story by Rose Ann Pearce, special to The City Wire
Editor’s note:The Supply Side section of The City Wire focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by The City Wire and sponsored by Propak Logistics.
Maslow’s Hierarchy of Human Needs has found a home in a business application for a company called Holistic Product Group, which prides itself in nurturing a concept or idea through the stages of development to land on a shelf in Wal-Mart, Sam’s Club or other major retailer.
Based in Rogers, the company was born in the fourth quarter of 2014 by Vicki Redman, identified as principal owner and executive vice president; Rodney Redman, president and chief operating officer; and Wyatt Watkins, executive vice president and chief financial officer, according to the company website.
Psychologist Abraham Maslow in 1943 developed his hierarchy, that human motivation is based on people seeking fulfillment and change through personal growth. Self-actualized people are those who were fulfilled and doing all they were capable of, according to Simply Psychology website in explaining Maslow’s studies.
HIERARCHY APPLICATION
The hierarchy has been used in education to help teachers understand how children learn, once their basic needs of food and shelter are met, The Redmans and Watkins seek to apply the same principles to their business model to help clients get their ideas in front of shoppers.
Watkins explained how Maslow’s Hierarchy is applied at HPG: “We only take on products we feel there is a need for in the marketplace. A product goes through different stages during which the product is reviewed and fine-tuned.”
Those stages of development are identified as concept, design, product, launch and metrics.
A light bulb goes off in a person’s mind as he comes up with latest design for a widget that the world can’t live without. In the concept state, HPG will help the widget designer provide an avenue from concept to finished product on a merchant's shelf. Out of an estimated 250 to 300 ideas that may come their way this year, only 10 will likely find their way into Wal-Mart, Rodney Redman said.
And, they do say no to some ideas.
“We get a lot of those. More than you think,” he said.
The design needs perfecting for manufacturing. HPG's staff then works to provide counsel to refine the concept for delivery to the design team. Refinement of the concept at this stage seeks to reduce wasted design and prototype expenses.
From the concept team, the new widget moves to the design team. There, engineering, marketing, logistics, and finance staff work together to provide the client, the widget designer, information to take the design to a level so engineering can build it, marketing can sell it, logistics can ship it, and finance can demonstrate it has financial success.
PRODUCT CYCLE
The HPG Product Cycle is unique in that it incorporates the feedback of all stages of a product's cycle. A niche area for HPG is the level of planning and forecasting this early in the product cycle. The executives said these early stage decisions are critical in a successful product.
Next comes the product stage, which provides a realistic view of the widget. Prototypes and models provide the first look. The cross departmental teams again have responsibilities to critically review the product. The teams ensure the product has successfully met targets as determined in the design stage.
The Holistic Product Cycle is not a "best guess" process, but a calculated and controlled product development cycle, Watkins said.He said when the day arrives for the widget’s introduction to the market all teams play supportive roles for a successful product launch. As sales performance begins so will the analysis.
The final stage is the metrics. All teams are interacting with the measurements of the market. Engineering is monitoring manufacturing and quality, Logisticians are ensuring finished widgets are moving to the product shelves, Marketing is executing sales plans, and Finance is measuring financial performance.
This provides feedback the product is performing at targets. Exceptions provide opportunities to refine the concept and move back through the Holistic Product Cycle.
Rodney Redman said this cycle of product development provides a one-stop shop for designers, especially designers who have an idea but have no way to get it to a major retailer like Wal-Mart. The product cycle may take up to four or five months to complete to give the product full attention.
“It takes a great idea but the cost of the product has to be right,” Redman said, adding that Wal-Mart, for example, wants to make a 35% margin on a new product.
But, Redman added, Wal-Mart or Sam’s don’t want to be first to market with a new product. It may be better for a new widget to start with a smaller retailer and then enter the Wal-Mart system. Wal-Mart is not difficult to work with if the client has the right item at the right price, Redman said.
“We want to help people with a product or idea that we believe in and that we would buy ourselves,” Redman said. “We (also) listen to our wives.”
Fees or commissions for the services of HPG vary according to the needs of the client. Redman said there is no average because of the wide variations of needs.
STRENGTHS/WEAKNESS
The company has nine full-time employees. He noted that what sets the company apart from others is the cycle from concept to launch and post-launch measurement and more than 80 years retail experience.
Redman has 20 years experience in consulting and retail business, including seven years with Wal-Mart in the areas of warehouse and distribution operations, inventory control, shrink, merchandising and marketing, according to the company website.
Watkins has more than 20 years experience in the financial industry, including positions in all areas of fiscal development in commercial banking, the website states.
Competition is always a threat to service providers in the Northwest Arkansas supplier community. HPG founders said they are counting on their experience and diverse service platform as they try and grow their business overtime.