There is a classic marketing book called "Positioning: The battle for the mind."
This book has been around for twenty years, and yet corporate drones like me are still milling around talking about how to effectively position our products.
The book argued that to win, you don’t need a better product to become the market leader, you just have to be first to market. Then all you have to do is not screw it up.
McDonalds was the pioneer in fast food and (as of three years ago) still had an amazing 42% of the market share of all fast food sold in America.
The corporate world is full of companies trying to beat an entrenched competitor. Pepsi had to spend millions of dollars to become a reasonably profitable number two behind Coke. Not that there is anything wrong with being Number two. Avis did very well in the number two spot, because as they proudly used to say… “we try harder.” But that is the problem. If you are first to market, it is easy. If you are second or third, you have to try harder. A lot harder.
If you are first to market, and you create a buzz, then you get huge amounts free advertising and invaluable word of mouth. Once you start to make money, it takes only a little of your profits to keep the brand alive and positioned in peoples heads as the first one they think of when they want your products or services.
When you want to blow your nose, you probably ask for a Kleenex. Can you name another tissue maker that you would trust your proboscis with?
I think the same rules apply to marketing on the web.
Match.com was the first pioneered online dating ten years back. They had free advertising, free word of mouth, and an established revenue stream. In the fast world of online dating however, startup costs are minimal.
So how do you fight Match.com? One way is to divide and conquer. Be the first with a niche service. Many dating services have emerged that have targeted subsets of customers Match.com did not necessarily want to be associated with.
The risk here is there may be more niche users with cash than you first realized. If you are too successful, you face competition not only from the little guys, but also the big players who are well established in the larger market. Match.com could decide to go after a niche it first ignored, like adult personals just like Yahoo decided to go after online dating.
Another approach is to be the best. Google did so many things right that it blew away all the competitors mostly by word of mouth. I first heard about Google in the news, I tried it, I liked it, I told my friends. I am one of those early adopter types, and making me happy is key to this approach in the short term. In the long term other things come to play. My friends want something else. They don’t like to play around with something new. They wanted it fast, easy and useful. Google catered to both the tech heads and the Mom & Pop users.
Another approach is to give something away for free. Microsoft does this all the time.
This is where Adsense comes in. But the same rules apply. Even if your target market could be defined as “the group of people who like to date… but don’t like to spend money… yet are easily distracted into clicking on a Google Adsense Ad”. If you are first to create a buzz around your product, then you will get the links for free along with the glowing reviews.
I think one of the lucky new comers is Myspace, which was originally designed as a community for bands. Kleenex also had similar luck, as it was designed originally to remove makeup. Instead of getting upset, both products gracefully accepted their new found market. Somewhat. Now all the teens talk about Myspace. If you are not on MySpace with 100+ friends linked in, who are you?
Craigslist focused on the geographical approach, and it’s success in free listings in the bay area allowed it to branch out into not only personal listings, but also go international.
So it is good to be first. In a defensible market. Which is cohesive enough to create buzz. But you also have to have a good name.
iPod is interesting in that regards. It was not first, second or even third Mp3 Player. Jobs packaged and marketed his brand so effectively that we stopped calling them Mp3 players and now just call them iPods. Creative sneers at Apple for being a brand company and having inferior products, which is true but also extremely profitable. Of course, being Apple, it didn’t hurt that they could convince the music industry to back iTunes. Just don’t forget the power of a good name. It doesn’t even need to make sense, it just needs to be easily remembered. Like back in the days when companies called themselves Blue Pumpkin or Pink Elephant.
I'd love to know what the experts think.
I apologize in advance for any factual errors. I am not an expert in soft drinks, fast foods or online dating. Now excuse me, while instead of researching my facts more thoroughly, I blow my nose with a Kleenex. Then I think I will go have breakfast at McDonalds with my girlfriend. Who I funnily enough met on Match.com.
[edited by: caveman at 10:55 pm (utc) on April 10, 2006]
[edit reason] Removed some specifics per TOS [/edit]