon: if your listeners know what that is, but an A-B test means that we take two versions of the same message and we just make maybe a slight alteration. It could even be the size or color of

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Michael Solomon: the font in an ad. We send those out to two groups. of randomly, you know, the group of people that we split in half randomly, we see if one draws better than the other.

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Michael Solomon: And based on that, you know, that's what those marketers are doing. They're constantly adjusting. Sometimes they even have automated programs to do that these days. But my point is that you don't have to be an online communication specialist to do that.

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Michael Solomon: You should be, your product should always be in beta. And this is, I think, one of the biggest departures in marketing in the last 20 years. When people ask me, you know, what is the biggest thing? Of course, there's lots of them.

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Michael Solomon: It's hard to point your finger at one.

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Michael Solomon: But the mindset that your product is always in beta, which is a concept that I think first came to us from software developers who figured out early on that if they could get their best

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Michael Solomon: users to go through the code and spot mistakes, they were. would save an enormous amount of time and money.

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Michael Solomon: But in the process, they also build an impassioned franchise of people, because when you're helping to make these corrections, you become part of the product.

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Michael Solomon: And so to the extent that you can get your customers to give you input on the product, you're usually better off. And we can talk about some examples of that.

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Michael Solomon: But most, many companies, and I will say a lot of companies are changing, but many companies, Apple is the ultimate culprit here. It's hard to argue with success, I guess, but I will.

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Michael Solomon: They're famous for being incredibly secretive about releasing, say, their latest iPhone before it's absolutely perfect.

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Michael Solomon: That strategy

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Michael Solomon: reflects ironically more of an old-fashioned mindset, which is we don't want to release something before it's perfect. But, you know, the fact is that your customers, if they're attentive

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Kevin Mako: and if they're really into what you're selling, they're going to find not necessarily flaws in your product, but maybe opportunities to improve your product that you hadn't thought of.

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Kevin Mako: And so it actually makes sense for you to let them in under the kimono, so to speak, and to actually see what's going on and become part of the process.

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Kevin Mako: So that co-creation process is, I think, one factor that determines whether a startup or an existing company is going to be successful because by creating a,

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Kevin Mako: you know, by taking a legion of your best customers and turning them into almost into employees, you're practically guaranteeing a loyal base. So great example would be, let's say, Lego, right?

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Kevin Mako: Lego was about to declare bankruptcy, I think, back in the 70s or so. Today, it's a hugely successful company.

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Kevin Mako: And one of the reasons is that the insight they had to kind of retool the company to make it a place where users would find a community where they can suggest new applications for Lego products.

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Kevin Mako: And they have something like, I don't know, 10,000 people who do this for them. And there are other companies who do this as well.

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Kevin Mako: And so what they're doing is they're harnessing the power of their customers by not keeping them locked out.

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Kevin Mako: Yeah, and so powerful, especially their early stage companies or new products coming to the market because you have this incredible opportunity. When you release your first version, especially if you're doing a short run or an additive manufacturing run, you have the opportunity to get a handful of units.

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Kevin Mako: We talk about this regularly with our clients and a lot of the time on the show, you don't need to try and sell a million units when you launch a product. In fact, I suggest try and sell a couple hundred, a few hundred, maybe a thousand most.

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Kevin Mako: then use that as your final testing bed, your final R&D bed, before you then probably tool up or, you know, do fairly expensive manufacturing or distribution or whatever else,

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Kevin Mako: marketing, of course, to then scale that product to the big leagues, but you're going to have a better product.

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Michael Solomon: And I love how you mention not just pain points, but opportunities, because that's one of the biggest pieces of feedback that any hardware startup is going to receive.

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Michael Solomon: It's what are all the alternative uses or maybe features that would create a home run out of your product that you just didn't see until you had real users all around the world trying your product and then giving you that real time feedback.

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Michael Solomon: The other thing is it's also very easy when you only have a couple hundred customers to get feedback. First of all, it's free.

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Michael Solomon: Second of all, you could probably personally as the owner of that product or the manager of that product, you could reach out to every single one of them and you'd get a number of them, probably half of them, that'll actually give you. you feedback one way or another, either via email or phone or whatever else.

