Thursday, August 30, 2007

Direct Response TV Marketing

I wrote a post in July about the launch of Heaven Fresh infomercial.  After a trial run for about 2 weeks, we came to the harsh realization that the chances of running a successful direct response TV campaign are not any better than winning a multi million dollar jackpot.  Well, may be slightly better. The sales produced during the trial run on Shop TV Canada were way below our expectations.  We joined our heads together to analyze the results and the reasons for the lack of desired response.  We recognized that we needed to fix our ridiculously high  expectations before anything else.  Then we have to prepare  for a long and expensive learning curve.  

Direct response TV marketing is a multi-billion dollar business.  But broadcasting a successful TV infomercial campaign means that, along with the stars,  countless factors have to be perfectly aligned.  An infomercial is generally considered successful if the Media Efficiency Ratio (MER) is 1:2, which means that every dollar spent on buying the media should produce 2 dollars in sale. If an infomercial does not achieve the desired MER then one of the following need to be considered.

  1. The media is too expensive.
  2. The frequency of the broadcast is not high enough.
  3. The TV channels is not reaching the right audience.
  4. The time slots picked are not the right ones.
  5. The particular time of the year is not the right one.

For a micro-multinational like Heaven Fresh, experimenting with the broadcast frequency, time slots and TV channels can be an expensive proposition. If none of the above work then the next thing would be to try different versions of the production with the "right" combination of the following: 

  1. A different price level.
  2. A unique offer to convey value proposition.
  3. A stronger call-to-action (CTA) to create a sense of urgency in audiences' mind.
  4. A more engaging script to convey the "key information".
  5. A different host to create a sense of trust and a bond with the viewers.
  6.  More appealing graphics and visual creativity

There can be various permutations of all the above factors. As both the media and the production process are expensive undertakings, a small company can run out of budget long before finding the "magic combination". 

Anyone involved in direct response TV marketing knows that not all the products can be sold on TV and hopefully that can be determined in the very early stages. We are very much confident that Heaven Fresh air purifier is the perfect product to be sold on TV and it's just a matter of time before we find the winning combination of all the factors mentioned above to make our infomercial a phenomenal success.

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Monday, August 20, 2007

Writing "Heaven Fresh" in Chinese

One of the criteria for a multi-national organization is that it should be able to conduct its business in various languages. As of today, Heaven Fresh web sites and marketing materials are being produced in English (US & UK), French, German and Arabic. Although the words "Heaven Fresh" do not mean anything to a person who does not understand English, they can still be read by someone who can read Latin alphabets based scripts e.g. French and German. For the languages that use Arabic script, Heaven Fresh is  simply  spelled out the  ھیون فریش (phonetically sounds Heaven Fresh).  Therefore, an Arabic speaking person will read "Heaven Fresh" but will have to get some help to figure out what language these words come from and what do that actually mean.  As part of our initiative to start Heaven Fresh branch in China, the very first thing that we need to do is to translate our brand name into Chinese.  Since Chinese language does not use alphabets, the words "Heaven Fresh" cannot be spelled out in Chinese as it is. One of our options is to change our name using the literal meaning of "Heaven" and "Fresh" in Chinese. The 2nd choice is to use the Chinese symbols/characters that will phonetically sound like "Heaven Fresh" but they will not necessarily have anything to do with "Heaven" and "Fresh". Few examples of the famous brand names translations into Chinese are as follows:

Table 1:

English Name Chinese Name Meaning of Chinese Name
Nike 耐克
(Nài Kè)
耐(Nài) = durable;can stand wear and tear
克(Kè) = defeat;overcome
Yahoo 雅虎
(Yǎ Hǔ)
雅(Yǎ) = fine;refined;elegant
虎(Hǔ) = tiger
Google 谷歌
(Gǔ Gē )
谷(Gǔ) = valley;mountain
歌(Gē) = song;sing
Pepsi-Cola 百事可乐
(Bǎi  Shì Kě Lè)
百(Bǎi) = one hundred
事(Shì) = matter;thing
可(Kě) = may;should
乐(Lè) = happiness;happy
Disney 迪士尼
(Dí Shì Ní)
迪(Dí ) = enlighten
士(Shì) = soldier
尼(Ní) =very intimate
Reebok 锐步
(Ruì Bù)
锐(Ruì) = sharp;hard-hitting
步(Bù) = step;walk
Subway 赛百味
(Sài Bǎi Wèi)
赛(Sài) = compete
百(Bǎi) = one hundred
味(Wèi) = taste
McDonald's 麦当劳
(Mài Dāng Láo)
麦(Mài) = wheat
当(Dāng) = equal;turn towards
劳(Láo) = work hard
Sony 索尼
(Suǒ Ní)
索(Suǒ) = Search
尼(Ní) = very intimate

Table 2:

