CHICAGO -- TeleBrands is using the power of television to guarantee sales at retail.
The Fairfield, N.J.-based company will not bring a product to retail until it has established itself in television commercials or infomercials as a "blow-away winner," surpassing its break-even point by three to four times, said Sabin Segal, vice president and director of sales and marketing.
Once it has been identified that way, the product goes to retail via a sales force of about 200, including regional sales managers, sales representatives and broker organizations, he said.
"When one of our products is introduced at retail, it already has pent-up demand and is presold to the consumer. It is in demand by 88% to 92% of the viewing public," said Segal, speaking here at a conference hosted by The Marketing Institute, a division of the Institute for International Research, New York.
Only 8.3 out of 100 people watching a two-minute direct-response TV commercial will finally order the product using the 800 phone number. About 92% will not call to order for various reasons: they do not want to give their credit card number, distrust the 800 phone number, want to wait until the item gets to the stores or are just apathetic, he said.
"Only 12.7% of all short-form direct-response and infomercial products ever reach retail," he said.
TeleBrands has extensive point-of-purchase offerings for retailers, such as "As Seen On TV" signs, shelf extenders, floor displays and loop-tapes for video-recorder demos, Segal said.
Trade advertising is conducted in support of the product. The chain is offered advertising dollars over and above the TV coverage, with proof of performance, he said.
"The minute [sales of] the product slows in a chain, we find out why. Sometimes TV coverage is slowing in a given area. Or perhaps the product is no longer being featured in a prominent in-store location," he said.
Segal said that when sales of Dental White, a tooth-whitening product, started to drop in Osco and Sav-On drug stores in the greater Chicago marketing area (including Milwaukee), TeleBrands discovered the product was "being hidden" in those stores.
"We already had Walgreens, Wal-Mart and Dominick's carrying the product. We put on an intensified television campaign. Sales increased by 28% at Walgreens, by 28% at Wal-mart and by 45% at Dominick's. "The Osco and Sav-On stores were crying for the product and had to do a fast turnaround," Segal said.
However, once it's determined that a product has reached a real low and no additional advertising or promotional support will help it, TeleBrands offers immediate markdown dollars to the retailer.
Segal shared some recent successes. The SmartMop had been a great winner on infomercials and more than 300,000 pieces were sold on the Home Shopping Network. The manufacturer decided to take it to retail. Venture Stores brought in 15,000 SmartMops and sold 7,500 in three days without an ad. By the time the ad was one day old, Venture had issued 17,000 rainchecks, he said.
Another success has been the Mike Levy Super Slicer. Already, 400,000 pieces are on order from retailers who have not seen the ad.
"The Super Slicer will be a blow-away winner in the last quarter of 1994 and first quarter of 1995, surpassing five times the break-even point," he said.
Whisper XL, a hearing amplifier that features celebrity Steve Allen in its advertising, has been such a success in direct response to its television commercials that the spots had to be discontinued temporarily due to a back-order of 200,000 pieces, Segal said. This product has not yet been introduced at retail, but has achieved 10 times break-even in a print media campaign.
"TeleBrands doesn't know which products will be winners. We see about 1,500 items a year. If our hunches are correct, out of 40 test products we will come up with two to four that we feel will have good direct-response results in a national promotion," Segal said.
The product is tested in about 10 markets with two-minute short-form direct-response TV commercials, like mini-infomercials, that cost $15,000 to $35,000 each.
Sometimes the product is tested with two different retailers at the same time to ascertain its retail worth, he said.