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Michael Solomon: So you have this tremendous opportunity to just start small, start lean, learn from your customer, and then really scale it from there. And I also like how you say that it should always be in beta because that product, that life cycle of that circle should never end.

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Michael Solomon: For 100 years, never end. As you get that maybe that bigger run to market, you do that process again every year or two to figure out what you're going to do for your next version of the product or a pro version

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Michael Solomon: or even a cheaper version or possibly accessory products or even just something related to it that you didn't know about until getting that feedback from your customers. So it's a never-ending, let's say, let's call it agile if you want to, you know, again,

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Michael Solomon: leading from your software example, but if you wanted to take something and think of agile development in software, where you're essentially perpetually developing that and having a never-ending continual feedback loop to make an incredible product brand community and all the rest.

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Michael Solomon: Exactly. That's so crucial. And ironically, you know, So we usually think that B2C on business to consumer companies are kind of are more advanced in terms of their understanding of the consumer. But ironically,

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Michael Solomon: in a lot of B2B or business to business applications, that's where you see this, this has been going on for years. So,

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Michael Solomon: for example, some data I saw, let's say from the chemical industrial chemical industry, they estimate that something like 70% of the ideas for new products in that industry

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Michael Solomon: were suggested by the customers of the chemical companies.

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Michael Solomon: And, you know, in the same, I think similar proportions for, let's say, the aviation

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Kevin Mako: industry, you know,

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Kevin Mako: these, because you're dealing with the people who know your product up and down and maybe the competing products as well, and they're in the best position to say something. And so, yeah, but I just, I didn't want to react to something you said before if I,

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Kevin Mako: if I could about starting out by recognizing the problem in your own life.

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Michael Solomon: The exception to that is, and that often is very good place to start. But the problem that we have very often is

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Michael Solomon: that marketers tend to assume that they have the kind of customer they want to have rather than the customer they actually have.

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Michael Solomon: And so what we see is, and there's actually research that supports this, brand managers tend to assume, you know, if you think about your managing X brand, whether it's your own or you work for a big company,

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Michael Solomon: and you ask people, who is the, who is the core customer for this? Who uses this? People often tend to assume it's a clone of themselves. So they kind of see themselves there. But the reality is that there's lots of

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Michael Solomon: products out there that you may not have any use for yourself personally, but there could be a huge market for it. So rather than just assuming that you have an insight into what people

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Michael Solomon: are going to want, because after all, you know what you want, and everybody's pretty much like you, you know, not true, not true. So, you know, don't take for granted that your own insights

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Michael Solomon: are going to trump your actual observations from people out there who are using the product. Well, and that comes back to your, you know, test and refine, right? Think of your product as a beta test. And that's where you go out with a few units.

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Kevin Mako: Test your theory or, you know, do whatever way you want to, whether it's A-B testing or consumer research groups or, you know, just getting prototypes into folks' hands or doing short production runs, one way or another, test your theory. Yeah.

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Michael Solomon: And then either, you know, scale up, scale down, or change. Exactly. And to me, one of the big ironies in marketing is that it's almost bad to succeed with a product because then you let you stop. You know, you say, okay, I did

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Michael Solomon: it. Check that box. You rest on your laurels. And before you know, it's someone else has eaten your lunch because they found a better way to, you know, not just a better way

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Michael Solomon: to do what you're doing, but a better solution to the product. So one example I actually use in one of my textbooks is I guess I guess you would say it's a hard.

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Michael Solomon: example. It has to do with a with a drill, an electric drill. Does that count? For sure. Okay.

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Michael Solomon: So you know, you might say that, you know, that we have an expression. There's an old cliche in marketing. Companies make a three-quarter-inch drill bit, but a customer buys a three-quarter inch hole.

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Kevin Mako: And so the reason I like that example is you can have the best drill bit, you know, Maybe it's better than the other guy's drill bit for some reason. It's more durable or something. But now Kevin comes along and he's thought of the idea of, you know,

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Kevin Mako: what if we use a laser to drill that hole? It's cleaner and it doesn't require any effort, et cetera.

