How do you enter a market when you have to compete against a household name like Woolite?
That was the question facing Jacqueline Sava when she founded Toronto-based Soak Wash Inc. in 2005.
She knew that she had a great product with Soak, a liquid laundry soap for woollen and delicate materials. But she would be entering a mature market with an entrenched giant.
How could she survive, let alone thrive?
After receiving a bachelor of fine arts in industrial design from the Rhode Island School of Design, Ms. Sava worked as a product development consultant, and even obtained some patents.
But her true passion was to create her own unique textile products.
She was an avid knitter and founded Jacq's-Hats, which went on to become an award-winning knit accessories company.
The idea for Soak emerged from her knitwear customers, who were loath to trust their one-of-a-kind purchases to a strong laundry detergent.
"My customers and the retailers carrying my hats regularly asked me how they should be cleaned, and I didn't have any suggestions to offer," Ms. Sava says.
"It didn't seem appropriate to suggest that an $80 hat made out of wool, cashmere and silk be washed with a harsh grocery store detergent."
Taking this gap in the market as a challenge, Ms. Sava worked with a chemist to experiment with different variations of a product formula until she had a gentle and rinse-free formulation with which she was pleased.
Described as "modern care for the laundry you love," Soak is biodegradable, phosphate-free and eco-friendly.
The problem was taking it to the market. "It made no sense to go into a big grocery or pharmacy chain," Ms. Sava says.
"I couldn't afford the listing fees, and even if I could, no one would buy it there because no one knew about it."
What should she do to get Soak to the customers who would value it most?
Ms. Sava knew that she could leverage what she already had: a distributor who was placing her hats in accessory stores.
"It made sense to sell Soak on the shelf next to the knitted items that needed it," she says.
She also realized that knitters themselves would be interested in Soak.
"Entering through the knitting market made so much sense. These are people who know how long it takes to create something beautiful, and so they value knitwear, and, by extension, anything that helps it keep looking great."
She started to sell her product in yarn stores, and attended a knitting trade show to make further connection in this community.
Through this focus, Ms. Sava became known in the knitting world – a perhaps surprisingly large community, with 53 million knitters in North America – and subsequently did a joint promotion with Ravelry, a social network of one million active online knitters.
The knitting connections also provided new opportunities.
"One of the quilting editors found me at the trade show and Soak gained some very positive press.
This led to Soak becoming known in the quilting world, and, subsequently, a co-branding arrangement with Amy Butler, a celebrity in that world," Ms. Sava says.
"Quilting, like knitting, is a massive industry that had a dominant, entrenched antiquated washing product.
There have been huge technological advances in fibres, and there are artisans creating crazy, modern prints with fabrics that don't shrink or fade, but the laundry products hadn't evolved.
The dominant laundry product for quilters was horse wash – literally, the stuff you wash horses with – a remnant from quilting's rural beginnings."
Having gained customer traction in narrow niche markets, Ms. Sava believed she was ready to move into a more mainstream market: fine lingerie.
The lingerie market is consistent with Soak's value proposition, because today's fine lingerie is made of advanced materials that require specialized care.
Shape-wear, stretch lace and athletic wear have all had significant improvements in manufacturing and design.
It is also consistent with what Ms. Sava is good at: developing products that appeal at retail, distributing products to retail locations, and developing partnerships with important players in her markets – in other words, building relationships.
Ms. Sava's very focused, sequential entry strategy has paid off.
Soak is regarded as the emerging leader in the delicate wash category. The product is now sold in Canada, the United States, Britain and Japan. It can be found at more than 1,000 retailers, including specialty stores for knitters and quilters, lingerie boutiques, and even at the lingerie counter of Sears Canada Inc.
"Sears is a great fit for us," Ms. Sava says. "They were looking for ways to refresh their brand and establish innovative offerings in this category, and we do that, through holiday packaging, cross-promotions, and providing different fragrances to give consumers not only gentle care, but also choice."
In addition, Ms. Sava has won several awards for her company and product, including the Toronto Business Development Centre Young Entrepreneur Award, the Export Award from Ontario Women in International Trade and the National Post Design Exchange Award.
Special to The Globe and Mail
Becky Reuber is a professor of strategic management in the Rotman School of Management of the University of Toronto.
This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Your Business website.
Join The Globe's Small Business LinkedIn group to network with other entrepreneurs and to discuss topical issues: http://linkd.in/jWWdzT
Our free weekly small-business newsletter is now available. Every Friday a team of editors selects the top picks from our blog posts, features, multimedia and columnists, and delivers them to your inbox. If you have registered for The Globe's website, you can sign up here. Click on the Small Business Briefing checkbox and hit 'save changes.' If you need to register for the site, click here.