Product Development: Design, Name, Logo and Packaging
A WIDE RANGE OF DIFFERENT ELEMENTS go into defining a great product, including the uniqueness of your recipe, the quality of the ingredients, the packaging, perhaps the specific process of its artisanal, small-batch production and, even, the messaging you’ve created around your product.
As we touched on earlier, marketing is a term that covers a wide range of considerations associated with selling your homemade item. Most business schools cover the 4 Ps of marketing: Product, Price, Place (how you distribute your item) and Promotion, both in the form of paid advertising and “free” public relations.
We explore three additional Ps in our ECOpreneuring book, in part because marketing has become so pervasive and integrated into day-to-day routines, often in subtle or clever ways. It permeates our life through product placement in movies, naming rights for stadiums or campus buildings, Facebook updates or reviews on Yelp. These additional 3 extra Ps of marketing — People, Partnerships and Purpose — reflect our values and belief systems and connect us to our community.
Because marketing plays such a pivotal role in the success of any product, we’ve broken the 7 Ps of marketing down into several chapters. Realize, however, that the most effective marketing efforts are those that combine all seven elements into one cohesive, integrated and clear plan that can be effectively implemented.
Before getting into the product aspect of marketing, we’ll touch on three very important concepts first: finding your niche, defining your target market and positioning your product.
Finding a Niche with Potential
Nearly all food businesses, large and small, assess potential markets, carving out a niche that seems most likely to earn enough money by selling a product to make it worth pursuing. If you don’t make some profit, at least three out of five years, you’re not in business, according to the IRS; you’re just a hobby. We’ll cover this more in Chapter 12.
A niche is a segment of a broader market where you believe your product can do well. Because of your product’s unique characteristics, better quality or because it faces little competition, you may find greater flexibility in terms of how you market and sell it. Remember, if you define your niche too narrowly, or if there aren’t enough customers who want what you make at the price for which you’re selling it, then this niche doesn’t have the market potential to make your business viable. Don’t throw in the towel, just re-evaluate your goals and examine ways to expand your market without being everything to everyone.
Defining Your Target Market
While a niche is often product-focused, your target market is the audience or potential customers you want to reach, serve and satisfy with your products. The 7 Ps of marketing are guided or defined by who you select as the target market. In other words, the customers most likely to purchase your products in a large enough quantity at the price you’ve determined will allow your business to prosper.
There are a number of ways you can define your target market:
• By demographics: age, gender, geography and income level, among many other variables
Example: ages 30–40, female, living in Smalltown, New York, earning $50,000 to $100,000/year
• By psychographics: attitudes, beliefs and value systems
Example: a Cultural Creative “locavore” who loves artisanal food products, especially those that are organic and made without preservatives. Different from Traditionals and Moderns, Cultural Creatives are more attuned to environmental and social issues.
You’ll need to define and understand your customers in both demographic and psychographic ways. Think about it this way: demographics help you understand who your customers are while psychographics help determine why your customers buy what they do. Keep in mind that the needs of your customers may not even be real; they could just be perceived. In other words, your customers may not even know they need your product, even if they do. Think: impulse purchases. From this information, you can then develop your marketing strategy, and from that, a marketing plan that addresses those 7 Ps.
Due to your familiarity with and assessment of the marketplace, you may already have a solid grasp of who would buy your products. You’ll probably start by selling to neighbors, family or friends already clamoring for your products. Maybe they attend the same church, work in the same office or school, serve in the same civic organizations or attend the same youth soccer games. This works great until you find yourself wanting to sell more products and ramp up your operations to reach customers beyond your immediate network. At that point, you’ll need to flush out the target market more thoroughly if your marketing efforts are to be effective.
“Homemade” is the buzzword that CFOs celebrate with authenticity and pride. JOHN D. IVANKO
Positioning Your Product
In marketing jargon, the expression of differentiation is called positioning: the combination of marketing elements that go into defining your product. Defining exactly how your product might appeal to your customers in terms of their needs or desires and the benefits it provides can be tricky. While you may believe you have the most unique and tasty fruit-flavored graham crackers ever, in the end, your potential customers need to share this perception and feel that it meets their needs as a healthy snack (assuming that’s one of the benefits of your product). Product development research and a market feasibility study, covered in Chapter 9, guide this process.
