Ideas are Currency

By Peter Granata, president, Granata Design  — Does success follow a company that decides to replicate or assimilate someone else’s products? Imitation is the sincerest form of flattery but will it be competitive?  Every time a company elects to take the easy way out and copy a someone else’s idea, aren’t they forced to compete on price alone?

When a company copies what is popular they can only expect that a small percentage of the market will be attracted to their product, either because it’s out of brand loyalty, or convenience, or price. (Read that again, a small percentage of the market.) If one is really trying to do the best thing for their company’s stakeholders, one would endeavor to succeed in the market with the least amount of competition. It’s about creating distinction. And it’s about building a good reputation.

In many cases the niche market offers more opportunity for success than the broader market.

Success in the specialty arena allows better profits, does more toward establishing brand loyalty, and distinguishes the company in ways one could never afford to advertise with the press. It allows one’s company to stand out from the rest.

Not to be overlooked: by competing in a niche market one sends a very energizing message to the workforce, a message that encourages them to explore and find unique ways in which to make the company and the product more successful.

The companies that continue to replicate what someone else has already brought to market do not have a future in this economy. For proof, look at China and how it’s affecting our markets. Anybody with a business sense and a valid passport can travel to China and within a reasonably short time find a company that will be willing to replicate anything we sell here for less money.

At this moment the advantage goes to companies here in the States that continue to research and develop new and unique product, or at least, updated product every year. We have that advantage because each new model year we can create something new to offer the market. The copycats will take those good ideas to China and have them built for less by the next model year. That means the product they sell will always be a year old.

Old product that is cheaper may have its advantages, but it also speaks volumes about how and what your company thinks of its customers. That’s a message that no one wants to broadcast.

In case you haven’t already decided to change the way you do business, now may be an excellent time. Invest in the Research and Development you need to lead your niche with new product opportunities.

Innovation = Ideas! These are the currency in today’s business world. Invest wisely.

Boating Industry Magazine July 27, 2010 

Why new boats were originally introduced in July

By Peter Granata, president, Granata Design  — Before history gets rewritten, I wanted to offer a glimpse into why new boats were introduced in July rather than September.

There appears to be some momentum behind introducing new models in September rather than July. Some who are calling for the later introduction appear to be attributing the early introduction to the manufacturer’s greed. To be fair, you should know that boat manufacturers started introducing new boats in the middle of summer at the request of the dealers.

What happened “decades ago” was that local banks controlled the floor planning for local dealers. At the end of the typical selling season, in the fall, the banks would send out someone to do a physical inventory of what boats had not sold by checking the serial number on the boat for the model year number. If a boat was determined to be “unsold” for that model year the dealer was required to pay a curtailment to the bank of an additional ten percent.

The banks, in essence, forced the dealer to demand from the manufacturer an early release of new models so the dealer would not to be forced to buy “old” inventory when he needed it in July or August and pay a curtailment.

In the current economic climate, it might make sense to hold the release of new models until the end of the summer selling season. Maybe. You have to be the judge as to how it would impact your business.

My sense, however, tells me that once sales return to a quicker pace, we may well want to return to buying new boats in the middle of summer. After all, if and when you need to replenish your inventory it only makes sense to floor plan a new product versus a product that will be out of date in 30 days.

They say we are doomed to repeat history when we fail to take notes. I just thought I’d pass along this note. So noted.

Boating Industry Magazine May 14, 2010

Lower Price vs. Higher Design

By Peter Granata, president, Granata Design  — If the product you are selling needs a price cut in order to sell, then it’s very likely that the design appearance of the product does not measure up to the asking price.

We base almost all of our choices on how something looks! From spouses, to houses, to cars, to boats.

“That looks expensive” or “That doesn’t look like it’s worth it” are only two common refrains that you often hear when a judgement is based on something’s appearance. We, as consumers, make those judgements every day. Yet when a manufacturer decides on what he will build, does he “settle” or “strive” on the appearance? If he “settled” then it’s very likely that the design of the product does not measure up to the asking price. If he has simply waited too long to redesign the product, the impact to the consumer is the same. The product just doesn’t measure up.

Good design is the only tool that can elevate a product in the hierarchy of product desirability. Bad design, in turn, will denigrate it to a point to where the manufacturer of the product needs to lower the price of the product. However, excellent design creates a sharp-looking and appealing product that can cut across price points with “gotta have it” desirability.

So, take a look around your showroom, does anything need to sell for less? If so, contact your manufacturer immediately and tell him you need a design increase or a price decrease.

In this economy, as with every economy before it, product is king.

Boating Industry Magazine April 19, 2010

Small Dealer, Big Idea

By Peter Granata, president, Granata Design  — If you’re a boat dealer and you’ve managed to survive this downturn, now is the time to consider what you must do to thrive. One question you will have to ask yourself is, “Do I, and will I, have the right product at the right price?”

Answer this with the understanding that when the values of a people are shaken as hard as they have been over the course of this recession, the ideas of how they spend their time and money will change. In order to answer the question, you must analyze your product line offerings.

First, do you have the right mix of boats for a changing and future market? Do the boats you have on your floor right now reflect and respond as to how they will enjoy boating in your area in the future? Will your sales be dominated by fishermen? What kind? Maybe your market will begin to cruise more, or maybe the changing demographic will involve themselves more with water sports.

Second, are your boats priced competitively with other dealers’ product offerings in the area? Is your product priced in line with what your awakening market will bear?

