You are viewing this article in the AnnArbor.com archives. For the latest breaking news and updates in Ann Arbor and the surrounding area, see MLive.com/ann-arbor
Posted on Thu, Jul 22, 2010 : 5:44 a.m.

CEOs of Eden Foods, Poof-Slinky share advice in tough market

By Joe Marr

In this economy many industries find themselves in a more complex sales environment. There are more players involved in the process of describing and defining the scope and requirements of the sales opportunity.

Buying authority, in many instances, has been shifted “upstairs” in the organization where there are more players influencing the buying decision. Expenditures are being scrutinized more carefully by more people. And, delivery requirements are often more stringent.

In this more challenging market, the possibility for something to be overlooked and potential sales to be derailed or lost are greater than ever. A firm’s ability to focus—and remain focused—is critical. Ultimate success for a company depends on their ability to maintain a steady vision of their position and strengths in the market and their customers’ needs, and not let their sales team be distracted by “opportunities” that are outside of their company’s core strengths that they would never otherwise consider at times when they are booming.

Michael Potter with Eden Foods.jpg

Eden Foods CEO Michael Potter

Michael Potter, CEO of Eden Foods, a natural and organic foods market leader, finds his business in a squeeze between two opposing forces.

“We have benefited and have actually helped create the well-established trend with consumers toward knowing more about the food they eat and striving to eat healthier. The opposing force is that the economy has led consumers to become more price sensitive, and healthier foods tend to have a higher price tag.”

And while his business is faring well despite this clash, up 20 percent year over year, Potter is determined to take more control of Eden’s destiny by putting more “boots on the ground” to proactively gain more shelf presence and fend off “natural food imposters” that the food conglomerates are putting on the shelf to help fill the demand for healthy food products.

“Getting more and more prominent placement on the shelf for us really comes down to strengthening and deepening our relationships with the retailers, and so we have to be face-to-face with them to do that.”

Know your consumer A company’s success also depends on their ability to accurately discern the consumer’s perspective, and then, match the consumer’s wants and needs with products that satisfy that demand. Just taking actions that have always worked before may not stimulate the same response from consumers that it has in the past, so companies have to keep their fingers on the pulse of consumers, and attempt to harness the movements already under way to get the most out of a strategy or marketing investment.

Meanwhile, Poof-Slinky’s CEO Ray Dallavecchia leads a conservative approach in every market situation.

The leading Plymouth toy manufacturer of foam “Poof®” toys, the iconic “Slinky®” toys and “Ideal®” games is still bringing joy in this tough market. Despite the erosion in the number of smaller regional and independent toy stores, they have succeeded in resuming growth in revenue in 2010 after a flat 2009.

“We are very conservative in our management style; watching inventory levels, prudent in any changes we make, and being in a fairly recession-proof business, we aren’t prone to overreact with big changes in the economy. We exploit market opportunities. For example, the latest “Toy Story” film will feature our “Slinky® Dog” and our marketing efforts leverage and capitalize on the demand that the film will create.

"The biggest challenges we have endured have been the softer economy and regulation in the toy industry. While we are encouraged by some signs that there is a turnaround in consumer spending, Congress has made our job more difficult by imposing new tougher CIPSA testing standards for toy product, which require us to increase the prices of our products.

"We have always been totally committed to toy safety as a company and will continue.”

Work your channels In less complicated times, many companies have been able to succeed by virtue of their brand strength or the merits of their products alone.

But today, companies find it necessary to communicate with their channels of distribution and retailing in a number of ways—face-to-face meetings, e-mails, phone calls and group presentations—and they can no longer rely solely on the strength of their products on the retail shelf.

Companies must take the time to understand their consumers and what compels them to buy, as well as what compels their distribution channels and retailers to feature and best position their products. Once they have a deep understanding of everyone in the supply chain down to the consumer, they must be effective in communicating their value at every link in the chain in order to optimize sales overall.

And careful analysis and a deep understanding of their chain is worth little if a company isn’t leveraging this information to compel more effort down the chain to the consumer.

Evolving roles, effort and advice of CEO’s in a tough market Eden’s Potter hasn’t had to work any more time to deal with the changes in this economy, but has reoriented his effort to more hands-on involvement in company expenditures, and closer involvement in the sales strategy and tactics of the company. He advises that the best way to secure and optimize sales in this market is to continually build and maintain relationships with everyone in your company and supply chain from your own operations and marketing staff to every link in your supply chain and to the consumer.

Poof-Slinky’s Dallavecchia has had to increase his hours about 15 percent to keep up with the challenges in this market, in pretty much the same roles he has mastered as CEO. Dallavecchia advises that companies must do everything to be well capitalized going into this kind of market.

Comments

Dan Lanuti

Fri, Jul 23, 2010 : 1:33 p.m.

Great article, Joe. It's interesting Eden's Potter was able to get through the tough times by not putting in more hours, as was the case with Poof-Slinky's Dallavechia. He did so through re-setting priorities on sales and cost reduction. A great strategy for his company and a balanced life for him.