Positioning can consider all 7 Ps of marketing, plus how your product might be used or the solution to a problem it addresses. Often, positioning can involve a combination of several variables. For example, your sugar-free sweet rolls could be a solution as a breakfast item for customers seeking ways to cut back on their sugar. Or that same sugar-free roll could be a delicious and healthier way to savor a snack, perhaps with a cup or coffee or tea.
Keep in mind that there’s a big difference between being product-focused and market-focused, especially if your aim might be to scale up your operations. The market — your customers — are the ones telling you what they want, what benefits they perceive, what problem is being solved, or what needs are being met with your product. Are gluten-free breads absent in your community? Is a well-attended local arts show missing a food vendor, with hungry art shoppers with no place to go for a snack?
With positioning, you’re conveying what your product is, how it’s different from the competition and why a customer should buy it from you. One route to success may be to come up with a “signature” product, something unique. Perhaps it’s your uncommonly good approach to a common recipe. Bonus points for being clever, creative or distinctive in describing it. Even when you have no competition for your product, its taste will ultimately determine whether customers come back for more.
What you’re actually selling could be much more than just the taste, flavor, texture, size or appearance of your food product. If you package or distribute it as a gift for tourists or the holiday season, your approach will be far different than if it was a product offered at a farmers’ market. Depending on your item, you may even offer some form of service, like a guarantee of satisfaction.
For example, a Swiss-style cookie sold in a Swiss community with lots of tourist traffic might be positioned as an edible gift or a souvenir. The name, packaging, price and label should aid in this by eliciting a clear and prompt “I should try this now!” thought in a potential customer’s mind while they’re browsing the arts and crafts fair where you’ve set up a small stand.
Price can appeal to a customer on a limited budget, or deter an upscale clientele who might happily pay a premium for an item with high-quality ingredients or fresh from the oven. For many impulse purchases, convenience, comfort or hunger may drive the exchange; customers may pay a premium for any one of these qualities. How your product is different can take interesting forms; perhaps you deliver by bicycle. For example, Domino’s Pizza, the national pizza chain, is famously known for being in the delivery business, not the pizza business. That’s how they do pizza different.
Depending on your marketing strategy, you may be able to create an entire experience around the enjoyment of your product and the love that went into making it. Starbucks sells an experience, not just coffee. Who knew so many Americans would pay a lot of money to order a double tall skim vanilla latte and hang out in a coffee house instead of a bar. Starbucks identified a perceived need among people and delivers a “coffee experience” in a way that differentiates them from the hundreds of thousands of coffeehouses and cafes that already exist.
Ideas Everywhere
When exploring how to label, package, price and sell your products, there’s nothing wrong with seeing how other food entrepreneurs do it. Wander the aisles of a Whole Foods Market or a specialty gift store that sells food products. Below are a few more places to check out:
• Specialty Food Association’s Fancy Food Shows, held on both coasts every year, and their informative website (specialtyfood.com).
• Mother Earth News Fairs (motherearthnews.com/fair), with a focus on sustainable ingredients for a wide range of food products.
• igourmet.com — if you’re looking for how other food artisans create gift baskets and design their labels, check out this online gourmet food and gift retailer.
• stonewallkitchen.com — another source of ideas and to see how a Maine company thrives in the specialty food business.
• Natural Products Expo, East and West, focus on natural, organic and healthy-lifestyle products (expowest.com and expoeast.com).
• Green Festivals, hosted by Green America and Global Exchange, are now the largest and longest-running sustainability and green living events held in various large cities throughout the US (greenfestivals.org), with an entire section devoted to specialty food products.
• Good Food Awards (goodfoodawards.org), organized by Seedling Projects, is the first national awards platform to recognize American craft food producers who excel in superior taste and sustainability. The awards for outstanding American food producers and the farmers who provide their ingredients are given out at a ceremony and marketplace at the Ferry Building in San Francisco. The eleven award categories are beer, charcuterie, cheese, chocolate, coffee, confections, pickles, preserve, spirits, oil and honey.
• National Restaurant Association Show (show.restaurant.org/Home) in Chicago, one of the world’s largest food and beverage trade shows. While focused on food service, the NRA Show also reveals the latest culinary trends and new products.
