Getting Jupiter to think like Mars

[danielray]

Two seemingly random points just sort of collided in my head and I figured I'd just sort of think outloud in this space (what's new?).

In reading a thread that was discussing accounting practices for open class corps, I started thinking about the unique challenges these up starts have in terms of capital expenditures and the amount of cash they need to keep tied up in assets at times when they could really use that cash and also have limited options for financing.

The hamster started running... trying to think of potential options out there for freeing up cash and examples in other industries that may apply.

I got to thinking about how some brands behaved in emerging markets and how they became more flexible in their approach in order to capture long-term distribution.

I remembered an approach that Mars used years ago in trying to establish themselves in Eastern European retail channels and find some unique advantage over their other multi-national competitors. While their competitors were focused on cutting deals with major retail chains (which were only newly developing in Eastern Europe at the time), Mars took a different approach and focused on all of the small independent retailers scattered around everywhere. Rather than going for the high volume outlets, they chose to be EVERYWHERE they could.

One of the challenges here is that these small shops usually had cashflow issues and couldn't commit to keeping considerable stocks and also had challenges getting any bank finance. In order to effectively capture these, Mars needed to look at the market in a different way. Instead of seeing this opportunity simply as simply an opportunity for retail sales, they needed to consider it a brand building (Mars brands were new to Eastern Europe at the time... and not well known) and as a sort of hybrid marketing opportunity.

What did they do?

They set up a new unit that would finance inventory of their product to these small shops in ways much more flexible than banks could, but structured in a way they could write off some of their losses as marketing expenses. In return for this assistance, they had to sign agreements that were more restrictive in terms of the competitive products they could carry and continued purchase requirements for if they grew past a certain amount of turnover. Out of these small independent shops, some of them turned into chains, while others were rolled up into chains of small retail outlets. In the end, this strategy paid off like mad.

How is this relevant?

A company like Jupiter (using Jupiter because they are trying to break in and provide the full range of instruments.. but could be any) wanting to more solidly establish itself in the marching music space with a new product line could set up a unit to more flexibly finance upstart and less competitive organizations with the goal of getting their product EVERYWHERE, rather than trying to land just a few of the more established organizations. This approach would not only get the brand out there, but increase the level of hands-on familiarity with the product among both students and educators. Corps that would participate in this financed model would be obligated to lock into longer minimum terms on any endorsement deals past the terms of the financing deal (corps would not own product, but would lease it... which they would periodically return to Jupiter to resell rather than corps directly.

At the same time, this sort of approach could help strengthen an activity, in turn strengthening their potential educational market.

[DrillmanSop06]

Two seemingly random points just sort of collided in my head and I figured I'd just sort of think outloud in this space (what's new?).

In reading a thread that was discussing accounting practices for open class corps, I started thinking about the unique challenges these up starts have in terms of capital expenditures and the amount of cash they need to keep tied up in assets at times when they could really use that cash and also have limited options for financing.

The hamster started running... trying to think of potential options out there for freeing up cash and examples in other industries that may apply.

I got to thinking about how some brands behaved in emerging markets and how they became more flexible in their approach in order to capture long-term distribution.

I remembered an approach that Mars used years ago in trying to establish themselves in Eastern European retail channels and find some unique advantage over their other multi-national competitors. While their competitors were focused on cutting deals with major retail chains (which were only newly developing in Eastern Europe at the time), Mars took a different approach and focused on all of the small independent retailers scattered around everywhere. Rather than going for the high volume outlets, they chose to be EVERYWHERE they could.

One of the challenges here is that these small shops usually had cashflow issues and couldn't commit to keeping considerable stocks and also had challenges getting any bank finance. In order to effectively capture these, Mars needed to look at the market in a different way. Instead of seeing this opportunity simply as simply an opportunity for retail sales, they needed to consider it a brand building (Mars brands were new to Eastern Europe at the time... and not well known) and as a sort of hybrid marketing opportunity.

What did they do?

