Newsletter: Farrier Industry Report | May 2009

Marketing: Making the Case for Long-Term Thriving and Surviving
By Lynn Switanowski-Barrett, Creative Business Consulting Group

Why do small businesses fail? Sometimes it’s owner-related. Sometimes, it’s competition. But more often than not, it’s because owners/managers lost sight of their niche in the marketplace.

In other words, they didn’t tell potential customers what their business provided.

Do you want your independent pet shop to fall prey to the same fate? Probably not. So, let’s start with a basic premise: Marketing is a part of nearly every business decision you make. Frankly, it’s the most important thing you can and will do to drive sales and profits. (So it’s worth spending some time on, right?)

Marketing is a strategy for allocating your resources (your precious time and even more precious money) in order to achieve key objectives for your business (mainly, earning a fair profit for supplying products and services). Yet, the most brilliant strategy won't help you earn profits or achieve your wildest dreams if it isn't built around potential customers.

To help focus your strategy, marketing experts have created the “Four P’s.” Whether you’re a seasoned pet retailer or a beginner, understanding each one of these components will make your business much healthier in the long run.

Marketing decisions generally fall into these categories:

1. Product
2. Price
3. Place (distribution)
4. Promotion

These four P's are the parameters you can control. The goal is to make decisions that create perceived value and generate a positive response.

Product Decisions
Based on your target market, your product decisions will vary annually, sometimes more often. Examples of product decisions to be made include:

• Brand name
• Functionality
• Quality 
• Packaging
• Services
• Price

Pricing Decisions
Choosing the right pricing strategy and monitoring it often is crucial. Consider:

• Pricing strategy (skim, penetration, etc.)
• Suggested retail price strategies
• Volume discounts and wholesale pricing
• Cash and early payment discounts
• Seasonal pricing
• Price flexibility
• Price discrimination

Pricing can be complex. The key is to understand how pricing affects each component of your business and determine a strategy that integrates each piece and allows you to maximize profits. Keep in mind that you may end up with different price points for the sales and service parts of your business. While it may be confusing to implement at first, knowing a clear direction will lead you to a clearer path for increased profit margins down the road.

(Place) Distribution Decisions
Distribution is about getting products to the customer. Traditional retail distribution channels are constantly changing and news ones are being introduced. This is great news for even the smallest independent retailers who have more options open to them to sell goods and services. Examples of distribution decisions include:

• Distribution channels (Internet, affiliates, TV, etc)
• Market coverage (inclusive, selective or exclusive distribution)
• Inventory management
• Warehousing
• Distribution centers
• Order processing
• Transportation

Where and how do you distribute your products and services? Are there opportunities to expand based on where your target customers are shopping and looking for your services? Should you think about a temporary location during key times of the year that could generate additional revenue for your pet shop? Are there other avenues to sell your products in the local market or to partner with another business that has a Web presence that reaches your target audience?

When it comes to distribution, small retailer or not, you must think outside the front door of your shop to maximize your sales and profit opportunities.

Promotion Decisions
In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response. Marketing communication decisions include:

• Promotional strategy (push, pull, etc.)
• Advertising
• Personal selling and sales force
• Sales promotions
• Public relations and publicity
• Marketing communications budget

Inherently, retailers know they must promote their products and services to reach their intended target audience. But it’s the one area of the business that is most often taken for granted. It’s also an area that needs the most attention. Gone are the days of placing a Yellow Page ad and watching customers flock in the door. Be thoughtful with your promotional strategies to ensure that your shop becomes the destination, both in your local market and far and wide.

The bottom line as it relates to the Four P’s of marketing your business is this: Each component requires your time and attention to create a comprehensive marketing strategy. Assuming you take the time to do so (or partner with credible experts to help you achieve your marketing goals) you will position your business in the most positive light to attract customers and drive sales and profits for years to come.

Lynn Switanowski-Barrett is the founder of Creative Business Consulting Group, a retail consulting firm based in Boston. CBCG works with small businesses of all size to create and implement profit improving sales, marketing and inventory management strategies. For more information, call (617) 437-9191 or e-mail lynn@cbc-group.net.

» back to the top

Letter from the President
One of my main objectives upon assuming the office of FIA president was to see FIA rise to the next level — that being the level of influence in the horse industry FIA is due. You know the adage, “no hoof, no horse.” Let’s take that a step further: “No hoof care, no hoof, no horse.” Or how about “No hoof care products, no hoof care, no hoof, no horse.” Get my drift? This objective, however, has been more of a challenge than I initially thought.

We have started some marketing efforts and revamped our Web site. However, a key vehicle in this ascension is a viable management firm. This is one area your elected officers and board have been dealing with this past year. About a year ago, negotiations with our previous firm PDRA were breaking down. The FIA governing board was not pleased with its performance and did not agree with the compensation PDRA was seeking.

At this point, before the existing contract expired, an ad hoc committee was formed with the directive of finding a new management firm. A request for proposal was submitted through the AMC Institute, whose members are association management companies. Close to two dozen proposals were submitted. The selection committee narrowed the proposals to three firms, recommending The Sanford Organization (TSO) as the new firm. The board, after deliberation, approved this recommendation and hired TSO as our management firm. In June 2008, the four elected officers and board representative Frank Dugan (having the most tradeshow experience and to save costs) went to the suburbs of Chicago for a transition meeting. We were duly impressed with the humble but seemingly more-than-adequate staffing to help FIA move forward.