• Good Food Festival and Conference (goodfoodfestivals.org) in Chicago links some of the best local farmers and family-owned producers of food and farm products with the public, trade buyers and leaders in the field to foster relationships that facilitate the growth of local food systems.
• Artisanal LA (artisanalla.com) in Los Angeles showcases the best artisanal food vendors from around the country, from bakers to chocolatiers, canners to coffee roasters.
A supermarket now contains, on average, more than 42,000 products, according to the Food Marketing Institute. Our modern-day marketplace is about choices, providing something for everyone, with companies vying for market niches and every dollar of the consuming public’s disposable income. With 70 percent of the US economy based on “consumer spending,” your product is directly linked to this broader economy. Making a great-tasting product is only the start.
There’s no “right” way to position your product; the choices are infinite. But if you’re stuck with a bunch of unsold items at the end of the day, you’ll need to re-evaluate both your product and your marketing efforts.
While largely guided by your state’s cottage food law, there’s plenty of breathing room for what you create in your kitchen to sell to the public. It’s the combination of your ingredients and the packaging, presentation and pricing — plus the story you create around your product — that gives your product its identity or personality. How you define the attributes and aspects of your product help differentiate it from others in the marketplace.
There are, however, certain conventions used in the industry that you’ll need to follow, since that’s also what your customers are expecting. Size and quantity are two important considerations. If your muffins are double the size of others at a community event, are you sure you can charge double the price, or do you even need to? Alternatively, people are used to getting discounts when they buy extra. So consider having a sliding scale for items sold by the half and full dozen.
If you’re like us, you may already have a few well-tested recipes for products that just need a plan for sharing them with those who want to buy them. Our chocolate biscotti crunch, chocolate-chip zucchini loaves and chocolate-chip pumpkin muffins may soon have an outlet, thanks to Wisconsin’s pending Cookie Bill. Our distinguishing attributes are organic ingredients, many of which come from our organic farm, which is completely powered by the wind and sun. Following our concern for the environment, our packaging is made from recycled content and can be composted.
There is no right name for your product. But there are names that tend to elicit a smile, convey a mood or feeling, or are just plain fun. While the name you give it should be true to the product and reflect the ingredients or contents, there’s plenty of evidence that a catchy name grabs the attention of a potential customer passing by. In that fraction of a second, you’ll either have a sale, or not.
Tools for Product Creation
There are lots of tools used by inventors, entrepreneurs and people working in creative fields, most of which work perfectly for developing new food products. Here are a few you might want to try if you don’t have Auntie Emma’s secret recipe:
• Brainstorming
Among the more common ways of coming up with creative ideas and solutions to problems, brainstorming encourages a free-flowing and spontaneous list of ideas with few limiting constraints. After the list is assembled, it can be whittled down to a shortlist of the most promising ideas.
• Free association
Sigmund Freud made it famous, making the unconscious conscious. But free association can work for more than patients with psychological problems. Let your mind go when dreaming up new concoctions in the kitchen. Have a family member make a random list of various words or a targeted list of culinary words and see what pops into your head.
• Opposite attractions
Sometimes it works for marriages, so why not see if some opposite attractions work for your culinary creations? When it comes to flavors, explore pairing sour and sweet, like mangoes and salsa or balsamic vinegar and raspberries. Salty and sweet are a well-known match made in heaven. Keep a notepad next to your bed in case an idea suddenly appears; the moments just before and immediately after you sleep can be very creative times for some people.
• Discordant events
Disagreement and conflict can breed new ideas, even if they’re odd, like the invisible dog or a “pet rock.” Why did it take so long to put wheels on luggage so we wouldn’t have to drag our suitcases through the airport? One of the tastiest ideas in recent times is turning a flower bouquet into a cookie bouquet. When can something that clashes become something brilliantly creative?
• Drawing a map for success
What would it look like if you made a picture of your dream business? Sometimes pictures are worth a thousand words. Some of us think visually. Try sketching a map or visual representation of your route to success, tracing the ingredients from the garden or a local supplier to your end product. Or use one of the many online apps or a free website, like Freemind, to guide your efforts.
Take chocolate biscotti. Perhaps it’s crunchy, made with fair-trade certified cacao powder and almonds and can be enjoyed as a snack with coffee or tea. Why not call it Double-Down Chocolate Almond Crunch? Adding a little alliteration, plus including another defining ingredient (almonds), may trigger a pang of hunger — and spur an impulse purchase.