Third, and lastly, whether you are satisfied or not with your current product offering, you have to determine how these boats will need to change and stay relevant in the future because the future will define how successful you will become. Do you think the manufacturer is accurately planning for your boats to advance along with the aspirations of the new consumer?

In many cases, the boat manufacturer will listen intently to the requests of their largest (sales) dealer. Too often, they ignore the opportunities available to them in a market that has a greater potential than the one represented by their “largest” dealer. Is that you? Are you one of a group of smaller dealers that could provide real growth to a manufacturer? If you are, then consider banding.

As a small volume dealer unable to capitalize on the volume purchase discounts some manufacturers provide to their largest customers, this may be the time for you to band together with one, two or three other dealers of like mind and circumstance. Create your own buying group to capitalize on those discounts and gain an influential voice in the product’s future. The benefits outlined by banding together a small group of selling dealers can be endless, and you don’t all have to be in the same area.

Now is the time to take an aggressive measure to not only to make a smart business move coming out of this recession, but also insure the future of what you have worked so hard to protect over these last months and years.

Move forward. Surprise the future. Band together.

Boating Industry Magazine March 29, 2010 

Just Thinking

By Peter Granata, president, Granata Design — Ever notice how some leaders look at things individually rather than as a whole? They look at the numbers of the business but not the business overall. They focus on the problem, not what is causing the problem. They look at the way things have always been done in their industry but not the way other industries are accomplishing their goals. It’s called “not seeing the forest through the trees.”

An example of a narrowly focused executive might be a boat manufacturer (this actually happened) that had a business audit which showed that there’s a lot of money being spent on “patch & repair” to his boats at the end of a production line. The solution is not to fire the people that are patching and repairing the boats, the solution is to find a way not to damage the boats as they move through the production line. Sounds simple, but you’d be amazed at how the obvious escapes some people.

Business owners in the boating industry always have to look at their business in its entirety in order to survive and prosper. If there’s an area of their business that’s costing too much, or simply losing money, business owners back up and take a look at the whole picture.

Because we’ve endured a great recession, many of the boat dealers that this industry have counted on to “move the merchandise” have closed their doors. No money. No money available through banks, nor lending institutions, in general not enough money to continue operating. When dealers are not available to create the sale, our industry sputters.

If we stand back, however, and look at the big picture there may be other opportunities that we can “tap” into.

Recently, there are more than a few automobile dealers that have been disenfranchised by the very company they represented. Specifically, they are dealers who have local banks that want to work with them, they have showrooms and service areas, and they know how to sell product. Many of these dealers are all “dressed up” with nothing to sell because the product line that they represented has been taken away from them.

What if the leaders of our industry bond together and make an earnest marketing effort to draw in these disenfranchised dealers, and teach them what they need to successfully sell and service boats? After all, they need something to sell and we have the perfect product to put them back to work.

Just a thought.

Boating Industry Magazine February 23, 2010 

Regifting

By Peter Granata, president, Granata Design — December 17 is National Regifting Day. For those of you not familiar with the practice of regifting it is described as the act of taking a gift that has been received and giving it to somebody else, sometimes in the guise of a new gift.

To paraphrase Jeff Foxworthy, If this sounds like something that you might have on your floor plan, you might be a boat dealer.

Finance companies have been “regifting” inventory from dealers that have fallen on hard times, thereby virtually drying up much of the production of brand new boats from manufacturers.

Now comes the ripple effect. At some point the current inventory in dealer’s yards will give way to this year’s “new” product directly from the boat manufacturer. Question: How different do you think it will be from the “regifted” boats that are selling at heavily discounted prices?One unfortunate repercussion from this economic upheaval will be that much of the “new” product will look very much like the old product throughout the next year. Product is always expected to drive sales. This time it’s different.

If we’re going to get out of this slump, we’re going to have to rely upon the dealer organizations to sell our way out of it. The real salesmen of our industry will have to stand up and defend our future. They are the cavalry, but as in any good fight one would hope reinforcements are on the way. Dealers want to make darn sure that their manufacturer is preparing some solid products to be introduced in the very near future. And please, no regifting. Saleable product has to be either inexpensive or unique, a successful product has to be both.

After everything a dealer will go through during the upcoming selling season, he’s going to need the next round of new product to fit the new demands of the changing consumer. Smaller outside, larger inside, fuel efficient, towable, cost effective, and most of all, unique. Unique, because the customer is smart enough to know regifting when he sees it.

Boating Industry Magazine, December 11th 2009

Are we There yet?

By Peter Granata, President, Granata Design  — There comes a time in everyone’s business life when we are faced with having to make a critical decision that requires action. We’re getting very close to being “there.”

Many of us will have to decide if we are going to aggressively pursue sales during the upcoming selling season, or continue to wait until something happens. In choosing to wait, we may be deciding upon an inglorious end to our business.

Most of the industry has conceded that the 2009 selling season was a bust, and so far, I haven’t found anyone who wants to repeat THIS year!

It’s nearing the time to sing or get off the stage. The 2010 selling season begins next month, starting with the boat shows. If you’re a dealer, it’s time to clean up that inventory and try to put on a fresh face; if you’re a boat manufacturer, you might want to be working on some exciting new product for next year.

Human behavior being what it is, most of us will be looking forward to the holidays and the time off from business worries.

Once the holidays have passed, I anticipate that the beginning of the new year will bring a flurry of activity from many dealers and boat builders alike. Sort of like a poorly organized fire drill. Unless, of course, you are one of the few that have planned for your future instead of just waiting for it to happen.

It’s December, please remember you’re just around the corner from being “there.”

Boating Industry Guest Blog December 2009