They set up a new unit that would finance inventory of their product to these small shops in ways much more flexible than banks could, but structured in a way they could write off some of their losses as marketing expenses. In return for this assistance, they had to sign agreements that were more restrictive in terms of the competitive products they could carry and continued purchase requirements for if they grew past a certain amount of turnover. Out of these small independent shops, some of them turned into chains, while others were rolled up into chains of small retail outlets. In the end, this strategy paid off like mad.

How is this relevant?

A company like Jupiter (using Jupiter because they are trying to break in and provide the full range of instruments.. but could be any) wanting to more solidly establish itself in the marching music space with a new product line could set up a unit to more flexibly finance upstart and less competitive organizations with the goal of getting their product EVERYWHERE, rather than trying to land just a few of the more established organizations. This approach would not only get the brand out there, but increase the level of hands-on familiarity with the product among both students and educators. Corps that would participate in this financed model would be obligated to lock into longer minimum terms on any endorsement deals past the terms of the financing deal (corps would not own product, but would lease it... which they would periodically return to Jupiter to resell rather than corps directly.

At the same time, this sort of approach could help strengthen an activity, in turn strengthening their potential educational market.

You chose Jupiter so you could make a cutesy planet metaphor. Don't lie!

[danielray]

You chose Jupiter so you could make a cutesy planet metaphor. Don't lie!

Catchy titles don't hurt.

How else can you explain Cooking with Pooh?

[SFZFAN]

Please make it stop.

[Michael Boo]

Please make it stop.

Edited October 22, 2011 by Michael Boo

[Luke S.]

Brilliant

[contrajedi8]

Jupiter just needs to concentrate on making less crappy instruments.

[danielray]

Jupiter just needs to concentrate on making less crappy instruments.

Well, Jupiter's goals are simply to return value to their shareholders. This may or may not require they make the best instruments out there. I wouldn't say that Dynasty is any better in terms of quality than Jupiter, they just hired the right talent, made the right deals and cracked the market. A lot of this is marketing.

... which brings up another point with Jupiter, specifically, their Quantum line should just be branded as Quantum (need to drop Jupiter, Mapex, Majestic, etc.)... way too muddy... and they also lose the opportunity to start fresh in terms of perception (guy comments in Jupiter being junk... when they used to suck rocks and now aren't so bad... would be better to go with only Quantum for all... clean slate).

Anyway, I'm up for any manufacturer that could step up and create a more flexible lease model for upstart, open class and corps without endorsement deals. It simply makes no sense to keep that cash tied up. There is an opportunity for an ambitious manufacturer to step in here and become a more pervasive brand, not just one for the top 6.

[DrillmanSop06]

Well, Jupiter's goals are simply to return value to their shareholders. This may or may not require they make the best instruments out there. I wouldn't say that Dynasty is any better in terms of quality than Jupiter, they just hired the right talent, made the right deals and cracked the market. A lot of this is marketing.

... which brings up another point with Jupiter, specifically, their Quantum line should just be branded as Quantum (need to drop Jupiter, Mapex, Majestic, etc.)... way too muddy... and they also lose the opportunity to start fresh in terms of perception (guy comments in Jupiter being junk... when they used to suck rocks and now aren't so bad... would be better to go with only Quantum for all... clean slate).

Anyway, I'm up for any manufacturer that could step up and create a more flexible lease model for upstart, open class and corps without endorsement deals. It simply makes no sense to keep that cash tied up. There is an opportunity for an ambitious manufacturer to step in here and become a more pervasive brand, not just one for the top 6.

My only question is this:

Will your full-time job posting on DCP allow you the time to successfully run Jupiter AND Drum Corps International? Comments?

[danielray]

My only question is this:

Will your full-time job posting on DCP allow you the time to successfully run Jupiter AND Drum Corps International? Comments?

Dear Kind Sir,

We would like to issue to you many thanks for your very welcome suggestion, which has been well received. In response to your very legitimate concerns, a team of specialists in our Banglore facility will now be tasked with the very serious and time consuming responsibility of managing further communications activities for Mr. Ray in this forum.

Kindest Regards,

Sanjeev "Jim" Chattopadhyay