English Name Chinese Name Meaning of Chinese Name
Volkswagen
(people's car)
大众
(Dà Zhòng)
大(Dà) 众( Zhòng) = people
Burger King 汉堡王
(Hàn Bǎo Wáng)
汉堡(Hàn Bǎo)= hamburger
 王(Wáng) = king
Microsoft 微软
(Wēi Ruǎn)
微(Wēi) = minute;tiny
软(Ruǎn) = soft;flexible
Apple 苹果
(Píng Guǒ)
苹果(Píng Guǒ) = apple

Table 3:

English Name Chinese Name Meaning of Chinese Name
Honda 本田
(Běn Tián)
Common characters in both Japanese & Chinese
Toyota 丰田
(Fēng Tián)
Common Characters in both Japanese & Chinese
Fuji 富士
(Fù Shì)
Common Characters in both Japanese & Chinese

All the companies mentioned in Table 1 went for Chinese name that sounded like their original name.  In many cases there are several different characters that can have the desired sound so there is room to be creative in picking the characters to have some related meanings as well. My favorite translation is for Nike. Not only that is sounds the closest but also conveys a perfect  image of the  Nike shoes and apparel.

Table 2 lists the companies that have a Chinese name which does not sound like their original name at all but a direct translation of the English words.

Table 3 lists the Japanese brand names that are actually Japanese family names.  Chinese and Japanese written scripts share a large number of symbols, however they they can be pronounced completely differently in both languages.  For example, the written Japanese characters for "Honda" (本田) are also used in Chinese script, but they are pronounced "Běn Tián".  Therefore, the Japanese companies seem to be able to avoid the process of translating their name into Chinese but instead use the symbols as it is as long as they are recognizable to a Chinese.

Now for Heaven Fresh we can either go for similar sounding words or literal translation of the words "Heaven" and "Fresh". For example, 合万福世 is pronounced in Chinese as hé wàn fú shì. (Did not really sound much like "Heaven Fresh" to me at first but when read quickly by a Chinese friend, it does the job). 

合(hé) = Combine
万(wàn) = One Thousand
福(fú) = Blessings
世(shì)=Lifetime/world

Read together, it will mean "Combine 1000 blessings for lifetime/world"

If Heaven Fresh is translated literally,  it will simply be read as:

天堂清新 (tiān táng qīng xīn) = Heaven Fresh 

If you can read and write Chinese and have a better idea for naming "Heaven Fresh", I will be happy to hear from you. After going through this name translation exercise, my sixth sense is telling me that we need to be ultra prepared if we are to run a successful Heaven Fresh branch in China.

Sunday, August 12, 2007

Doing Business in the Middle East

It was a relief to find out that our product shipment in Saudi Arabia will be released tomorrow. Our latest container to Saudi Arabian office has been held by the Saudi Customs for almost a month now.  We started selling the Heaven Fresh products in Saudi Arabia over two years ago and it has been a roller coaster ride since then.

Besides holding 25% of the world's oil reserves and being the largest oil producer,  Saudi Arabia also hosts more than 5 million pilgrims every year who are visiting the Muslim holy cities,  Mecca and Medina.  Disposable income from oil wealth and  millions of travelers makes Saudi Arabia one of the most lucrative markets in the Middle East for all kinds of products.  However, getting started in this potentially rewarding market is not exactly a child's play, especially for a micr0-multinational like Heaven Fresh with very limited ability to sustain any heavy financial mishaps.  The key to Heaven Fresh's success was a trusted local partner who understood the mind set of the consumers and had the capacity to market and distribute the products.  Although, we met with early success in terms of sales and distribution network setup, we ended up losing money because of unfulfilled financial commitments from our initial partnerships.   

We learned our lessons early enough to do the damage control and changed the business strategy to minimize our risk factors.  Although our sales have been growing steadily for past two years, the official red tape gets quite frustrating at times.  For example, every time our shipment reaches the port of Jeddah, Saudi Arabia, we come to know a new set of rules to get it released from the customs. Until now it has been a challenge and a great learning experience for us to do business in Saudi Arabia. We are hoping that some day our daring initiative will payoff in a big way.  Until then, we are ready for our next test in the Middle East's richest country.

Saturday, August 11, 2007

P R Campaigns for Heaven Fresh

Most large companies have dedicated PR departments that handle variety of  public relation campaigns.  The object of a targeted PR campaign could be anything from  reducing the negative impact of a corporate crisis to building the brand awareness and creating demand for products and services.

We ran a test PR project for Heaven Fresh in Canada a few months ago.  The purpose was to see the immediate impact on the company sales as well as to compare the cost effectiveness of a PR campaign against traditional advertisements.  The campaign turned out to be quite successful as Heaven Fresh products received a very decent coverage in the national media.  As a result, we saw a clear spike in the sales of the products that were mentioned in the media. We reached a niche group of potential customers via PR that we could have targeted otherwise.  However, the biggest benefit of PR, in my opinion, can only be realized in the long run by publicizing the Heaven Fresh brand, thus creating a demand for the company products and eventually being able to increase the profit margins from the sales. Therefore, I believe that PR has to be an integral part of the long term business growth and the marketing plan for Heaven Fresh.