Avoid obsessing over naming your product, but have fun with it. Keep your market, positioning and other marketing considerations in mind, since your name should echo the other aspects of your marketing. If you are planning a product line, consider a name that can be easily carried across the entire line in some way.
Before you settle on a name, however, try running it by the Internet to make sure you’re not violating any existing trademarks. “Cease and desist” notes from an attorney representing a company with a product by the same name as yours can sour an otherwise exciting product launch. Here’s one of the items that came up on our search for our hypothetical Double-Down Chocolate Almond Crunch: Creamy Almond Crunch SQUARES™, trademarked by Ghirardelli, a multinational. Given this, we’d feel okay to proceed with our product name. If we wanted to take this product national and scale up, we’d complete a trademark search with the US Patent and Trademark Office (see Company Name sidebar) to be a 100 percent certain, while protecting our name from infringement by another company.
A Company Name
Besides coming up with memorable, descriptive, relevant or provocative names for your products, you’ll also need to decide on the legal name for your company itself. Many CFOs have a fictional business name used with the public that’s distinctive, easy to say and spell, memorable and that captures the essence of what you sell or evokes feelings you want associated with your business. This fictional name is referred to as a DBA, “doing business as.” There’s nothing wrong with using your own name in the business name, or a variation of it, like Bonnie’s Baked Goods (with alliteration) or Aunt Emma’s Pride. You may have a more personalized name for your business, too, if you operate as an LLC or corporation (covered in Chapter 11), plus a DBA. Your business name is part of your marketing, so take the time to choose it carefully.
Before you proceed, run the name by friends and family for feedback. Check to see if the domain name is still available in case you want to create a website. If you think there’s a possibility you might scale up later on, check to see if you can trademark the name with the US Patent and Trademark Office (USPTO). The website domain name can be checked for free on whois.net; to complete a free USPTO search using the “trademark electronic search system,” type your name into their search engine on uspto.gov. Even if you do not want to trademark your name, you will still need to register it in your state through your secretary of state or other licensing department; your state will have some form of free search feature to see if the name you want can be used there.
Great news. The cottage food law for your state dictates exactly what must be on the label. If you’re not selling wholesale, you won’t need those UPC symbols or the product nutritional information panel you see on packaged goods. In fact, besides a list of ingredients in order of greatest to least use by weight, most states only require a sentence with your name and contact information, plus a sentence that says something like “Manufactured in a home kitchen” or “Not prepared in a state-approved commercial food facility,” the exact wording usually specified by your state. While not required for labels under most cottage food laws, weight, units or volume measurement, can be added; note, however, that weight is always net, referring only to the contents and not the packaging.
Pucker Ups label from Inn Serendipity Bed & Breakfast. JOHN D. IVANKO / INNSERENDIPITY.COM
Only food companies with “annual gross sales made or business done in sales to consumers that is not more than $500,000 or have annual gross sales made or business done in sales of food to consumers of not more than $50,000 are exempt” from nutritional labeling requirements, according to the FDA; for lots more detail, see their website: fda.gov.
While not explicitly required by state cottage food laws, it’s advisable to take extra precautions by labeling your product and identifying any allergens, such as milk, eggs, tree nuts, soy, peanuts and wheat. For example, if they have allergens in their kitchen, many CFOs elect to add a sentence like “Made in a facility that processes peanuts, soy and wheat.” For most operators working from a home kitchen, this would be the case.
Be careful on any health claims you make on your label or in any marketing materials. If you say that your product reduces the risk of a disease or medical condition, this claim must be approved by the United States’ FDA, a process both highly involved and complicated. If you claim that an ingredient in your product improves a function, such as “calcium builds strong bones,” you will need to compile legitimate research from reputable and neutral sources. If you make a nutrient content claim, such as your muffins are high in fiber, low in fat or low-glycemic, the package must have a full nutritional label that may be more complicated and costly than you may want to go. You cannot file for an exemption when you make a health claim.
Beyond the state cottage food requirements, the rest of the label design is up to you and your fancy. Thanks to color printers and various self-adhesive label options for home printing, if you have some mastery of a computer, take great photographs, have talent as an illustrator or can type, you can pull off a homespun label in very small quantities to stick to your jars, boxes, containers or tins, whatever their size.
