In the business world, David takes on Goliath in thousands of ways every day and -- these days -- slingshots just don't cut it.
Local companies, be they manufacturers, techies, retailers or service providers, compete against larger and more established regional, national and international powerhouses on a number of fronts. Marketing, manipulation and moxie are the weapons of choice -- not to mention necessity -- to level the playing field.
Money helps, but not all companies enjoy the luxury of massive budgets and an advertising arsenal. Most businesses stress the importance of finding a niche.
Locally, smaller businesses use a variety of strategies to stay afloat amid competition from much larger companies. In this issue, we look at several firms that are going "against the tide."
Consider Leed's, the New Kensington-based promotional products supplier to the advertising specialty industry. Companies order Leed's products through distributors and have the items customized with their own logos, slogans and lettering.
In business since 1986, Leed's latched onto this niche about five years ago and in that time has soared from 50 to 500 employees. Originally known as Leed's Leather Products, its founders, Bruce Weiner and Tom Bernstein, distributed products through luggage and specialty stores, department stores and mass-market retailers. It began selling to the promotional product trade in 1992, but within three years, that segment represented a whopping 65 percent of the company's total sales volume. The name was changed to Leed's Business Accessories and by the end of 1998, the company saw its promotional product segment rise to 99 percent of its annual sales volume.
So the company decided to make the segment its sole focus. It quit competing for shelf space at massive retailers like Wal-Mart and set up joint promotions with publications like the Wine Spectator to get its name -- compacted to Leed's in 2000 -- out to prospective customers. It also launched a catalog, LeedsWorld.
Although Mr. Bernstein wouldn't divulge financial information, The Counsel Magazine, an industry trade publication, ranked Leed's 8th among the Top 40 advertising specialty suppliers in the United States, as ranked by 2002 sales. Mr. Bernstein said he expects 2003 sales to be strong enough to crack the top 5 for next year's list.
"We stuck true to our mission, delivering exceptional quality to our customers and constantly challenging how to do that," he said.
One way has been to partner. Leed's uses outside talent through product development agreements and licensing deals.
"It gives our customers a wider selection of products," said Mr. Bernstein.
For the past four years, Leed's has brought on Bally Design, a North Side-based product development and industrial design firm, on a project basis to develop business accessories. Now Bally is designing an entire product line led by padfolios -- also called portable desk tops -- that will debut in December 2004. Bally receives an undisclosed percentage of sales from the line through the development agreement.
"At the end of the day, whether you're selling a product or service, you're selling to people and there are basic characteristics that motivate them," said Geoff Tolley, CEO of Strip District-based advertising agency GBL Inc. People want to be loved and feel smart, he said. "If you can, in some way, get to that, it's key to whatever you're selling," he said.
GBL handled advertising for O'Hara-based Delta Power Tools for several years until the company was acquired by Tennessee-based Porter Cable which opted for a larger agency. Ex-Delta executives who joined rival WMH Tool Group in Chicago tapped GBL to handle its Jet Power Tools line.
"We took our expertise to go after the second player in the market," said Mr. Tolley. He said it was difficult to break down market share, because of how the power tool industry is broken into categories. But Jet competes against some very well known names, in addition to Delta.
"You're up against the big boys like Black & Decker and Sears," Mr. Tolley said.
The angle the agency is taking with Jet is to position it as an affordable alternative to the industry giants.
"But we've also been trying to build a stronger brand for Jet, which they really haven't done," he said.
So the marketing centers on making the connection between potential consumer and the ability to build something with his or her own hands -- something just about everyone can identify with.
"Everyone likes to do that, to start with nothing and then they've got a toy or piece of furniture they've created," said Mr. Tolley. "We're not so much selling power tools as a way for you to put your creativity to work."