Much as I love the new world of social media, Web content, likes, follows and friending, I still like to remember the fundamentals of marketing—which I think still apply quite well to both the new world and old world.
This is a story of target marketing, and a question about what has changed.
Once upon a time—actually it was 1991—a young woman named Heather decided that her favorite mix of spicy tea would be popular in Portland, Oregon, where she lived. She had traveled through India and liked a spicy tea common there. She’d created her own mix, a specific spicy tea served with hot milk. It was sweet, spicy and caffeinated. She called it Oregon Chai, a reference to the word chai, which I understand is Hindi for tea.
What I like about the story is how specific the startup marketing was. This was in the mid-90s, so the Web was there, technically, but it wasn’t what it is today. Given the problem of introducing a new hot drink to spice up mornings, Heather focused entirely on point of sale marketing.
First, she and her small entrepreneurial team started showing up at a central spot in Portland where drivers gathered with distribution trucks before taking off for a day of distributing goods sold in local coffee shops: snacks, muffins and so on. They came with trays of steaming hot Oregon Chai, which they offered for free to the distribution truck drivers. A lot of the drivers liked it. Some switched to Oregon Chai in the mornings instead of coffee. Almost all of them liked the Chai people.
Second, they visited specific coffee houses, one by one. Portland, in the heart of the great American Northwest, is full of coffee houses. It’s hard to find a city block that doesn’t have one or two. So the Oregon Chai people brought steaming hot cups of the product and gave them to people on both sides of the counter.
With that came the point-of-sale posters, which were, quite literally, exactly that. As coffee houses in Portland started to like Oregon Chai, and drivers and baristas started recommending it, the fledgling company made posters advertising the new product that were easy to put on a wall, and smaller reminders about the size of a pocket book, which were easy to put on a counter near the cash register.
And so it was that a new and innovative hot morning drink, without a lot of funding, with no advertising except point of sale reminders, became a huge success. Within three years it was selling more than $3 million annually.
First, I like it because it had extremely economical, and extremely successful, target marketing built in: Oregon Chai wanted to reach people who would pay a couple of dollars for the tall steaming cup of it in the morning. To find them, it went first to the distributor drivers, then to the retail counters. The marketing reached only the people it had to reach.
Second, there was no wasted effort, and no wasted money. They spent no time spraying messages over the heads of large numbers of people, many of whom wouldn’t have been in their market. If you weren’t standing in line at a counter offering Oregon Chai, you didn’t know about it. And no money had been spent on shouting out to you.
As the company grew, its marketing changed. A few years later it was trying to sell packaged mixes in super markets, and the message would appear in larger circulation newspapers and magazines. It was also sold to a larger company, leaving Heather and her early entrepreneurial team to tell stories of the initial ramp-up.
So that’s a marketing story, and not an Internet marketing story. There was no online dimension. I think it’s a great example of the fundamental principle of target marketing, why that’s important, and why it’s often the best way, by far, for a startup to build sales.
And I wonder what the equivalent would be today. I’m guessing it would be new tools, new methods, but similar principles. Does this story relate to the lunch carts using Twitter to announce their locations on routes during the day? Is the modern equivalent having the blog, Twitter, Facebook and Google+ accounts? I wonder about the modern mix of new tools with old fundamentals.
What do you think?