If you have enough volume, however, there are several options for printing professional-looking labels on par with anything you’d find at a supermarket or specialty food store. Thanks to breakthroughs in digital printing, Lightning Labels (lightninglabels.com), Wizard Labels (wizardlabels.com), PrintRunner (printrunner.com) and YourLabelsNow (yourlabelsnow.com) are four companies you might consider that can quickly produce smaller print runs at reasonable prices.
UPC Codes for Wholesale Customers
A Universal Product Code, or UPC, is a series of bars and 12-digit numbers unique to each packaged item you may sell, issued by the GS1 US Partner Connections Program (gs1us.org). Though they are not required by law, UPCs are usually a necessity if you offer your products wholesale to retailers and distributors, as they allow these customers to store, stock and track sales of your items. These codes can also be secured and printed by companies like ABB Labels (abblabels.com) or Simply Barcodes (upccode.net). Each UPC code includes both a manufacturer identification number and a unique item code. Note that UPCs are different from Stock Keeping Units or SKUs, covered in Chapter 14.
Logo: Picturing Your Product, Company or Brand
Whether it’s a symbol, a graphic, a word or a creative combination of two or three of the above, a logo helps define your company and its products and makes what you create more memorable to your customers. A logo can be as simple as Nike’s swoosh or as intricate as Harvard University’s shield with its Latin motto, Veritas. While you don’t need one to operate a business successfully, a logo can help, especially as you expand. A well-designed logo lends credibility and an aura of professionalism, and may help reinforce your price strategy if it’s on the higher side compared to your competition.
When designing your logo, consider how and where you might be using it. Will you be paying to reproduce it in four colors on a label, or photocopying it in black and white at the top of your solicitation letterhead? Maybe you’ll be doing both color and black and white. Detailed logos can rarely be reduced to small sizes on product labels and still be legible.
For basic, low-cost logo options, review various online logo makers such as LogoGenie (logogenie.net) or Graphic Springs (graphicsprings.com). These websites walk you through the logo design process for free online. If you like what you created, you can download the final art for less than ten dollars.
Slogan
“The Freshest in the Business”
“Bottling up Nature”
“Quality. Taste. Baked right, every time.”
Similar to a logo, but written as text, a slogan captures in a phrase what your business is about in a memorable, catchy and creative way, with the intent of helping close a sale. If you distilled your product to its essence, what words would you use to describe it?
Also like a logo, a slogan, while not required, can help position your products in the minds of your customers and reinforce the personality of the brand you’re creating. If you say “fair and balanced” enough, people believe it (even if it isn’t necessarily true). Can you complete these sentences?
“When E.F. Hutton talks, people ________.”
“_________ of Champions.”
If you can’t fill in the blanks of both slogans, it means either you weren’t alive when they were used or you weren’t in the target market for these products.
Slogans can be used on your letterhead, website, beneath your company name or tied to your logo in some way. Unlike your business name and logo, however, slogans can, and often do, change over the years. In 1979, Toyota proclaimed: “Oh, what a feeling!” Now, it’s “Moving forward.” So if you discover a more compelling slogan, perhaps something a customer says, change it.
Safely Packaging a Powerful Punch Line
With your name, label and logo in hand, the next step is getting your item packaged in a way that ensures its quality, safety and compelling presentation. One thing is certain — as much as possible, your packaging should allow the customer to see your product. People eat with their eyes first.
When working at a large ad agency in Chicago years ago, we became familiar with the expression, “selling the sizzle, not the steak.” In some cases, the actual product attributes themselves were tangential to the messaging and claims made about the product. We were creating a personality or image around an item, a national brand, and having that personality carry over to the product itself, so people would be persuaded to buy it next time they needed a box of cereal for breakfast. What does a cartoon character have to do with a nourishing way to start your day with a cereal breakfast? The answer is, it doesn’t really matter, so long as the customer feels the emotions and connects them with a certain product so that as a result they select one brand over another. Finish the sentence: “They’re _______!”
By their very nature, many specialty food products and cottage food items are impulse, on-the-spot purchases. You could be selling muffins at a community event where hungry kids tug at a mother’s sleeve or setting out stacks of your granola bars at a Little League game. Besides being able to see what your product looks like, having a professional and engaging package and label can be the difference between landing a sale or missing one.