We were not on a set expense with TSO but rather an hourly pay scale (lesson No. 1). Lack of clear expectations and communication were problems on both sides. There was a definite learning curve involved for all of us, but we could envision the potential.

In mid-February we were told that because of the economy, our account executive would be leaving TSO after the convention. We felt this was a good time to once again investigate management companies.

The board invited the two finalists (from the selection process in 2008 to the convention in Chattanooga to meet with us and submit new proposals for consideration. After returning home, the board held several lengthy conference calls and saw proposal revisions. In the end, Affinity Resource Group (ARG) was chosen as the new management firm. We were also able to negotiate with TSO and have them waive all staff service charges for January, February, March and April, making up for what we felt were higher than expected charges in the past.

ARG took over on May 1st and it is apparent the lines of communication have improved. It is obvious that ARG realizes that FIA’s success is also theirs. I’m looking forward to working with ARG and can’t wait for all of you to meet Jean Weiss, our new account executive. This group has a lot of positive energy and is quite excited to oversee the running of FIA.

I want to thank the governing board of FIA for sticking with the long-term goals, during these trying economic times, in seeing this association rise to the next level. If you have any questions on the matters described above, do not hesitate to call your elected officials or me. These folks have spent some long, hard hours for you this past year. Be sure to thank them if you have the opportunity.

Bob Bachen
President, FIA

» back to the top

MarketPlace Report
As co-chairs of the MarketPlace Committee, we would like to give special thanks to the exhibitors, FIA board members and the American Farrier’s Association — especially the Georgia and Tennessee chapters for participation and outstanding support in the 2009 MarketPlace in Chattanooga. It was a pleasure working with you, and we are looking forward to continued success in Portland, Ore.

We believe the FIA luncheons provided during this year's MarketPlace were a huge success. Please let us know your thoughts regarding future luncheons and any suggestions you may have by calling or e-mailing either of us.

We’re excited to begin planning for 2010 and look forward to working together with you in Portland. We’ve discussed with many of you the pros and cons of hosting Horseman’s Day on Saturday and have elected to discontinue offering Saturday MarketPlace for the 2010 Convention. This month, Emily will travel to Portland for a location site visit. Following her return, we will provide you with lodging and dinning information, and the many attractions surrounding Portland.

The AFA Convention Committee has asked us to share with you that the theme for the 2010 convention will be “Back to the Basics” and they have confirmed eight speakers.

Sincerely,
Emily Bull and Marguerite Page

A word from Greg Johnson, convention coordinator for the  American Farrier’s Association:

“As Convention Coordinator, I would like to thank the FIA for its support in the way of sponsorship, the free lunch during the MarketPlace, the help with Horseman’s Day and the good working relationship the AFA has with the FIA.”

» back to the top

Affinity Resource Group
Affinity Resource Group is your new management team. The five-person staff, which includes Jean Weiss, Mary Lea Nations, Teri Smith, Bertinna Dubra and Maribel Melo, has more than 80 years of combined experience in association management, finance and business.

ARG is located in Clinton, Miss., just outside of Jackson, where FIA was founded. The firm specializes in managing and growing small to mid-sized associations and takes a hands-on approach with its clients.

Jean Weiss is FIA’s primary account executive, overseeing all management of the association’s needs. She will report directly to the FIA Board of Directors and work with committees members. Jean has a special interest in working with FIA, as she grew up riding and showing horses and managed a 40-head herd as summer equestrian director for a large youth camp during college.

Mary Lea Nations will serve the secondary account executive for FIA. She is skilled in daily organization and management, as well as long-range planning for associations, which will be a great asset in the overall management of FIA.

Teri Smith will act as FIA’s office administrator, responsible for the FIA financial and bookkeeping records, and accounts payable and receivable. Bertinna Dubra and Maribel Melo will provide program and membership support.

Jean and Mary Lea visited the Marketplace in Chattanooga and the staff is looking forward to working closely with board, getting to know members and learning more about the industry. Call or e-mail, introduce yourself, and share any thoughts or recommendations on growing the FIA membership and Marketplace.

FIA Contact Information
Farrier Industry Association
134 Fairmont Street, Suite B
Clinton, MS 39056
Phone: 601-924-3495
Fax: 601-924-0720
info@farrierindustry.org

» back to the top

Introducing Michelle Nicolaides, FIA Treasurer
My name is Michelle Nicolaides and I would like to introduce myself. I have been a member of the FIA since 1999. I volunteered and was selected by the board to fill the position of treasurer, formerly held by Steve Hoselton, who was unable to carry out his term. Due to the unconventional way in which I became your Treasurer, I did not get the chance to provide the membership the usual information about me, my experience or my ability to fulfill the requirements of the position.