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Kevin Mako: So no matter how good my drill bit is, if you come along with a different solution that provides the same benefit, you know, I can keep innovating drill bits for the rest of my life. I'm never going to succeed. So again, start with the benefit.

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Kevin Mako: that people are looking for, not the attributes of the product, because there's a lot of different ways to get the same benefit. Yeah, love that.

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Michael Solomon: So can you just break down for us the four piece and any kind of notes around those so that we can understand kind of what they are and then any feedback that you have from your experience around them? Well, sure.

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Michael Solomon: It's been kind of a mnemonic, frankly, for teaching students for many, many years because it's easy to remember and all that.

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Michael Solomon: You know, again, we can get into the weeds on whether there's only four P's or whether there's eight P's and all that. But the point is that you want to position your offering in the marketplace.

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Michael Solomon: It's always relative to what else is out there, right? So it's not just your brand. It's how do people see your brand relative to what else is out there?

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Michael Solomon: you can you can do this you know you're you're you can do this at home you can just create a little grid where you know you might think of let's say the two most important uh features of your

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Michael Solomon: product and see if you can plot all of the different competitors on there that's how sometimes you provide you identify marketing opportunities because maybe there's a sweet spot where nobody

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Michael Solomon: is is there right now you know and i actually think that's a great exercise um doing the 4 p grid and plotting your product. And I like how you mentioned one or two key features because it's a big thing we talk about on the show is feature creep. Let's bring it down, focus.

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Michael Solomon: And what's the one or the two amazing things that you're changing? You know, you talk about innovation disrupting the industry. You use the laser cutting a whole example, right? So most inventors and product startups, I mean, we want you to be the folks coming up

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Michael Solomon: with that disruptive technology that cuts, you know, gets the solution that they want, which is your three quarter inch hole. but does it in maybe better, more efficient, cleaner, whatever way.

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Michael Solomon: So, Michael, if you can explain, I know a lot of people are on audio, but just help them walk them through that 4P chart so that they could actually run through this exercise at home. Yeah, sure. So, you know, what you're talking,

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Michael Solomon: I like that you said something about feature creep. Let's talk about that in the context of the first P, which is product, most relevant to your audience, obviously.

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Michael Solomon: And, you know, we assume, so obviously, the offering itself is an important part of all of this. If you don't have a product that works, you probably shouldn't be selling it.

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Michael Solomon: But we know that people, you know, as I like to say, people don't buy products because of what they do. They buy them because of what they mean.

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Michael Solomon: And that's something that a lot of product marketers lose sight of. So when people are buying the product, they're buying a package of a bunch of. of things, only one of which is a physical, even if there is a physical product, in some

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Michael Solomon: cases there isn't, if it's, say, a service like, like, say, an interior design service that might use hardware products.

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Michael Solomon: Feature creep, what that means is that over the years,

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Michael Solomon: a lot of people have assumed that the way they're going to differentiate themselves is by adding more features,

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Michael Solomon: and that somehow more features equals better. And ironically, from a consumer psychology perspective,

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Michael Solomon: the exact opposite is true. What we find is that we like, everybody likes to feel that they have choices up to a point.

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Michael Solomon: But after you reach that saturation point, what we find is that when people are given too many choices,

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Michael Solomon: they just, they often just throw up their hands and say, I can't, this is too much for me to process. and frankly, I'm not that interested in how many brands and drills there are. So I'm not going to buy anything or I'm just going to buy the one I saw first or something.

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Michael Solomon: And so what we see is that that in some cases, like an automotive, for example, I think some companies like Toyota, you know, at one point, if you're going to buy the car, you could literally customize it with hundreds of different, you know,

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Michael Solomon: you configure it in hundreds of different ways. A lot of people just found out to be too daunting. they've simplified it. They've brought it back down so that, yes, you have some choices,

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Michael Solomon: but you don't have every possible choice in the universe because we don't actually want that. Our brains are not able to process that information.

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Michael Solomon: And so we actually make poor choices, the more choices that we have. Very interesting. Yeah. Yeah. So that's, but that's,

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Kevin Mako: you know, product obviously is, is the first P, I guess. You know, know, then you've got your other decisions to make. So place means basically distribution. Where are people going to obtain the product?

