Turning Brand Equity into Shareholder Returns
In many ways 2015 will be a watershed year for Red Witch as it can now truly reach out globally with a suite of well respected and critically acclaimed products.
Red Witch is now at that time and place where it can transition from developing great products, to marketing a full range of world class guitar and bass effects pedals.
Post GFC, there is also an emerging consensus within the music industry about getting back to basics which is the company's focus.
Injecting Capital To Increase Marketing
Historically Red Witch has spent little (if anything) on advertising or promotion, but rather has relied upon word of mouth, and product reviews. In fact, the first paid advertisement was not until the end of 2010.
Advertising spend was increased in the 2014 year, when General Manager, Tracey Neil, came on board. With a very modest spend off an almost zero base, the company was able to turn the sales trajectory around and grow sales over the past two years.
The plan is to increase marketing spend by 450% in the 2016 year over the 2015 year (minimum funds raised scenario), to achieve a 200% increase in revenue.
Then an additional 300% over in 2017.
In the maximum funds raised scenario, the marketing spend continues more aggressively through to 2020.
The marketing programme is designed to give Red Witch's sales an immediate boost by supporting the distributors and dealers with advertising and editorial, and backed up by online content, and the promotion of demos and reviews.
The main new marketing initiative however is a longer-term and innovative Professional Development Course to develop competence among the people at the core of the business, the influencers and gatekeepers; the people who sell Red Witch products, the distribution representatives, the sales people on the shop floors, the people who answer questions for the online shops and the people making online demos.
These Professional Development Courses will be an enhanced and more in-depth version of the successful seminars Ben delivered to Sweetwater's Sales Engineers referred to above (and now Red Witch's number one dealer world-wide).
Use of Funds
As set out above the injection of capital will be used to increase expenditure on marketing. Below shows the use of funds for the minimum funds raised only.
If the maximum funds are raised, it means Red Witch can go deeper for longer in each area of the marketing plan. The use of funds spend on marketing will be proportional up to $700k.
The past two years have shown that very modest amounts of advertising will reap increased benefits in revenue. Increasing advertising in the large global publications, while expensive, has been proven to be the fastest way to boost brand awareness and revenue.
The plan is to give sales an immediate boost by investing heavily in the first two years and then maintaining that awareness in the following years with a reduced percentage of our marketing spend.
International Workshops are the number one support requested by distributors and dealers, and providing these will support the Professional Development Courses. In fact in the first two years video taping these workshops will be an important component for building the online resources for the courses.
Releasing new pedals is a great opportunity to put the Red Witch Story in front of people. A release marketing programme needs to be put around each pedal release to get the maximum exposure and return for the company. In 2015 and 2016 there are two new bass pedals to launch.
Red Witch Website/Online Content: The Red Witch online presence needs modernisation. While the website was state of the art in 2009 it is not compatible with mobile devices and it needs to be moved onto new platforms to enable this.
Red Witch also needs create more video demonstrations targeted to different genres and age groups, which shows the music versatility of Red Witch pedals.
All online content also requires indexing and to be optimised for search engines.
Reviews: From the research undertaken in 2013 around Buyer Behaviour, having online reviews and video demonstrations is a key part of the decision making process when buying a pedal (see Target Audience for more details).
The great thing about the music industry is that literally hundreds of reviews are done on Red Witch pedals without the company being notified; it requires dedicated resources to find these reviews and to push them out as far and wide as possible.
As part of the reviews, Red Witch will endeavour to ensure that the most influential reviewers always have access to the pedals in order to create further online content with others opinions about the pedals and brand.
Over the years Ben Fulton has been able to get Red Witch products into the hands of some key artists. This has provided the brand credibility without expensive endorsement deals, indeed Red Witch has never paid an artist to use a Red Witch pedal.
Guitarists like to use what their favourite guitarists use so having more funds available to do work with artists will allow Red Witch to continue reaching a larger audience.
PROFESSIONAL DEVELOPMENT COURSES - DEVELOPING COMPETENT PEOPLE WHO CARE ABOUT THE BRAND
Looking at the people working in the music industry, in general they are typified by being:
- Passionate about music
- Play music themselves
- Are underrated by the consumers.
The music industry also lacks industry career or qualifications pathways, or even identification and acknowledgment of a specific expertise or knowledge base.
There is a lack of music related professional development courses for anyone working in the retail sector of the music industry, with the exception of some workshops being offered more recently by some of the more progressive instrument companies.
Red Witch, at this stage, is not aware of any retailer training courses for floor effects pedals worldwide.
Brand Leadership Position
The Red Witch brand is synonymous with groundbreaking technology, and this is a perfect 'brand fit' for the Red Witch brand. If anyone in the world has the credentials to achieve this, it's Red Witch.
MDG, the new USA distributors, were so excited when this concept was run past them, not only did they want to do the course themselves, they used the term 'killer idea'.
Key Components of the Professional Development Courses
- Ben Fulton will design the course content. Ben is internationally respected for his knowledge of floor effects and has written columns about the subject for the World's largest magazine Premier Guitar. > Click here to read Ben's Premier Guitar articles.
- The course will be offered online through a series of video seminars and webinars, exclusive to Red Witch authorised dealer personnel.
- Course Completion Awards - participants will receive a pack to acknowledge their successful completion of the course (a premium pedal, a Course Certificate and a limited edition T Shirt).
- Graduates will attain the status of 'Pedal Magus' and be given the limited edition Red Witch Pedal Magus T-shirts, which will identify them on the shop floor.
- Graduates will receive a Red Witch Pedal of their choice. Remember Red Witch products attract a premium pricing at retail, and are of significant value to someone on minimum wage.
- The first Magus course will cover both Red Witch product knowledge and general guitar effects proficiency.
- A second higher level course will be able to be completed 12 months after becoming a Magus, and then a final third level 18 months after that. These courses would focus more on the creative use of floor effects.