Heaven Fresh test PR campaign was managed by Celia Love of Belessington Love & Associates. The credit of the successful campaign goes to Celia's competence, knowledge, relationships in media and years of experience in the PR industry.  While I have no doubt in my mind that we should push ahead our PR efforts with full scale for all of our  international offices, the reality is that hiring PR professionals and firms can be an expensive undertaking for a micr0-multinational like Heaven Fresh.  There is no denying that the cash spent on PR will be worthwhile in the long run for the company but it is more desirable for us to spend limited amount of capital available on activities that bring in the sales immediately thus helping the cash crunch of the company.

 Being a micr0-multinational with limited amount of money to spend on marketing activities, the company needs a cost effective way of doing robust PR campaigns.  We are working with Blessington Love & Associates to develop such a strategy.  If you have any ideas about running a cost effective global PR campaign in various languages and countries, I will be very interested in discussing the topic in greater detail.

Saturday, August 4, 2007

Startup Company and Operating Capital

Cash burn rate is an extremely important consideration for a startup and a micro-multinational company like Heaven Fresh.  I witnessed when Auvo Technologies, one of the startup companies that I worked for,  spent about 4.5 million dollars  in  just one year and a  half and then closed its door because of the lack of operating capital.  When I look back and analyze that how could Auvo spend so much cash in such a short time, one thing that stands out the most is that the company hired expensive full time people for the activities which were important but not vital for an early stage company.  Both the founders of Auvo Technologies were experienced, competent and intelligent Motorola veterans.  They must be in their "Motorola frame of mind"  for them to hire all these trusted and high profile peers from Motorola at such an early stage of Auvo Technologies.  They must have missed a very simple difference that Motorola is a multi-billion dollar company that earns its cash from sales of products and services while Auvo was dependent on Venture Capitalists for the supply of operating capital.  I have great respect for the founders of Auvo for making personal sacrifices to stretch the dollars in the company's account. They had an exceptional management track record  but,  in my opinion,  they did not have the guts to let their "friends" go.  For the success of a startup, an entrepreneur must be able to realize the limitations of the business and must be able to make difficult decisions and not let every body drown in an attempt to save them all. I do not know for sure but the rumor was that founders were forced by the investors to fire all the "non essential" staff. Unfortunately, year 2001 was not the best time to get the VC funding and the move to lay people off came a little too late to save the company.  Just two weeks later the entire engineering team (including me) was also packing its bags to look for jobs somewhere else.

It was the time right after dot com bust and was very difficult to find a technology job with an abundance of laid off technology workers in the US.  However, I was very lucky (or may be very good:) to start my next job at Kirusa Inc without sitting idle even one day.  Kirusa was another startup company and faced the similar challenges as Auvo did for managing the working capital.  Working for Kirusa was a Deja Vu for me in terms of company's financial struggles.  The only difference was that it was the 2nd startup of the co-founder and CEO of Kirusa, Dr. Inderpal Singh Mumick.  Few months into my job at Kirusa that I saw people leaving the company one after another. I cannot say for sure whether they were let go or the circumstances were created for them to leave but it was a very tense and demoralizing scene to see our co-workers/friends leave the company. In a technology startup company, engineering team is the last to leave. Given that I was the only one left working on my project that had brought some money to the company, I felt quite confident that my job was secure as long as there was money in the company's account. But having seen my previous employer close its door due to lack of funds made be believe that it was inevitable for Kirusa as well. Burned out from working 80+ hours a week for both the startup companies and coupled with the tense environment at the time, I decided to quit my job at Kirusa before it went down like Auvo.

I left Kirusa in April of 2003 and the company got several million dollars in funding in 2007, four years after I left.  Thinking back of my time at Kirusa, if it was difficult for me to see people go then it must be heart breaking for Inderpal as well to let people go or see them quit the company.  But I realize it now that he was preparing for the difficult times to come. Scaling downed the company to reduce the cash burn rate and going into hibernation mode was probably the only option to keep it going until the atmosphere was the suitable to get further funding from the VCs. Kirusa not only survived the downtime but is also thriving now. In my opinion, if the cash burn rate was not managed at Kirusa it would have met the same fate that Auvo did.  

By the way, I just checked the Kirusa web site (http://www.kirusa.com) and the first thing that caught my eye was the press release about the issued patent of "A Technique for Synchronizing Visual and Voice Browsers to Enable Multi-Modal Browsing".  I filed that patent in February of 2003 while working at Kirusa. For those of you who want to study the patent can do so at the Unit States Patent office web site (http://www.uspto.gov). The patent number is 7,210,098 and my name can be seen listed under the "Inventor Name" on the patent.