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Kevin Mako: You know, nowadays, your fundamental decision is online versus offline.

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Kevin Mako: As I talk about in my latest book, that's actually an artificial distinction, because today all products should be both online and offline, because that's where your customers are.

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Kevin Mako: But other decisions there, you know, in terms of distribution, you know, if, and we all know this, if you, you can buy the same product at,

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Kevin Mako: at a low, low end store or a high end store, but you assume

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Michael Solomon: it's nicer if it came from the high end store, you know, and sometimes there are people who save their shopping bags from fancy department stores and put their gifts in those bags to make them look better, right?

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Michael Solomon: So actually, the way you distribute something, where you distribute it, how you distribute it is not just a matter of logistics. It's also a marketing

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Michael Solomon: decision because it becomes part of the image of your product. Where people buy it is part of what they're buying.

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Kevin Mako: So that's your briefly as your place, Pete. What's the next one? Price. We've talked about that a little bit. Again, it's not just a matter. of necessarily of saying, well, I'm going to, you know, see what my costs are and then mark up

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Michael Solomon: the product by 5%. Often price is a strategic, is a tool or a tactical tool that we use to make a statement about what people are buying. So for example, you know, we, your listeners all know

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Michael Solomon: the basic law of supplying demand. Generally, you lower the price, you raise, you increase demand, right? Not always the case. And so, for example, with high-end jewelry and so on,

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Michael Solomon: at least anecdotally, I've been told that you might have a bracelet sitting in your store for I'm making up the numbers, $100. It doesn't sell. It doesn't sell. So you're tempted to cut the

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Michael Solomon: price to $70. But it turns out if you instead change the price to $170, you sell more. Why is that?

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Michael Solomon: Because people assume in that category, all things equal, if it's a higher price, it must be better quality. And we've talked about this a bunch on the show, especially because most of our listeners

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Michael Solomon: are working on something that is innovative, proprietary, solves a pain point. So the last thing you want to do is sell yourself short when you're now creating extra value in the market. And not only because of the fact that, you know,

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Michael Solomon: in theory, because you've created an improved value product, you're worth more, but you're talking about it from a marketing perspective, the psychology perspective from the buyer where they will actually potentially

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Michael Solomon: want it more simply because you're pricing it at a premium price, which of course leads to something we also talk about regular on the show, which is really important to any startup, and that's margins. So the higher the price, the better the margins, of course. So why wouldn't you at least start at

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Michael Solomon: that point? Something else that we've also mentioned a few times, so it's really important to bring home is that you can easily reduce your price. It is almost impossible to increase your price. That's true.

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Michael Solomon: That's true. But this is another great example of putting the cart before the horse.

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Kevin Mako: So first you've got to decide what kind of image you want for your brand. Do you want it to be a premium brand?

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Kevin Mako: Not all new brands have to be premium brands. For sure. If they're not, and if as you say, their margin is much lower, how are they going to make the money? Well, obviously, it's volume.

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Kevin Mako: So if it's a volume play, your pricing decision may be quite different, even though it's the exact same product. So again, it's related to your strategic objectives, not to just what feels.

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Kevin Mako: good about the price. Right. It all comes back to that strategy and your goals, right, which is all stemming down from, you know, the value you've created or the innovation, you know, the need, essentially that you've created. So that leads us to our final P, which I believe is promotion,

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Kevin Mako: if I remember, right? Okay.

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Kevin Mako: My personal favorite P, because it has to do with, with communications and communicating and letting people know about your value proposition.

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Kevin Mako: Because you can have the best product in the world. And this is really true, I think, for startups, you know, you may genuinely

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Kevin Mako: have a superior solution, but if nobody knows about it or nobody believes you, you might as well

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Michael Solomon: not bother. So the fourth P of promotion means how do we communicate what's in our minds, which is, I have a solution that is awesome. How do I get that into your head? You know, I'm not Mr.

