The Incredible Vitamix Story and the Barbell Marketplace

After visiting the liquidation segment of the market last time, for the final blog of the year, I will return to our true mission at TempPro Marketing Solutions Inc. which is creating mid-high to high end profitable businesses.
A constant theme at companies through my career has been the constant and sometime elusive search for success at the premium segment of the market. From the attempt of Sanyo to use Fisher as their high end brand (not successful) to Black and Decker in power tools moving to DeWalt (unbelievably successful) most Marketing groups I have worked in have spent significant sums of time plotting ways to achieve this progression.

Vitamix Booth
The market has evolved to a barbell with the low cost on one side and profitable premium products with accompanying value on the other. The middle has become nowhere land – never good enough to compete with the best and often too expensive versus the value segment. I believe it to be true that over the last 30 years society has split into “haves and have nots” with a more distinct wealth gap, especially in the US. But marketing to the premium segment is more nuanced than that simple explanation. Baby boomers in particular have grown fatigued with disposable products. No product has embodied this trend more in the last year than the Vitamix blender.
On my first trip to China, I was developing a blender that could retail for $39.99, Target FOB cost $13.00 to compete against the Sunbeam blender line, the dominant volume brand then and probably still today. In 2015, we bought a Vitamix from The Shopping Channel for over $500, becoming the 3rd household in our extended family to do so. I admit that paying $500 for a blender after all my experience in the industry took some time to process. If we are going to upscale, why not a Cuisinart or Kitchen Aid for $200? Happy to report, no buyer’s remorse and in fact quite the opposite, I found remarkable value and customer satisfaction.
Using Vitamix as a case study, let’s break down some of the elements which make a successful premium product:

  • Outstanding Quality. Not just words – marketers are confronted throughout their development projects with decisions about quality. A component imported from Europe, a higher grade of material, a name brand motor or control: these are all decisions which impact the life span of your product. Obviously the Vitamix is a 10/10 here. It is truly commercial grade quality at home.
  • Reframe the Comparison. You want the consumer to compare your product favourably to something with highest price and perceived value. While the price of the appliance is significantly higher than average, it is a tool which enables you to make professional smoothies and other foods at a fraction of the price of buying it prepared. It also has many functions because it replaces a number of other products. This further establishes value in the consumer’s eyes.
  • Demonstrate and Sell. The high end requires an explanation of the value proposition. Knowledgeable staff at Williams Sonoma. Demo booths at Costco and Whole Foods. In our case it was TV shopping. We even watched the next appearance cycle for recipe ideas.
  • Pricing is Key. However, not in the way we have been automatically programmed. Here, when in doubt go up. Many premium brands in small appliances have been successful just because they push the limits of what consumers will pay for products. Be bold but back it up with value.
  • Make it Affordable. When you use the TSC Easy Pay program of 12 easy interest free payments of $42.00, suddenly $500 is more attainable to a larger group.
  • Brand Integrity. I don’t think you will be seeing low price line extensions from Vitamix any time soon. A brand that aspires to premium status must never comprise these attributes in price, quality, distribution. Make sure those online reviews and weekend flyers support your brand in the long run. Don’t give those flagship resellers a reason to doubt you.

At TempPro Marketing Solutions Inc. our mission is to create separation from the futile race to the bottom. As “custodians of the long term” we can help you in short or long term engagements build your business on the lucrative side of the barbell.

Barbell-Effect

 

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  1. A.J Riedel says:

    David,

    Really well thought out article. Another factor in Vitamix’s success is showing discipline in channel strategy, specifically, choosing to not sell through mass channels. Instead of chasing unit volume, they are focused on profitable sales. Many in the housewares space seem to think getting distribution in Walmart is the end all be all. Instead, they end up on the wrong side of the barbell.

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