Chipco – Chips Klein Biography

As a professional flamenco dancer Chips Klein had to apply a lot of make-up and false eyelashes daily, a process which was long and tedious. When she left her dancing career behind and started working in the

cosmetics industry (doing makeovers for customers) she immediately realized that it was much easier to apply make-up to someone else than to herself. The problem was that a regular mirror didn’t allow women to see their face as a 3D object while applying their own make-up. Chips searched for a product that would do just that and when she couldn’t find one, she invented her own. Named an “Eye Maker” it was 3-way mirror that allowed the view of both upper and lower eyelids, thereby making the application of make-up much easier. This was a very simple and ingenious idea.

However, when Chips Klein tried to bring her product to market she was faced with many challenges. While she managed to sell almost 4,000 units of the “Eye Maker” in just a few months, she did not receive a single reorder, which meant that the end consumers were not buying her product. While I agree with the evaluation report from the Canadian Industrial Innovation Center Design which suggests that the market for such a mirror is quite small, I still believe that there is potential to sell a lot more of this product.

In order to successfully sell her “Eye Maker” Chips Klein, first of all, needs to develop her Marketing Plan. She should really concentrate on each of the 4 Ps of successful marketing mix: product, price, place and promotion. In my opinion, one of the main reasons for the low sales volume was the poor design of the product. As it was mentioned in the evaluation report “design should be as aesthetically pleasing as possible”. Therefore, Chips Klein should follow the advice from that report and hire an industrial engineer who will design an attractive and functional product. Due to the fact that ” The Eye Maker” is a new innovative product, the packaging of the product is also very important. It should not only be visually appealing but it should also highlight the benefits of the “Eye Maker” to the consumer, explaining why they should buy it. Designing the product and packaging is of paramount importance; until this is done Chips Klein shouldn’t even try to approach anyone for financing.

Secondly, Chips shouldn’t be limiting her company to have only one sales agent; she should expand her distribution network across Canada and United States. Therefore, I think Chips made a mistake by giving Fred Becker the exclusive rights to Canadian market for such a long period of time. No matter how good a salesman Fred Becker might be, one person is just not enough. I believe that she should try to renegotiate the contract for next year. Chips should also explore the possibility of selling her mirror at the specialty stores that sell theatrical make-up and accessories. I think “The Eye Maker” will be much more popular with these consumers, who can really appreciate the benefits that a three-dimensional mirror provides.

Another concern was the fact that sales of the mirrors dropped dramatically after the New Year. This is most likely because “The Eye Maker” is a seasonal product. While it makes an original and inexpensive Christmas gift, few women will actually buy this product for themselves throughout the rest of the year, especially since they are not aware that such product exists. Therefore, Chipco should not have its own production. Instead production should be outsourced to a third party. It does not make sense to pay for the overhead if the company will not be operating at full capacity throughout the year. The best course of action for Chips Klein, of course, would be to license the “Eye Maker” in return for a royalty fee to a big cosmetics company such as Max Factor or Revlon which will take care of the production, distribution, promotion and retailing.