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Michael Solomon: Spock from Star Trek, I can't just do a mind mel where I put my thoughts into your head, I need to choose what media I'm going to use. I need, you know, who says the message is often

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Michael Solomon: as important as what the message says,

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Michael Solomon: where we see it, what kind of medium, what kind of symbolism, even what kind of colors that we use. So to give you an example in hardware, I know you're familiar with DeWalt.

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Michael Solomon: And, you know, what was their big innovation? Well, I'm not a product

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Kevin Mako: expert on hardware, but the color that they chose for their products, that bright yellow, what does that do? Well,

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Michael Solomon: they're using an element of packaging to create, presumably in service of some longer-term goal to differentiate their product, maybe make it more like a consumer-friendly

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Michael Solomon: product because it's not black, it's yellow, what have you. I wasn't involved in that decision, so I don't know. But there's a great example where a hardware, you know, a toolmaker has been

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Michael Solomon: successful. I'm not saying it's the only reason, but they deliberately, I assume, chose that color as a way to make a statement and to stand out on the shelf. So that's a tactical decision,

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Michael Solomon: not a strategic one, but it's probably made in the service of a strategy.

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Michael Solomon: Full circle to what you said early on in this discussion, which is, you know, eventually if you market well enough that that you don't need to, you don't need to sell anymore. The

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Michael Solomon: product essentially sells itself. And that's something if you look at that example with DeWalt, it's iconic now. Those colors are iconic. You can just look from 100 feet within the store and know

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Michael Solomon: that that shelf is full of DeWalt tools. And you have a certain, you know, frame of reference to that in terms of quality and whatnot that they've developed over the years, a very conscious marketing decision that they made to keep it simple, but to, you know,

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Michael Solomon: position their product in a certain way. So, you know, now that we're looking at these four P's, the key is that you can at home, you can do this exercise with your own product, starting, I think, as you mentioned, I actually like this,

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Michael Solomon: Michael, because I think this is a unique way to position this exercise. Don't focus on your product, focus on the one feature that you have, or one or two. I mean, do maybe even do this separately for your two features. So don't say my widget ABC, but say my widgets solves this

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Michael Solomon: problem. Now, where in price, place, promotion, and product, where are the other competitors or alternative products in the market and how can you beat them? And that will really position you well to

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Michael Solomon: say, you know what, I've got a winning ticket here or, you know, this space looks crowded. Yeah. And that, you know, just that simple exercise, Kevin, you're right. I mean, it's,

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Michael Solomon: it's not just an academic thing, you know, when you see, when you plot things visually, I feel you can often see things much more clearly. So for example, back in the 70s, again, I wasn't involved in this,

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Michael Solomon: but my understanding is that Budweiser did an analysis like this. It's called a perceptual map.

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Michael Solomon: And when they did this, this is what helped them to recognize that there was an untapped market, and that's for low-calorie beer.

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Michael Solomon: And Bud Light was introduced as a result of an exercise just like this, pretty much. Wow, powerful. a little more sophisticated, but the basic idea, just identify, you know, who does what you do

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Michael Solomon: and who doesn't do what you do, et cetera. You know, that can be really, really groundbreaking, I think. And Michael, your new book, it really, it brings a lot of these principles, but referring

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Michael Solomon: to, you know, what's happening in modern days with modern marketing now. Can you talk a bit about that? Yeah, absolutely. So my new book is called The New Chameleons. And I chose that metaphor.

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Michael Solomon: because, you know, as you know, a chameleon changes its colors in response to external changes, you know, temperature, et cetera.

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Michael Solomon: And we, consumers today, many of us, especially younger ones, but many of us are like chameleons. We don't change our color, but we change our identities.

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Michael Solomon: We change who we are throughout the course of the day. We're constantly trying new things.

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Michael Solomon: And our culture, both the technology and the way our society is evolving and fragmenting and splitting into all kinds of different subgroups and so on,

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Michael Solomon: makes it much more difficult to do the traditional market segmentation that was actually pioneered by General Motors back in the early part of the last century

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Michael Solomon: when they created divisions like Buick and Oldsmobile and Cadillac for people with different incomes.

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Michael Solomon: Today, we, you know, and so many, many companies jumped on the bandwagon and it worked quite well on the 50s and 60s because we were a largely homogeneous society

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Michael Solomon: and we only had three, maybe four television stations. I'm sure Canada was quite similar.

