Toy company start ups take heed; an ongoing case study from Shavemate and the razor industry

There is a really interesting piece in the April 29, 2010 New York Times on a small razor company, L.P.I. Consumer Products, that is trying to break into a shaving industry dominated by the giants, Schick and Gillette.  The scenario should sound all too familiar to any small toy company trying to wedge its way into a small space between Mattel and Hasbro.

It seems that the company has created a product, Shavemate that combines shaving cream with a razor (the shaving cream is in the handle). They have been working on this since 1997 and have currently about $2 million in sales. That may be about to change due to their decision to do some more aggressive marketing. 

There are some good lessons here for toy companies trying to break in so here is how the article lays out their options: 

They could go head-to-head with Gillette and Schick with a national print, television and radio advertising campaign, supplemented by store promotions and coupons. …The cost could easily exceed $150 million.

They could market ShaveMate on their own through shavemate.com and specialty retailers like hotels, airport stores and cruise ships…This was the most affordable option, costing an estimated $100,000 to produce razors for the initial stock, displays and promotions, but it would take a while to build the brand and increase sales.

Finally, they could initiate a two-pronged marketing attack for about $1 million, looking…to put ShaveMate in front of print editors and TV producers. Then they could begin a national, as-seen-on-TV campaign on cable … The goal would be to have a well-known spokesman promote the razors.

They chose option two which resulted in listings with Walgreens.com, Target.com and Meijer. Walgreens bricks and mortar went national with it in February. 

Take a minute and read the article and let us know what you think. Are the results in line with the investment? Could it have been done differently?