Whether or not your state law specifically requires product packaging, safely wrap your item for two compelling reasons:
(a) sturdy packaging prevents food contamination and ensures safe transport;
(b) unique packaging can be a marketing advantage.
The first and most important issue is food safety. Wrapping your product makes sure it will not be exposed to the elements, either on your end as you transport it to your sales venue or customer or when your customer brings it home or delivers it to the final destination.
Your style or design of packaging depends on what you’re selling, but it’s especially relevant to baked goods, candy and anything what won’t already be in a jar, like jam. For basic baked goods, food-grade plastic bags work well. As you start out, these could just be ziplock bags from the grocery store. As you sell more product, check out a bakery packaging supply outlet to order bulk bags or various-sized cardboard pastry boxes. These boxes can be important if you make something fragile that requires extra transport protection, such as decorated cupcakes. Sources of cardboard boxes for baked goods include KitchenKrafts (kitchenkrafts.com), MrTakeOutBags.com (mrtakeoutbags.com) and BRP Box Shop (brpboxshop.com).
Thoughtful, colorful packaging draws customers in and can showcase your product. For baked and other goods, the range of packaging options can be overwhelming. There’s clear plastic sleeves, paper bags, display boxes, decorative tins and for the eco-minded, corn- or soy-based natural, biodegradable alternatives. Each has a cost that needs to be considered when fixing the price for your product, a subject covered in the next chapter.
If you’re selling baked goods directly, perhaps by delivering them to an office, large boxes might be a good choice. You might even explore reuseable delivery boxes, with a deposit that comes in the form of a discount off a future order. If you’re selling a fancy edible cookie bouquet for the holidays or anniversaries, then a food-grade basket and plastic wrap might make the most sense.
“The whole presentation, the pink box, the ribbons, the way it was put together was really, really cool. Everyone loved it.”
— HARMONIE KUHL, CORONA, CALIFORNIA, A CUSTOMER RAVING ABOUT COOKIES YOUR WAY
Some packaging costs more. You’ll have to decide if it’s worth it to elicit an impulse buy or increase sales. You can buy cupcake boxes that hold two cupcakes in an insert and come with a carrying handle and a “window,” a plastic section on one side so you can see inside the box. These can cost up to one dollar each, but may make your customer feel like they have received a beautifully wrapped present. If you’re selling at a market or event and someone is carrying around that cute box, they may serve as a free walking advertisement for your product. Adding a piece of colorful tissue paper in a bakery box may add a frilly gift appeal.
Because standard boxes for baked goods come blank, don’t forget to add a sticker label or stamp that displays your business name and contact info prominently, so customers can reorder or have a quick reference for referrals. There’s no need to add the extra expense of printing on cardboard boxes. Feel free to dress up the box even further with a ribbon or other colored stickers or stamps. These simple touches add inexpensive glitz to your product and announce that they hold something truly special inside. Adding an extra bling to packaging, like a metallic ribbon, can increase the perceived value of your product and command a higher price.
For canned items, glass jars work perfectly; they are, by default of health and safety issues addressed by hot water bath processing, the only way such goods can be sold. But you can still add a little frugal extra to dress these jars up and boost your item’s perceived value. A cloth ribbon around a canning jar adds that “gift” appeal. Place a small round of cloth material under the canning jar ring for a pop of color; a paper cupcake liner may also work well under the canning jar ring.
Inn Serendipity’s creative packaging on display. JOHN D. IVANKO
One clever way to cover the requirements related to labeling your jars is to use the top and bottom of the jars for the product name, ingredient list and other required verbiage. In this way, your customers can see your wonderfully preserved relish or pickles.
For specialty food products that are sold wholesale, packaging is particularly important. The container for the product should be comparable in size, both by weight and dimensions, to your competition. Make sure your case size is the standard twelve units. Remember, you want to make it easy for retailers to stock your items on their shelves.
The look of your product — its name, label, logo and packaging — is just the start. In the following marketing chapters, we’ll explore some of the other aspects of building a brand and growing a customer base eager to purchase your products and support you and your business.
Bottom of the jar label, with required information presented per the cottage food law in your state, like the date, name of person doing the production and the “private home” disclaimer line. JOHN D. IVANKO
Top of the jar labels from Equinox Community Farm, with key information presented, including company and product name. JOHN D. IVANKO