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Michael Solomon: So everybody was pretty much exposed to the same stuff and used the same products. Now, you fast forward to today,

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Michael Solomon: totally out the window. We have a very fragmented society. you know, there's thousands of cable TV stations on with catering to all kinds of obscure tastes

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Michael Solomon: and so on. So these traditional, this notion that we put people into a broad category, like let's say women in their 30s or something, and think we understand them and that all women in their 30s

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Michael Solomon: are similar, that's an assumption that can be very dangerous today. So when I talk in the book about the new chameleons and the subtitle is how to connect with consumers who defy categorization,

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Michael Solomon: what we see is that a lot of people today are defying that. That is, they don't want to be part of the market segment. They're individuals and they're borrowing stuff from all kinds of different places.

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Michael Solomon: You know, I guess a good analogy is just thinking even about what we eat in the modern world today, right? We have all kinds of ethnic, you know, options available that we didn't

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Michael Solomon: have 20 or 30 years ago. Toronto is a city that's, you know, great for, you know, tons of ethnic restaurants, anything you want, you go to these massive buffets, these international buffets,

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Michael Solomon: I don't know if this will happen after COVID, but what you're doing is you're putting on your plate, you know, you're putting Italian food next to Mexican food, next to Chinese food. People are just mixing it all together, and that is the way marketing is working today. So we no longer have

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Michael Solomon: the luxury of just saying, my customer is a woman in her 30s, therefore, you know, I know all about her because let's say I'm a woman in her 30s, if I'm the brand manager. Well, every one of those

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Michael Solomon: customers, you know, if you say to them, and I say this to my students sometimes, I'll say, look, so you're all college students in your 20s living in a certain area, going to a private liberal arts school and city, blah, blah, blah. Therefore, you're all the same, right? You all are,

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Michael Solomon: you know, I don't need to understand your specific case. Now, as you can imagine, they don't like that very much. And they really push back as your customers will.

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Michael Solomon: So what I talk about in the book is some of the basic assumptions that we've made over the years of putting, assigning people

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Kevin Mako: labels and thinking that we understand them and talking about how some of those labels have gone away. So

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Kevin Mako: an example of one that I think is very relevant here is the dichotomy between producers and consumers. You're either a producer of the product or you're a consumer of the product. Well, we already

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Kevin Mako: talked about Lego and co-creation and we know that, you know, today that that distinction is practically meaningless, right? You've got listeners out there who have become taxi drivers. Maybe

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Kevin Mako: they're driving for Lyft on the side. Maybe they're in the hotel business because they rent out their place on Airbnb.

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Kevin Mako: Maybe they sell products, you know, like cosmetics like Mary Kay and Amway, some of those direct selling companies. They be housewives are becoming business people and making millions.

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Kevin Mako: So there's an example of a dichotomy. You know, again, the traditional companies say, I'm the producer, you're the consumer, arms length. But the new, the newer companies, you know, that have this newer perspective say, that's a boundary that doesn't exist

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Kevin Mako: anymore. We want to bring you in to co-create. So there, I go through the book. In each chapter,

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Michael Solomon: I basically talk about one of these really, really basic dichotomies and why we can't use that anymore. So I talk about, for example, male versus female. We have a lot of conversations in our

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Michael Solomon: culture now about what it means to be male. Is there such a thing as male versus female or are people on a continuum, right? Lots of discussion about that. I mentioned another earlier, online versus offline. Which way do I go?

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Michael Solomon: Do I sell online or offline? No, you sell both because your customers are on both at the same time.

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Kevin Mako: You know, when I look at, when I lecture to my students or I'm giving a keynote to an industry group, you know, half of them are sitting there looking at their phones. I used to get offended by that, but now it recognizes they can't. They're addicted to it.

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Kevin Mako: They're always going to be online while I'm talking to them. So they're both online and offline at the same time. And that's what your strategies need to reflect. So anyway, as I go through the book, I talk about a number of these

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Kevin Mako: and why it's so important to abandon these basic things that we take for granted.

