, Gloucester, MA

January 24, 2009

Remember the Four P's: Price, promotion, product and place

By Tracey Rauh Solomon

David Hartstein, founder and CEO of KaBloom flowers, was born in Israel, the son of Holocaust survivors.

He came to America in 1982 to attend Suffolk University, then shortly after returned to Israel when his father died.

"My mother was the one who convinced me to come back to the U.S. to finish school," he says. "She said ... 'Everything can be taken away from you, but your education.' That statement has resided in me throughout my professional career."

Hartstein would go on to earn a bachelor's degree and MBA from Suffolk in just four years, while also working full time.

Over the course of his career, he has worked with and founded a variety of companies. It was in 1998 that he launched KaBloom, retailers of fresh-cut flowers, and subsequently By 2006, the company reached sales of $40 million and had more than 120 stores nationwide.

Hartstein sold the company in 2006, then bought it back in 2008 after patenting a hydration system that allows flowers to be shipped to consumers and stores in water. The balloon-like device is secured tightly to the base of cut stems. Today, Hartstein says, thanks to this Moses Miracle, as the patent is named, his is the only company in the United States that can ship flowers overnight in water via mainstream delivery services.

Q: You describe a difficult process in getting the patent for the Moses Miracle. In fact, you say the patent was turned down three times. Why did you keep trying?

A: We found out in retrospect that the examiners in Washington, D.C., had not issued the patent not because there was something out there like it, but because they could not believe that something so simple was not invented before. The point I am making here is that in this day and age, it is very hard to reinvent the wheel. But it is important for all of us to look at our business every day and determine where we stand as it relates to our competition. What can we do that is better than our competition? And that is one of the great things that exists in the United States; as long as we are honest and ethical, the sky is the limit.

Q: You have gone through many different economic climates as a business person. What sorts of advice do you give to your franchisees to help them succeed during these difficult financial times?

A: Within the business model, I look at how do you run a company. There is an item called fixed costs that you can't get rid of: rent, taxes, water, sewerage, etc.

Q: And then there are those that are not?

A: Yes. In an economy like today, for instance, when people are laid off, very good people are out there looking for something to do in their field. One of the things I do (to save resources) is I outsource every aspect of my business. I outsource accounting, marketing, affiliate management... I advise franchisees to look at things we used to do in the past that worked very well for us. Like marketing our business via local merchants... Put a vase of fresh flowers at the local Starbucks, local Dunkin Donuts, local dry cleaner, local shoe maker, apparel store. Just ask that they put a card that says these are courtesy of KaBloom. Get people to see what you do, and maybe get them to come to your store.

Q: Any more simple tips?

A: There are local newspapers that can have an ad, a flier, that says come to KaBloom and we will give you a dozen roses if you spend a certain number of dollars ... The local merchants around us are in the same boat that we are. We can all organize together and advertise our local community. The local newspaper can be very helpful with this.

Q: Can you think of an example?

A: I remember when we opened KaBloom, the day I knew we had a successful formula was when we advertised in the local paper and the ad said, "Free dozen roses with the purchase of a vase for $12.99." We got such a hike in our sales that I knew ... There are four items I teach our students every day, and that is the Four Ps: The price, promotion, product and place. That day, I knew we had it. It worked.