I have been in horse-related retail management since 1989. I am the President of Empire Farrier Supply in Temecula, Calif., which I started in June of 1999. I am also serving my fourth term as the treasurer of the California Business Condo Owners Association. I consider myself a fiscally conservative individual who believes that teamwork, good management, and high expectations are all part of running any successful organization.

I am sure our association, with the efforts of the board, management associates and members, can make the FIA grow and flourish in the coming years. As retailers, wholesalers and manufacturers, we can come together to form a strong network for the betterment of our entire industry and our individual businesses.

I look forward to serving as treasurer. Thank you for your consideration.

Kindly,
Michelle Nicolaides

» back to the top

Treasurer's Report
Having been on the FIA board for such a short period and with the current transition of management, I do not have a full report at this time. I am closely overseeing all financial activities taking place and will be able to provide you with more information in the near future. Our previous accountant has provided me with some information that I can pass on to you.

“The net assets (reserves) at the end of the calendar year (now our fiscal year) represent 80% of our annual operating revenue and that is a very good position to be in based on association standards.”

Based on the financial reports provided to me, I do concur with him.

Our levels of reserves are good, and our financial position is strong. The board has been working hard to improve our management structure and the transitions taking place have been very smooth. We will always make our best efforts to ensure that the association dues and reserves are protected and used to improve the organization with benefits and services that our members need and want. We will be focusing strongly on increasing our membership and involvement. The potential of this association is great and can be an asset to everyone in the industry.

Sincerely,
Michelle Nicolaides

» back to the top

FIA Minutes
Farrier Industry Association
Membership Meeting & Breakfast
Friday, February 27, 2009

8:35 a.m. Bob Bachen welcomed the members to Chattanooga.

Bob introduced Scott Colson as one of the founders of FIA. He also introduced the FIA board members. Among the many things accomplished this year are a revamped Web site, advertising and marketing for the AFA convention and FIA MarketPlace, and co-op advertising with the AFA promoting Horseman’s Day. Bob thanked American Farriers Journal and Professional Farrier for their help in our advertising campaign.

Awards: Director’s awards were presented to Marguerite Paige, Steve Hoselton, Remco van der Linden and Emily Bull. Industry awards were presented to Bob & Phyllis Peacock, Herb Buecher, and Don McGinn for their contributions to the farrier industry.

Business Reminder: The newsletter is e-mailed, faxed then snail mailed to companies, depending on which each company has available.

Secretary’s Report: A motion was made to accept the minutes as presented in the newsletter by Dave Erb. Seconded by Frank Dugan. Minutes approved as presented.

Treasurer’s Report: Steve Hoselton reported we have a current balance of $126,993 and about $6,000 in outstanding checks. This is before expenses have been paid for the convention and other regular expenses. There have been increased costs in 3 areas: management company, advertising, convention lunches. The management company expenses are higher than anticipated and we are getting those details.

Discussion followed as to additional expense for the management company. Steve reported that those expenses are being investigated at this time.

A motion was made to accept the report as presented by Bob Peacock and seconded by Remco van der Linden. Treasurer’s report was approved as presented.

Bob Bachen reported that the FIA switched management companies from PDRA because the performance was very low. When we changed, the bookkeeping wasn’t in order. We are researching our costs as well as other management options.

Bylaw Committee: No report.

Business Conference Committee: We are potentially holding a conference in the fall in Las Vegas. We are working on hotel options, the program and exploring dates.

Marketing Committee: Tab Pigg is the chair. Representatives of Dirt Road Media told members about the new products spotlight and options for having press releases on the site. They offer all FIA members a 10% discount on services.

Benefits Committee: Alice Musser reported the committee has been exploring more benefits for the FIA members. Many of the newest benefits are on the Web site including insurance options. Anyone with suggestions for benefits should contact a member of the Benefits Committee. The Committee consists of Mike DeLeonardo, Jan Bloom, Molly Franco and Alice Musser.

MarketPlace Committee: Marguerite Paige and Emily Bull are co-chairs. They reported a smooth move-in with 113 booths and 78 companies. Future conventions are: 2010 Portland, Oregon; 2011 Lexington, Kentucky; and 2012 Mobile, Alabama.

There was a buffet lunch for vendors on Wednesday. Box lunches will be provided on Friday for all vendors and attendees.

There will be vendor demos on Saturday. These are free to vendors, although all the time slots have been taken. They will be in the rear of the tradeshow to encourage attendees to walk through the exhibit hall.

The Georgia and Tennessee farrier associations did an outstanding job of helping. Exhibit hours were reviewed. Exhibitors were reminded not to block the ramp during move-out on Saturday.

Elections: Lee Green announced the new officers:

Vice President – Marguerite Paige
Treasurer – Steve Hoselton
Director – Dave Erb
Director – Emily Bull

Steve Hoselton announced that he is not accepting the treasurer’s position. Bob Bachen asked that interested members submit their name in writing to Lee Green within the next two weeks.

New Business: Bob Peacock offered his traveling museum to the FIA, requesting that it not be disassembled. The FIA thanked the Peacocks for their generous offer. Bob Bachen will follow up to see how this can be accomplished.

A motion was made to adjourn the meeting by Remco van der Linden, seconded by Marguerite Paige. Meeting was adjourned at 9:20 a.m.