Great Ideas for your Small Business:
Launch New Products with a Media Blitz
Avi sivan, a former israeli commando and stuntman, gives new meaning to the expression “media blitz.” Through an aggressive and expensive combination of magazine advertising, infomercials, and direct mail, Sivan has created a marketing machine for his personal care products sold under the “IGIA” brand.
His company is called Tactica International. “His simultaneous multimedia push is unusual,” said John Kogler, founder of Jordan Whitney Inc., which monitors the billion-dollar-plus infomercial industry. “I think it’s unique.”
Kogler’s Tustin, California–based firm publishes several direct response television reports and newsletters. In the fall of 1997, IGIA’s hair removal system ranked among the top ten on Jordan Whitney’s list of top fifteen direct response ads. IGIA’s blemish remover ranked eleventh on the same list.
Kogler said Sivan takes advantage of the fact that the infomercial industry “has become a lot more dependent on retail to sell a variety of consumer products.” Many consumers who are reluctant to give their credit card numbers over the phone may want a product they’ve seen demonstrated on TV, but prefer to buy it in a store. “A product that gets into stores because of TV will sell six to ten times as much in the retail stores as it does on TV,” explained Kogler.
Although Tactica International Inc.’s intense marketing campaigns drive sales, they also created customer service problems, including late deliveries and slow refunds. One Christmas, the Manhattan-based company fell way behind on deliveries, prompting consumers to file hundreds of complaints.
Sivan said every complaint was taken care of, and every- one whose “Active Air Advanced Beauty System” was delayed was sent $20 worth of face cream free as an apology. “We looked at it as good trouble,” said Sivan. “We were over- whelmed with orders for that product.”
Sivan, an intense entrepreneur, said he learned how to market personal care products to women when he worked for EPI Products USA, the ill-fated Santa Monica–based company that grew to $200 million in sales before it filed for bankruptcy in 1990 amid lawsuits and other legal troubles. Epilady, a hair removal product invented on a kibbutz in Israel, was infamous for painfully removing hair, but it still sold by the thousands. After working for EPI Products and watching it grow, prosper, and collapse, Sivan said, “I knew there was a huge opportunity because the market for hair removal products is enormous.”
Determined to learn from Epilady’s mistakes, Sivan found a British inventor who developed a less painful tweezing method. The IGIA hair removal system sells for $120. “It’s a huge success in the department stores,” said Orly Zoran, who worked with Sivan at EPI Products and handles sales and marketing for IGIA products.
Zoran, who specializes in launching and marketing new consumer products, said thousands of beauty magazine ads and huge TV budgets made Sivan’s hair removal product a hit. Sales also skyrocketed after Sivan spent more than $2 million on slick ads inserted into a department store’s monthly statements.
Privately held Tactica, with sales approaching $100 mil-lion, is managed by a small team of people working on the seventy-fourth floor of the Empire State Building. Moving his company into an American landmark is significant for Sivan, who grew up in a poor family in Israel. At nine, he started delivering laundry to earn money to pay for his own bar mitzvah. At fourteen, he ran away from home and joined a kibbutz. He later served in the Israeli Army. In the early 1980s, he was the only survivor of a secret mission into Lebanon and spent six months in a hospital recovering from gunshot wounds.
“My name and credibility are very important to me,” said Sivan, who works from 6 AM to 11 PM most days. Sivan says his entrepreneurial hero is Richard Branson, founder of Virgin Records and Virgin Airlines, who is expanding his empire into banks and soft drinks. “We get fifty to sixty pitches a month,” said Sivan.
“We have a focus group to filter the products, but I make the final decisions.”
Meanwhile, Sivan has these tips for anyone interested in following his aggressive marketing model:
- Develop a product that appeals to the masses. It has to be unique and not a “me, too” product.
- Find a product with markup of five times the wholesale price. If it costs you $20, you want to sell it for $100.
- Register copyrights and trademark your product to protect it from knock-offs.
- Encourage inventors to present you with new ideas.