Know-How Exchange : Strategy

Can you pick away at any niche categories? Maybe if you can build brand loyalty among a few segments, then through customer loyalty and word of mouth, you can stabilize sales and differentiate your brand. It's a little more time consuming and requires some trial and error but you might find a longer term strategy that is more profitable. I could be more specific if I knew what you were selling.

Dear Paul,

To dislodge an industry leader in terms of brand recognition—so that one's own brand might take its place as the king of the castle—is tricky to pull off and a pretty ballsy move.

But it's not impossible.

What does one need to do in order to make it so?

Change one's thinking, and change one's customer's perceptions.

If you turn the problem on its head, it's not technically necessary to dislodge the number one brand to increase the profit of your brand.

I know that's probably not what you want to hear, but bear with me for a moment.

You can increase your profit (and save yourself money
and marketplace time) by increasing conversions, meaning preferences of and for your brand to ... the number three brand.

这可能not be what you had in mind, but look at it this way. What will it cost you in terms of market share, brand loyalty, marketing expense, and loss of face to go up against your
number one competitor ... and possibly come out the loser?

If you're up for an ass kicking, fine, knock yourself out. Or if you KNOW you WILL take the top slot come hell or high water, by all means, go for it.

But what if your eyes are bigger than your belly? What if all the signs are there and you see them and ignore them? Or worse, what if all the signs indicate you don't have a prayer and you pretend they don't exist?

Who's head would be on the block?

In battle, unless one's generals have significant reinforcements just over the lip of the hill, out of sight of one's enemy, it is easier to defend the turf one already has a strong foothold in than it is to storm the castle keep.

You hold the higher ground at the moment on your number 3 competitor. Would it not make more sense to maximize your efforts here, against this opponent than go head to head with a larger, and potentially stronger foe?

Apple have done something along these lines and continue to do it and most people understand—that is, it's most people's perception—that the "I'm a Mac. I'm a PC" campaign is aimed at Microsoft.

Yet Microsoft don't make computers and, according to Amazon.com, their best selling laptop is the HP Pavilion G60-230US, while the Macbook is their second best seller, with Apple also holding four out of the ten top Amazon spots, HP holding three, and Toshiba equalling HP with three spots all in the top ten.

I think the trick to gaining ground is to make your brand occupy more of the mental landscape of your intended customer (the one currently loyal to your branded competitor) than their preferred brand currently occupies.

To do this, you must out benefit and out value your enemy with the tools of heightened perception, greater salience, and more fruitful persuasion.

Your message must re-value and redirect your prospect's perception of value, quality, and gains when compared to another brand, whether it's number 1, 5, 68, or 2,393.

Naturally, I could be wrong on all this. Wide of the mark and shy
of the goal. And if I am? Well, I hope to be (and need to be) put firmly in my place and corrected by someone far more knowledgeable than me.

I hope this helps.

Gary Bloomer
Wilmington, DE, USA

Paul,

I would suggest if you have not already done so is to understand why your current key customers buy from you and not your competitors.

This will provide answers and guidance on your key point of difference that you can then communicate to others who have a similar profile to your current customers. This is easier and more profitable than chasing someone else's customers.

I would do things. Firstly, I would stop lookingg at PRICE in itself and instead look at Value and help ypur customers see value. Value = Benefits/Price....so see what you can do to add benefits that really don't cost you any more and Value to customers will improve. For example, a Service Station whose team automatically cleans the customers' windscreen makes adds some "good feel" to an otherwise mundane activity.
Secondly, outside of price competitiveness, what can you be famous for? The one thing that's important to customers that you can do really well. Let's say it may be your friendly staff. Become famous for friendliness and make it live at evry customer touch point, dr

Take a page from Avis ("We Try Harder"). Don't just say you're #2 - show what value added services you provide that #1 doesn't, and keep highlighting your underdog status.

So picture a ladder representing your "highly commoditized" market category or segment.

First Rung: Top efficacy and premium image
Second Rung: Your brand, in between?
Third rung: Price leadership, weak efficacy and cheap image

1. You didn't say the first position is based on the most sales. Or if these are public companies allowing competitors to know the sales numbers. I would say that unless these numbers are known by the customer base, then perceptions are the real basis for each position.

2. highly commoditized leaves room for some branding elements. The elements you have identified so far are premium image and efficacy.

3. If there was a third or fourth branding element, one or two other words that represent anything significant to the customer, those words could be a basis for a positioning strategy.

4. Your stated goals are to survive and take the #1 spot (on the existing ladder) As has been pointed out form the above poster, you can have security of survival and profitable growth from your number two position.

5. Another option is to create a new ladder, and then claim the "first rung" position on this ladder. Remember these positioning hierarchies are only as real as the perceptions in the minds of your customers.


Hopefully, this gives you some more information to help think about your strategy. But the answer to "how will my brand survive profitably and possibly take the #1 spot?" is unknowable without a great deal of research and analyses. Based on developing many such strategic platforms for commoditized segments, I suggest your angle or solution of differentiation will come from the service aspects of your business - perhaps you can use the perceptions of service as the basis for a new ladder.

Hope this helps,

Steve