MovieChat Forums > The Profit (2013) Discussion > I like Marcus, but there's ONE thing I t...

I like Marcus, but there's ONE thing I think he's wrong about

posted 9 years ago by misterbfd
23 replies | jump to latest

There's nothing wrong with specializing in a certain segment of the market. He always seems to want to "mainstream" the businesses and make them all things to all people. Personally, I have no problem with a business that specializes in a certain type of pet foods, or a business that sells only high-end gazebos. Marcus wants these businesses to appeal to a broader market, but I don't think that's necessarily the best path for all of these businesses.

I'd rather sell fifty $30,000 gazebos a year than one hundred fifty $10,000 gazebos per year.

[–] duckyslattery 9 years ago

I agree. The pet food store was a good example. They were making money already.

Maybe it's because it's retail and these businesses are in middle class areas. Plus I think his plan is to franchise some of these businesses.

But the gazebo business sounds like an online business so keep the prices high.

[–] 9 years ago

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[–] misterbfd 9 years ago

I think Marcus wants to go "mass market" with everything. So from a pies perspective, becoming the market leader in one specific pie that you sell locally and ship all over the world is a good approach for that business. Similarly, he wanted to expand the number of dog food brands the pet food store sold, because they're doing a handful of local stores. I get it.

That said, specialization, in my view, has a great many advantages that Marcus isn't really looking for. Like the gazebo business. I think selling their gazebos at True Value hardware stores kind of takes away from the sort of "elite" gazebo status they had built.

I'd rather sell a few really expensive gazebos than a ton of cheap ones. But Marcus wants the gazebo company to have price points for every one. Eventually he wants to turn the gazebo company into a pure assembly-line business that is cranking out cookie-cutter $9,995 gazebos. That's fine for Marcus, but maybe the founders preferred to be thought of as the "luxury" gazebo brand?

Well, they've made a deal so now they have to work with it.

[–] duckyslattery 9 years ago

He did the same thing with the drum company. These businesses are small and their skill is specialized. Not everyone can build something specialized. Or their customer base is well to do and loyal.

[–] misterbfd 9 years ago

Right, I forgot about the drum business. "You've got to build drum kits that we can sell for cheap at the local Guitar Center or Sam Ash!"

Well, maybe for MARCUS you do, but to be successful you also don't. There's nothing wrong with being the "specialty" brand or the luxury model. You don't have to sell to everyone in order to be successful.

I'd rather be known for being really great at one thing than average or so at a bunch of things.

[–] 9 years ago

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[–] duckyslattery 9 years ago

I thought you said the show was fake.

[–] michinine 9 years ago

Usually you do that with different named product lines.

Coke does it with expensive "Vitamin Water", Coke is just in the fine print.

I doubt that selling something that cost easily up to 10k in a cheap looking set for <1k is "diluting the water". The people who buy 5k drum kits doesn't even look at anything thats lower than that.

Also, I doubt that most of the drummers and instrumentalist live performers are so vain. Thats more the singers and champagne crowd :^p

[–] StevenSmithNYC 9 years ago

"I'd rather sell fifty $30,000 gazebos a year than one hundred fifty $10,000 gazebos per year. "

It is the better path. I'd rather sell both, which is his point. They were ignoring a whole segment of the market. Also, it brings people into wanting a gazebo at $10K and can then be encouraged to buy a $30K one. It is all about presentation of the product and the expectations the customers place value on it. For some people, even a $10K gazebo is overpriced and has no value to them. He wasn't getting them to stop selling one type for another, in fact, he was encouraging them to go after large corporate clients like chain hotels for the higher-end stuff.

[–] duckyslattery 9 years ago

The revenue is the same so it's not worth beating your brains in trying to hire more people and train them and keep the quality high and have 100 more customer orders to process and worrying about whether you get paid and have more customer complaints to address.

When it comes to a specialty, unique, niche product-smaller with higher margins is better.

[–] 9 years ago

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[–] duckyslattery 9 years ago

According to the person who one minute says the show is fake and the next minute talks about whether the businesses are making more money since they signed on with Marcus.

You have no argument to my business strategy. You're just upset you had to have someone tell you how to run a business.

Anyone who thinks it's better to make the same money with lower margins and have the headache of employing more people and chasing around more customers clearly doesn't know much about business. Now go run along and play with your paper route business.

[–] 9 years ago

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[–] duckyslattery 9 years ago

Are your feelings getting hurt because I'm exposing you as the fraud that you are with your "the show is fake" schtick? Your attacks are getting a little nasty there kid. For someone who is such a legend in their own mind, you sure get your feelings hurt pretty easily and you obviously can't talk business like a grown up.

I gave good arguments for my cause and all you can come up with is insults.

Believe me kid, your insults mean nothing. You are nothing to me so we can either talk like adults or maybe you should run along to the Cartoon Network or Xbox board where you belong.

[–] 9 years ago

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[–] duckyslattery 9 years ago

You still haven't explained why it's better lower the price, have lower margins and more b.s. to deal with.

[–] misterbfd 9 years ago

The revenue is the same so it's not worth beating your brains in trying to hire more people and train them and keep the quality high and have 100 more customer orders to process and worrying about whether you get paid and have more customer complaints to address.

Tim Ferris.

[–] duckyslattery 9 years ago

There might be some Tim Ferris creeping in and a little Shark Tank. It's a strategy I agree with.

[–] cocacolaistherealthing 9 years ago

If I were to have a business, I would prefer to specialize and sell small scale markets, but it seems like the people who apply for the show want to break out of their niche.

Since the process and suggestions he makes are voluntary, I would guess that the people want to broaden their market and a part of that entails offering different levels of products, from economy to luxury.

Is GM thought less of because they make Buicks or can a Cadillac be valued by itself?

The gazebo business can have their customized products for the people who really want them, which is a much smaller group than the people who would buy the assembly line, cookie-cutter version.

For gazebos specifically, the people purchasing them have the money to have property with a larger enough yard to accommodate a gazebo as well as the disposable income to buy one--at either price level, a gazebo seems like a luxury product, which demands quality of a least a modest level. In this specific case, I don't think quality is being diluted by offering different models/options.

[–] phillphanab 9 years ago

Curmed hates the show so much he can't stop watching it. After a year of convincing his mom she finally gave in and he is allowed to have the show played on a 24 hour loop in her basement.

[–] jpkrunch 9 years ago

I agree somewhat but it depends on the business as you say. But I think the pet food and the gazebos are good example of Marcus being right. (I actually know the pet food business is killing it now) I don't think one should ignore a huge segment of the public unless there is good reason and I do not see that with the pet food or the gazebos. With the drums, I could definitely see it. Drummers want "cool" and/or rare drum sets that not everyone else has and there is a big value in that. There is a "status" to it, like with a Mercedes or other high end car. But I do not think most homeowners' guests are familiar with brand name gazebos or even care. It still has to be high quality though. They made a pretty great gazebo for 10k. I bet they sell a lot of them. And the rich folks can spend more to get an even better one.

I would say my memory is not what it used to be. But I don't remember what my memory used to be.

[–] StevenSmithNYC 9 years ago

It is also a good strategy to offer the $10K gazebo models to get people interested which leads to the chance to upselling them the more expensive models.

[–] duckyslattery 9 years ago

As long as the company can find 3 times as many employees to do quality work so they can bang out 3 times as many $10k gazebos.

This doesn't seem to be a product where people have more than one. But if one person has a $10K model, they might have a friend who sees it at wants to buy a $30K model.