From the Business Journal serving San Jose and Silicon Valley, December 17, 1999, Strategies, page 29
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Golden Marketing Opportunities
Companies capitalize on Y2K, millennium publicity
By Sarah Hazelwood, Business Journal staff writer.
Not all Y2K news is bad news. When the Silicon Valley Confection Company launched its first product, a chocolate ladybug, in May, it was to commemorate the dreaded computer bug. “Good marketing is opportunistic,” explained Griffith Lindell, a partner with DRB Partners Inc. in San Jose, and president of the Silicon Valley Association of Advertising Agencies. Given the high visibility surrounding Y2K, it is no wonder companies are capitalizing on the publicity.
Y2K hysteria pays off.
About three years ago, Al Abrahams and Rich Yacco decided to start a candy company. They spent two years creating a business plan and raising funds through private investors. But a key ingredient was missing: a product design. “It was suggested that we come up with something that works from a marketing standpoint, and it was apparent that Y2K was on people’s minds,” Mr. Abrahams said. The duo initially had trouble rounding up investors, but “once Y2K was brought up, it piqued people’s curiosity,” he said.
Mr. Abrahams, former director of corporate support at San Jose Public Television Station, KTEH-TV Channel 54, used the contacts he had made at the station to spread the word about his new company. And Mr. Yacco, who has a background in media and graphic design, worked on the product design, sculpting a prototype out of a Play-Doh-like material. In searching for a company to manufacture the candy, the partners were referred to, and ultimately chose, Hayward-based Knudsen’s Candy, which has manufactured chocolate for 27 years.
Knudsen’s publicist helped Messrs. Abrahams and Yacco craft their first press release, sent to the media. In their second marketing campaign, Messrs. Abrahams and Yacco distributed about 5,000 faxes and postcards to contacts made at a gift show on purchased lists. Silicon Valley Confection’s first client was the Tech Museum of Innovation in San Jose. In fact, the chocolate critter has the distinction of being the only food item sold at the Tech. “It’s selling great. People love them because they are quite a novelty,” said Tech Store manager Linda Chalmers. “The museum has sold about 350 of the chocolate bugs since early summer,” she said. In addition, Nordstrom department stores began selling the bugs before Thanksgiving. And Nob Hill and Raley’s grocery stores also carry the product, which has a suggested retail price of $4.99. The product is now available in 22 states and internationally.
The chocolate bug achieved even greater fame when it was put on display at the Millennium exhibit at London’s Museum of Science. However, that doesn’t mean it’s easy to crack the food market. “It’s a challenge, but it’s a matter of having a good business plan,” said Mr. Abrahams. “It’s a fluid instrument and we’re always honing it.” The company’s next product will be a chocolate motherboard in honor of the Valley’s chip industry, Mr. Abrahams said. The company again hopes to capitalize on an existing phenomenon, silicon chip heritage. “We’re creating something recognizable by many people,” he said.
Millennium Madness
The Silicon Valley Confection Company isn’t the only company hoping to capitalize on year-end hysteria. The Rod McLellan Company of San Mateo, a 102-year-old company, began working on a new orchid, officially dubbed the Millennium Orchid, in 1993. “Since it takes so long to grow an orchid, you need a lot of time to make it work,” explained Vice President of Sales and Marketing, Laura Munro. “Although McLellan has named orchids before, it does so sparingly. Rather than flood the market, it waits for a special opportunity.” “We wanted to mark the millennium with something outstanding,” Ms. Munro said. “About 20,000 millennium orchids were grown, a limited edition of sorts. The orchids, available for about $25 at McClellan’s three stores and through mail order since November, will bloom around Christmas. No sales figures were available by press time, but Ms. Munro said the orchid has been extremely popular.”
Will it work?
For Silicon Valley Confection and Rod McLellan, marketing efforts tied to once-in-a-lifetime events have been successful. But experts warn it’s not a sure-fire approach. “It depends on the company’s strategy, whether you’re putting all your eggs into the millennium basket,” said Mr. Lindell. “If it’s done in a vacuum, it’s not in the long-term interest of the company.”
You can reach Ms. Hazelwood at shazelwood@amcity.com
AT A GLANCE
Company: Silicon Valley Confection Company
Address: 1767 Valhalla Court, San Jose
Phone 408-248-4553
Website: www.svc2.com
Company: Rod McLellan Company
Address: 914 S. Claremont Street, San Mateo
Phone: 650-548-4452
Website: www.rodmclellan.com