Know-How Exchange : Strategy

Suggestion: Stop spending your time and money on design and manufacturing until you have a business plan, and a marketing plan, and can satisfy yourselves that the business has a chance of succeeding.

Nine out of ten new businesses fail in the first two years, and the most common reason is that they are underfunded. Yet in spite of that fact, entrepreneurs continue to think that their product can somehow defy the odds, and they pour their resources into creating a product without enough money to market it or a business plan that shows any indication that the venture can possibly become a commercial success.

Stop using fine materials, fancy tags and a clean design. Stop making underwear that is elegant, simple and comfortable. Instead devote your energies to developing a sound business plan. If you do, perhaps you can find some investors who will put up the money to fund your marketing. If you don't you'll be out of business before you start.

For ALL start-ups, regardless of online or with a physical presence, having a "non-existent" marketing budget for your business is a recipe for failure. This is the #1 reason why businesses fail! The business' success is not about the product - as in your case, there are plenty of competitive and alternative products (or services) available. With a very few exceptions, consumers don't really know they need an another option. Marketing is needed to educate them that 1) You exist; 2) You are an alternative; 3) You satisfy their needs more completely than their present solution. Marketing gets that message out to the consumers! If you don't have budget to get the message out, then no one will ever know about you.

In many start-up businesses, you don't have money but you have time. What this means is that since you can't afford to pay someone to do so, you personally go out and tell people about your product. Obviously, this means you start locally and/or regionally. Go to networking groups, talk to as many people as you can, pass out business cards, and everything else you can think of to meet people who need men's underwear. While email marketing is nearly free, it's also like 0.04% effective - meaning for every 10,000 people you email, you'll get 4 people who purchase. Let's see, you're "break-even" is probably 1000 customers so that means you need to send 10 million emails! Direct sales is probably about 10% effective so to hit break even, you need to personally reach 10,000 customers.

So here's what you do: Since you don't have any money to advertise, you need to find an investor to give you some money. You need to put together an air-tight business plan for investors, complete with an "end game" strategy - where you sell your company or go public. This shows your investors how they will get their money back plus 10X. To do this, you need much marketing data - surveys and focus groups showing that many males don't like their underwear from FTL and don't want to pay for KK. You need to show a "compelling need" that you alone satisfy such that you will get enough customers to provide that 10X payback for investors. That means that if they invest $100,000 and that nets them 50% of the company, the company will be sold to a competitor in 5-7 years for $2 million and they will net $1,000,000.

Not the "clever, cheap" ideas you were looking for, but it's reality. I hope this helps.

Wayde

As part of the marketing plan suggested by the experts above, I think it would make a lot of sense to get a solid understanding of your target market. This information will increase the likelihood that you will get an investor (as mentioned above), as any investor will want to know the way in which you will position your product, how it achieves the needs of the target market, and how the benefits will be communicated. It will also help you to increase your chances at overall success.

You might want to think about visiting the SCORE website - there are retired executives who can help you with the overall framework of a business and marketing plan and how you can make it a document that will help you attract investors.

https://www.score.org/index.html

Good luck!!

If you can make a business plan that gets a commodity product (a commodity is one that has much, much competition and has microscopic differentiation from competitor to competitor) launched and successful without spending any money on marketing, the business plan alone is a gold mine! Of course, this all depends on your aim. If this is a hobby, then, go for it. You'll have great fun at flea markets selling men's underwear. Great hobby if you are into that sort of thing. If you are serious about making this a business, you need a marketing strategy detailing a terrific competitive advantage, a business plan, and deep-pocketed investors.

I'm not saying "give up." I'm saying think it through to find the advantage that satisfies customers' needs better than the competitors can.

Wayde

Actually, you see Hanes commercials all over the TV! Michael Jordan (since 1998) stars with Charlie Sheen, Cuba Gooding, and Kevin Bacon are the stars on the ads. Do a Youtube search and you'll see this. Do a search on FTL you'll see many commercials with the fruits. Do a search on CK and you'll find commercials for TV. Jockey seems to have dropped off the TV ad circuit, but they used to be there. And men's underwear ads are in radio, TV, magazines, newspapers, as well as street panels.

The point is: This is a VERY mature market with very big competitors! besides being priced in between CK and FTL, how can you diferentiate yourself from all these heavily entrenched competitors? In other words, how can you satisfy a customer's needs better than the competition? and very specifically, what's the compelling pain the customer feels today and how do you relieve that? This is the KEY question any investors will ask of you. You need to have a strong answer. Your question of "is there a good way to launch it" is irrelevant unless you have a very good answer to that question.

Wayde

Read about Joe Boxer (https://www.joeboxer.com) - who took a humorous (and successful) approach selling underwear.

You might also want to read this: https://www.miamiherald.com/business/story/1218889.html for some sales statistics.