Company background
Paul Fuller and Irené Raubenheimer started Rogz in atwo-bedroomed apartment in Blouberg, Cape Town. Although the business currently focusesexclusively on the pet market, Rogz’ first products were surf-style sunglasscords and watch straps (both Raubenheimer and Fuller are keen outdoorsportsmen). Six years into the business, the pair identified the enormousgrowth potential in the pet industry and, drawing on their product developmentand manufacturing knowledge, started developing fun, funky accessories for petsunder the cool, hip lifestyle brand of Rogz. Beltz (collars, leashes andharnesses) were the first Rogz pet products to explode onto the pet market. Onthe back of its attendance at international trade fairs, the Rogz brand wasquickly snapped up by the export market, where it remains a pet industryleader.
Consider the following statistics for a moment: in 2006Americans spent R270 billion on their pets. This figure is expected to surpassR309 billion by 2011. When it comes to making money, pets are big business.Gone are the days when pet owners were content to buy a simple leather collaror leash from their local hardware. In the past ten years, Rover has becomesomething of a fashionista, and local Cape Town-based company, Rogz, has beenat the forefront of this trend on a global scale, exporting to 60 countries andlast year winning the Pets International magazine’s 2006 Global Pets ForumAward. The export success story of this small private company,which managed to break into the fiercely competitive European and United Statesmarkets within a couple of years of developing the Rogz pet range, is worthinvestigating. Although their product is undoubtedly unique in many ways, bothRaubenheimer and Fuller believe that it’s their marketing and brand-buildingcapability that has really been the key to their success. “We speak to a lot ofpotential entrepreneurs who are waiting for a magic, unique product idea andmany of them wait all their lives. It’s very difficult to invent another roundwheel,” says Raubenheimer, continuing, “The product idea is 5%. The other 95%is execution. It’s easier to be unique in marketing. We were not the first tomake pets products but we added a personality to the product line and this iswhat was important. The customer buys into the lifestyle brand element of theproduct and for this reason, marketing has been very important to us.” Fuller,who manages the marketing and branding side of the business, concurs: “Rogz isabout more than just a dog collar. It’s a cool, hip brand for pets and one thatinspires our customers to do fun, crazy, outdoor, exciting things with theirlives and their pets.”
Marketing internationally
With such enormous growth potential in the United Statesand European markets, it made sense for Fuller and Raubenheimer to target thesemarkets for exporting. “The major markets for our products were obviously inEurope and the USso those are the two areas we concentrated on,” says Fuller. But even with auniquely branded product, getting into international markets is by no means awalk in the park. “We are a small private company so we have adopted aguerrilla-style marketing tactic – we literally just go for it with everythingwe have,” he continues.
Attendance at international trade fairs was a vital step ingetting Rogz recognised in the international market. At their first trade fairin Italyin 2001, the company received an astonishing 36 distribution applications from24 countries. But Fuller points out to would-be exporters that the competitionat these trade fairs is intense. “It doesn’t help to go to them with me-tooproducts. You have to have something different that will catch people’sattention,” he says. In this regard, it’s vital to familiarise yourself withwhat the market is currently offering and while Fuller believes that you can dosome of this research online, once you have chosen the countries that you aregoing to target, you have to visit them to get a feel for the market andpotential for your product to find a niche.While Rogz got into the European market almost immediately,cracking the USmarket took a little longer. Fuller lists distance from Cape Town and intense competition as hurdles.“There are so many products on offer and the US consumer is so spoilt with thenumber of options they have that it’s very difficult to break into the market.There is also a very established distribution network in the US and to getpeople to change their distribution or product lines is very difficult,” hesays. The sheer size of the country and the logistics that come with it arealso things that many people are not used to dealing with. “People don’trealise it but each state is like a country so it’s like dealing with 50different countries. I do believe that people need to tackle the US piece bypiece – start on the East or West coast and bite off a small piece to work on.We made the mistake of trying to cover the whole USA and do distribution placementin the entire country, which is very difficult.” Difficult or not, Rogz hasfound success and although it’s still early days, the company is experiencingimmense growth in the US.
