Reisterstown-Based Daily Deals Site Bets on Niche Marketing

In the early ‘60s, Gino’s ruled Baltimore. Then, all of a sudden McDonald’s tried going head-to-head with the hometown favorite. McDonald’s had been around longer in other parts of the country, but the company hadn’t attempted to throw any elbows in Gino’s direction.

Then McDonald’s Big Mac threw down against The Gino Giant. Still, no one thought the mighty Giant would fall. It was a beloved business started by local heroes.

Then Gino's crashed.

McDonald's has gone on to dominate the fast food marketplace. In fact, according to the 2001 book Fast Food Nation, one in eight workers in the United States has spent time working under the golden arches.

Flash forward to Hechinger. When Hechinger first opened its home improvement superstores, tool lovers had a collective jaw drop. A mecca full of nuts and bolts, literally, had emerged. A bold Home Depot popped onto the scene. Seriously? Consumers scoffed...initially.

Then, another crash, and Hechinger disappeared.

The general business rule has always been that an entrepreneur should figure out a consumer need that’s not being met, then set out to fill that need. Still, as McDonald’s, Wendy’s, Home Depot and Lowe’s prove, if your concept and product are good enough, you’ll always find exceptions to the rule when it comes to entering a marketplace that has strong competition.

The key is in finding a niche or hook.

“Daily Deals” programs (i.e. Groupon, LivingSocial, KGBdeals) are all the rage. According to Barbara Findlay Schenck, a marketing, branding and business planning advocate who authors a column for MSN, the use of coupons hit an all-time low in 2008. With the advent of Daily Deals programs, by 2009 the use of coupons rose 27 percent. Schenck wrote in her MSN column that no one could have predicted that “in 2010 group buying of coupons would become a social craze, [and that] daily-deal sites would make coupon usage hip.”

The patriarch of this concept, Groupon, has enjoyed alpha dog status, much like Hechinger did in the home improvement industry. That’s shifting, as newcomers clamor to enter the markeplace every day, according to Advertising Age. In its January issue, Advertising Age reported on Plum District, a “mom-based” Daily Deals company that is counting on a female sales force to give it a marketing hook, much like Avon or Mary Kay.

Again, the hook; the elusive concept that gives a new company a marketing edge in a field full of seasoned competitors. 

Enter , the brainchild of Reisterstown resident Adam Marks. Marks trademarked the name Chewpons back in 2005, but the original concept did not resemble the food- and drink-based Daily Deals format that launched in December. Chewpons collaborates with local restaurants and pubs to offer daily discounted deals to consumers at 50 to 90 percent off. Both advertiser and consumers benefit from the arrangement, much like other Daily Deal companies.

So what’s the niche or hook here? Marks has said Chewpons will cater only to the food and beverage industry, but since LivingSocial and Groupon offer daily deals in that marketplace regularly as well, Chewpons can hardly be seen as filling a niche that has gone unnoticed.

Just as Plum District developed a strong marketing plan by using an all-female sales force, Chewpons has hit upon a stellar marketing hook. A percentage of every deal sold goes to support a charity chosen by the advertising restaurant, or to the Maryland Food Bank if the restaurant doesn’t select a charity.

The Chewpons web page showing the daily deal includes a counter, showing how much money the local charity has earned off the deal to date.

It’s a quantifiable, visible, feel-good marketing hook. Besides the pubic at large, people who work at and support local charities eat out, too. If given the choice between supporting a company that chooses to help the community and one that has no ties to the local community, who has the edge?

In its PRNewswire release, Chewpons stresses this hook. The release reads, “Sign up today at http://www.chewpons.com and help support local business owners, while also giving something back to others in the process.”

Founder Adam Marks certainly knew what he was doing in developing this angle in a quickly crowding field. He drew on his 15-plus years of marketing experience with the likes of Google and Comcast to develop a winning concept. If he’s right about developing the perfect hook, Marks will take his show on the road. For now, Baltimore charities will get the benefit of his efforts.

Editor's note: Check out our companion piece on Adam Marks on the formation of his company .