Young fast starter wedges into a market of giants

Mia Klitsas, 25, knew that the tampon market had an image problem. Her solution was to change the image. She tells AMANDA GOME how style has let her change the niche and build her company, Millie & More. She also answers readers questions….

By Amanda Gome

Mia Klitsas, 25, knew that the tampon market had an image problem. Her solution was to change the image. She tells how style has let her change the niche and build her company, Millie & More

Klitsas was a 22 year-old marketing student when she decided to take on tampon giants Libra and Carefree and transform a tired old industry. Three years on, the young business Millie & More has three products and five employees.

The business is yet to make a profit, but revenue is $3.4 million for 2007-08 and Klitsas estimates she already has 5% of the tampon market. How? The secret has been in its product’s distinctive design and packaging.

She is happy to answer your questions. Email feedback@smartcompany.com.au before end of business Friday 4 July. See below for some questions and Mia’s answers…

Amanda Gome: Were you brave or naïve starting at such a young age and taking on global multinationals?

Mia Klitsas: I was a bit young and crazy. I had had very limited experience, but in a way that made me give it a shot. One of the reasons I wanted to run my own business was that I felt as a young girl I wasn’t being taken seriously. When I was trying to get ideas across the line I felt dismissed. But now I am running my own business, people take me more seriously. When they find out I am the decision maker, they change their tune.

What niche did you see back in early 2000s?

I was very dissatisfied with existing products. I went to RMIT University and we would go down to Priceline and buy our shampoo and tampons and we were 21-year-old women who were still embarrassed. Female hygiene was so medical and daggy. It was still taboo.

What was your idea?

To create something more feminine and that looks OK. If it falls out of your bag chances are no one will know what it is, something that doesn’t scream ‘look at me I am a tampon’.

Who are you competitors?

Libra and Carefree. There is also Cottons, which has found a niche (selling cotton tampons) and application tampons which are big in the US but not here.

It’s a $250 million a year feminine hygiene market. The tampon market is worth about $87 million and we estimate we have 5%, although we don’t have all the information from our competitors on their market share.

Is it a fast growing market segment?

No. It’s pretty stagnant. There are only so many women who need our products. We knew that and set out to get a small part of that market.

How much did the business take to start?

About $400,000. My business partners (Natalie Koenen and Jeff Gore) and I did a very succinct business plan and then we all got loans from the banks that we personally banked with. We already had confirmation that Woolworths would take our products, so that helped.

But you had to offer security?

Yes. I got a personal guarantee from supportive people close to my family.

Are your family entrepreneurial?

Yes. My dad runs his own knitwear manufacturing business.

They were very encouraging. My parents said ‘you’re young, you’re not silly, so give it a shot. You’ve got no responsibilities so if it doesn’t work you are employable and can get a job’.

So how long did that money last?

We needed more money than we expected. After the tampon range we launched two more products; Scanty panty liners for everyday use and overnight pads. That’s a lot to do in a little more than two years.

Where was your first office?

We started out of a study at my home. Then we moved into an office in Richmond and we have just moved into North Melbourne, as it’s bigger.

What was your target demographic?

We went a bit older – 18 plus. It is aimed at the woman who is starting to make her own decisions. It is the product you buy, not the product your mum bought for you.

But it has broad appeal. Young girls are getting it too.

The name and branding is very distinctive. Where did the name come from?

It is a combination of the business partner’s names. It is easy to remember and represents our story. The project was called Millie, a combination Mia and Natalie (Koenen), and More comes from Gore (Jeff).

What was the aim of the design?

We wanted a fresh, new look. A lot of the packaging for tampons is loud, daggy and unfashionable. It reflected the category which is very me-too. Everyone copies each other. Sometimes you want to buy what you bought last month and you can’t because it all looks the same.

We wanted to make it more fashionable and less embarrassing.

We came up with a soft look that was 1940s classically feminine with candy stripes and bows. It was completely new to women who have not seen that style, and there is a feel of pampering to the design and advertising. We don’t pretend like other advertisers that that time of the month is not crap. We say we know it’s not the best time of the month, but we try and make it fun.

And the functionality?

That was very important. We wanted good functionality for girls who always had issues with cardboard boxes opening in their bags and the tampons falling out and getting grubby.

You came up with the idea of a tin box. How?

It was a crazy midnight thought that didn’t go away. We needed something sturdy that was 100% recyclable.

