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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]
Now, that's not always true. I don't think there will be another eBay. After that milliondollarhomepage guy in the UK made a million with his pixel ads I don't think any of the countless clones will ever break into the four-figures. Some companies are the first and just stay there.
You need to have both a unique idea but also be aggressive in building the moat. It's what separates an Amazon.com from a Netscape.
I think the worst part of this is that I'm sure we have all had great ideas that came and went -- either because we never had the time to develop them or because we didn't respect the gravity of our own vision. Sometimes it's like walking away from a slot machine only to see the person behind you hit the jackpot. It's why I hope folks seeing your post flesh out their ideas and strike first AND strike hard.
It's the only way to make a difference.
Friendster was first to get into the social networking for twenty and thirty somethings who liked to party. LinkedIn was the first to target corporate types. MySpace happened to be very successful with teens which is why they have such a rabid user group. All three are separate and defensible market segments.
Although it is far before my time, I suspect McDonald’s kept market leadership over Wendy’s because it was the first to not only create that Moat by targeting the younger crowd with playgrounds, but was quick to adapt to changing technology such as drive through speakers.
In the internet world, the moat also involves thinking of a domain name that is easy to spell and easy to remember and gets significant publication. I find this is no longer easy with the current rampant domain name speculation and advanced SEO techniques.
or was it 'fast', anyway the principle is the same. But then McDonalds, at the time, provided quick fairly bog standard hottish food to kids, and we all know what kids are like for their burgers and chips.
But food is like sex - it will always sell, as the pub and clubs empty out and people are always starving after all the booze anyway, nothing special there really. I think they succeeded because the food was quick and tasty. Mcdonalds supplies kiddy type stuff, which quality-wise, ain't that good and nutrition is zilch, but you are always assured of what you get when you buy and kids will eat anything anyway. They won as they were the first to roll out a chain, and played power games, but with the many lawsuits against them and bad press in general they've certainly taken a downward spiral. It was a good idea at the time and they did a good job at milking it for everything it was worth, but I think fast food has had it these days and everyone is so health concious, health foods is the way forward as a successful model.
I think the same rules apply to marketing on the web.
People who read "Positioning" usually don't grasp that its rules rarely have any relevance for small entities (like 99.9% of all websites). It is possible to hold a market position in the consumer mind for an automobile; it is not possible to hold a market position in the consumer mind for a basin wrench. The former is something everyone has to buy and offers high enough volume/profits to pay for establishing a market position. The latter is something a minority of consumers buy, buy perhaps once in their lifetime, and does not offer nearly enough volume/profits to pay for establishing a market position (among plumbers perhaps, but I'm talking about general consumers).
When you're fighting it out in the top 100 high-traffic sites to be the most profitable news site or medical reference site, positioning can matter. When you're slogging it out in the Long Tail, where search terms are obscure and repeat visitors are not the norm and visitors are more likely to remember the Google term that located you than to remember your website name, positioning is non-existent.
I am working on a plan that focuses sharply on responding to key word volume yet has a consistent theme. I also am working on material designed to encourage the visitor to stick around for a few extra pages.
Does anybody agree with me about
1. Keyword focus rather than worrying about positioning.
2. A longer term strategy with a theme that will build repeat traffic.
Number one is designed to pay the rent.
Number two is designed to provide a payoff for determination and consistency.
Of course this is not a "get rich quick" scheme. But does it ring a bell with anybody?
Coming up on 10 years online with primary DN, recently got myself one of those stats accounts from you know who, and compared to my standard host server stats app. (which is pretty good) the results are eye opening.
Always had the traffic, and a resaonable number of page views/time spent etc., but not neccessarily the "sticky eyeballs" on entry onto sub pages, so I'm now able to tweak my site and am doing some design revision or updating, and the results are already paying off.
Existing traffic, while down due to industry seasonal factors, is not leaving sub pages on entry, staying around longer and visiting more pages while there, which means conversion.
Have to wait a while to start getting stats on longer term repeat traffic, but the trends are what I would expect to see. WooHoo!
Go for it.