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Michael Solomon: And when you do that, that's where new product opportunities tend to arise. So for example,

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Michael Solomon: your listeners might want to think about the, you know, Generally speaking, if they're competing in a category, it's a well-defined category, some kind of hardware, they know who their direct competitors are, et cetera.

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Kevin Mako: So when they innovate, it's likely to be only a small modification to what is already out there in that vertical.

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Kevin Mako: But what happens when we take two different verticals and we say, you know what, let's create a new category that's a hybrid of those two. So, for example, if you look at automotive design,

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Kevin Mako: you've got sedans, right, you've got convertibles and all that. But then you have this brand new thing called a minivan.

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Kevin Mako: And a mini, when you think about when Chrysler introduced a minivan,

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Kevin Mako: that was a, that created a brand new category, right? And then everybody had a, you know, they were the first movers in that market. They had a huge advantage. That market gets saturated. What do we see today? we see SUVs and SUVs and SUV crossovers.

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Kevin Mako: That word crossover tells you that it's a hybrid category.

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Kevin Mako: And it's so powerful these days to look for those opportunities and niches and new markets because when you have this global marketplace, like you said, when the lines are blurring, when there's new categories, when there's different types of individuals

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Kevin Mako: and different types of unique scenarios that are being created, that creates opportunity. And that's an incredibly powerful thing. you can take that opportunity. I think one of our clients go fish.

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Kevin Mako: I think of them and they created an underwater fishing camera.

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Kevin Mako: So you already had GoPro out there and you already had underwater cameras, but they essentially merged the two and created an underwater fishing camera. And it became hugely successful and then they sold and did very well from there.

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Kevin Mako: But it's amazing to see that as this global market emerges, as innovators and inventors listening here, you should be looking for those. gaps, doing your four P's and finding where you're creating a new market or filling a new void

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Kevin Mako: and then really making an incredible business out of that. As you see these gaps that the bigger companies may not have enough attention or like you said, they may be still stuck kind of in some of the older ways. They may not understand some of the some of the dichotomy of what's

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Kevin Mako: happening moving forward. You can. So you can be the one to take advantage of that before they do. Right. And that's what's so powerful here. I think that's a really crude.

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Kevin Mako: observation for startups because, you know, it is like turning a battleship, you know, for these big companies to innovate sometimes.

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Kevin Mako: But often, you know, if you're, if you're just going, if you're just going head to head with the biggest guy out there, well, that's, that's pretty tough. But if you're in a place that no one has found yet, you know, I like, you know,

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Kevin Mako: there's an expression I kind of like it. In the land of the blind, the one-eyed man is king.

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Kevin Mako: So when you think about that, you know, you don't have to be the dominant figure in an industry, but you could be the dominant figure in a niche where no one else is there, at least yet.

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Kevin Mako: And like you said, too, it can just be a small improvement or alteration that has a need for it. It has a market that hasn't yet been tapped. It doesn't need to be a completely revolutionary new entire product with a ton of feature creep.

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Kevin Mako: It could be just one simple improvement, one isolated feature that really solves that pain point, And coming back to the thing you said is first and foremost, right? Like, make sure you're solving a need and then develop your strategy and your four piece from there. Well, Michael, it's been great to have you on the show.

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Kevin Mako: Where can people buy the book if they want to read it? Well, the book's available on Amazon and all the other book selling sites. It's just, it's called The New Chameleons.

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Kevin Mako: And, you know, if anyone wants to reach out to me, my website is just michael Solomon.com. and my email predictably is Michael at Michael Solomon.com. Great. Well, thanks again for being on the show. Thanks for having you. It was fun.

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Narrator: Thanks for tuning in to this episode of the Product Startup Podcast, the show that teaches you what it really takes to bring your product to market and turn it into a big success.

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Narrator: This podcast series is brought to you by Mako Design + Invent, the original and leading firm in North America to provide global caliber in-to-in physical,

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Narrator: consumer product development to startups, inventors, and small product business clients. If you're looking for product development help on your invention, head over to Mako

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Narrator: design.com. That's ma-k-o-design.com for a free consultation from one of Mako-designs for design studios from coast to coast. Thanks for listening and see you next time.