Funding the dream
The pair ploughed all their profits back into the businessand this helped it to grow. “We were very naive about banks, believing them tobe ‘financial partners’ but they just laughed at us every time we took an ideato them and asked for finance.” But, as many entrepreneurs discover, wherethere’s a will, there’s also a financial way and Raubenheimer and Fuller foundtheir particular solution in factoring their debt for a while. In addition,they drove a hard bargain with customers. “We insisted on pre-payment andalthough that was a very hard negotiation, we found that in every country therewas at least one player who would take us on under those terms, because theproduct was unique,” he says, adding, “We’ve stuck to our guns on that one andalthough I am not sure that everyone can get away with it, it has worked forus. It has allowed us to self-fund. Now, years down the line, we can source anywhere we want toin the world. We can draw up prototypes and make moulds and some of ourproducts can remain in production for a long time. But when they eventually dohit the market, they will be unlike anything else and serve to draw attentionto the Rogz brand,” says Raubenheimer. He adds that along the way, Rogz hassourced machinery and had some machines specifically designed, and productionhas become more sophisticated over time. But he’s quick to point out that it’snot the company’s aim to become manufacturing specialists: “Strategically wewant to develop the brand and the product so if, for example, we develop aproduct that uses rubber components, we don’t start making that componentourselves. We’ll source it from elsewhere.” It is only lately that Rogz has started patenting a few ofits products, but Raubenheimer believes there is a great deal of misconceptionamong lay people about the value of patenting. “People believe that if theyhave a one hit product and a patent for it, their lives are made,” he says. Butthis is not necessarily the case. “As a start-up entrepreneur I wouldn’t makepatenting a priority. It’s expensive, not fool-proof and difficult to police.”
The brand is key
For Rogz, the brand is key and Fuller and Raubenheimer haveconcentrated their efforts on protecting this. Trademarking laws andregulations differ from country to country and the process involves procuringthe services of an intellectual property lawyer. “It’s easier to trademark aname globally than it is to patent a product,” says Raubenheimer, “And thebottom line is that it is much easier to protect in court. If someone isknocking off your name its far clearer than if someone is knocking off yourproduct. They can make minor adjustments to your product and then tie you up incostly legal debates about whether their product is truly the same as yours.”
Looking to the future, the Rogz team has big plans. “We havethree product categories – collars & leashes, bedding and toys and our goalis to roll out more categories,” says Raubenheimer. But he’s ever mindful ofmaintaining a balance between being specialists and offering diversity. “In thecategories where we are specialists, we need to ensure that we remain so. Wecan’t focus so much on breaking into new areas that we lose our leadership positionin areas we already dominate.” In terms of markets, the future looks brighterthan ever. Fuller says: “Our focus will remain on Europe and the USA in the short term but with an eventualexpansion into Asia as that market grows.” Andgrow it certainly promises to do. Already, the pet industry in Japan alone isworth R75 billion. You can be sure that it won’t be long before Rogz hasgrabbed its slice of this pet industry pie as well.
Rogz timeline
- 1995 Rogz Pty Ltd set up by Paul Fuller and Irené Raubenheimer.Sunglass cords main product line and the pair operated from an apartment in Cape Town
- 1996 Moved into first premises of 100 m2
- 1998/1999 Approached by big US corporations to sellprivate label products in very high volumes. Period of intense operation withstaff going from 30 to 150
- 2000/2001 Started developing pet product line, boughtnecessary machines and started importing some materials
- 2001 Beltz range, first pets product line (collars,leashes and harnesses) developed
- 2001 Attended first trade fair in Italy
- 2001 On the back of interest at the trade fair, Rogzlisted in Harzewoude, Holland.
- 2004 Rogz is listed in USA
- 2006 Rogz received award from Pets International as thecompany having the largest effect on the pet industry during that year
- 2006 Opened a hub in St Louis,Missouri to service the growing USAmarket
- 2006 Opened a hub in the Netherlandsto facilitate sales to smaller customers in Europe
- 2007 Moved into a second factory in Montague Gardens, bringingtotal number of factories to two and the space to over 2 500 m2
Developing partnerships
Rogz now exports to 60 different countries, a footprint thatdemands excellent relationships with distributors. As an exporter, choosing whoyou do business with in foreign countries is crucial. “We have always had thephilosophy of having very strong partners who have a localised knowledge ineach country and we have chosen to do exclusive sales with them. This meansthat we have been able to grow the partners we have in these countries over thelast six years and that loyalty is returned to us.” Developing such loyalty is important;distributors are foot-soldiers for your brand, championing it in their localmarket. But exporting is not all about what happens in far-flung countries. Thework that’s done at home in many ways forms the heartbeat of a successfulexport operation. In particular, managing cash flow and getting manufacturingand product development right can secure ongoing success. Even though Rogzcurrently occupies two factories, like most exporters they started small andwith only a little cash that came out of the partners’ personal funds.
Raubenheimer, who heads up financials, operations and newproduct development, recalls, “In the early days we would do everythingourselves, sourcing materials from the local textile supplier base, bringingthe materials back and making a prototype. As soon as we had something, we hadto go to market with it immediately because we were so desperate for turnover,so at that time nothing ever spent very long in the product development phase.”
Rogz’ top tips for would-be exporters
1. Create a well-branded and different product
2. Market extensively through major international tradefairs
3. Work exclusively with your distributors
Useful websites