Did you go on your gut instinct or did you research?

We held focus groups to test our concepts and the women did see the same benefits we did. Jeff used to cut up old deodorant cans to make mock ups.

Was sourcing the tin a problem?

Yes. It took months. We were looking for the best supplier and manufacturer. We started by researching online and business sites and speaking to people. We were looking for a combination of quality, best price and a relationship.

We placed a first order but kept our finger on the pulse and then found another manufacturer who was just as good but a better price. That allowed us to price our products at our competitor’s rate and absorb the price of the packaging.

What was the hardest part of the initial start-up?

I had no experience in running a business, with managing cashflow.

Six months after we launched we got a bookkeeper. That was a huge help – we should have done that upfront but of course money was an issue.

Another challenge was dealing with major retailers. I didn’t know how to approach them or deal with them. Going in and pitching to them is scary.

What did you learn?

To work on my presentation skills.

Who are your distributors now?

Woolworths, Coles, pharmacies, Priceline, Kmart and Big W.

Would you do it all again?

If I had known what was involved, the time, the money, the effort, the sleep deprivation, the continuous money involved, probably not. But we are really happy with how it’s going. We have found our niche and are happy with that.

Every day is new for me. If it does get too hard I think ‘stay positive, look for the future and work hard and it will be OK’. If it goes belly-up, then you know you have done your best.

It must be tough worrying about money.

Banks are supporting us. We have a positive story to tell and they can see our sales results.

When do you expect to be profitable?

We are hoping next financial year.

In the short term we are making sure we get brand out there. We do magazine advertising but TV advertising is too expensive. We send out newsletters, do anything online.

Have you had any offers to sell?

No.

Your biggest management lesson?

I treat people the way I would like to be treated. I had never managed before. I was just a uni student, but I learnt you get more out of people if you communicate.

I am not into hierarchy. A boss is only a title.

What is the future?

We have launched three products in two years so we have our work cut out for us.

We need to support those products and expand the distribution. Awareness is the big thing because we are such a young brand.

Isabelle writes: I was very interested in your story and was hoping you might be able to give me some advice. I am a full-time tertiary student doing a major in marketing and psychology. I work part-time and am hoping to start a business with a few friends too. We have some great ideas, but just aren’t too sure where to start. I’m particularly interested in how to pitch to large distributors – Coles, Woolworths etc.

You also mention that you put together a succinct business plan – was there a particular template that you recommend? And what sort of problems are there working with fiends? I’ve heard both good and bad stories. Lastly… any great tips on how best to brand and market a new company? Thanks in advance for any advice that you are willing to impart.

Mia replies: It’s sounds like you’ve already “started”! The first step is having an idea. The second is to nut it out, do some research if necessary, talk to people and assess the scope of what is potentially involved in you setting up a business/launching a product. It is also worth doing some initial research, particularly regarding the viability of the business, before you put too much time/money/resources into it.

The way you pitch to large distributors can vary based on many factors, such the retailer/chain and the way they like to operate, down to the buyer in charge of your category. There are no rules as such; I think that the key is preparation and confidence.

I actually wrote our business plan purely based on the knowledge I had gained at uni! I didn’t follow a template but made sure I included traditional marketing elements (think the good old marketing mix), but also others such as a budget and a list of resources I thought we would require. I think that a business plan should include anything that you feel is relevant to your idea/business, as it is just that – a plan.

I too have heard the horror stories about working with friends! However, we have been very lucky in our business in that we all get along and share the same vision, even though we are three very different people. Honesty, listening to each other and being open minded really helps here.

Re branding and marketing a new company. Quite a broad question, a bit tricky for me to answer I’m sorry, as it depends on the category/industry, what your offering entails and who you are targeting. Ask yourself, is it more important to promote my business (which may be true in a service-based industry, where you may have to promote your business to establish credibility), or more important to promote my brand/products? I hope this helps! Best of luck.

Maria writes: I am in the process of setting up my own business. One will run online and the other, which is a stationary item, I will need to find distributors. Could you tell me how you went about this and who are the people that I should contact?

Mia replies: We actually pitched directly to the major retailers ourselves and hence have not used distributors. However, my advice would be to contact and speak to a number of them, as they all charge very different rates. You may find that some will charge quite a bit, which may make the exercise un-profitable for you. Also, look for one that already specialises in your particular category, as they will have the expertise you require and also the right industy contacts which they may already service (this could also reduce your fees).