For the past decade, growth rates have defined success for most technological companies, FAAMG (Facebook, Amazon, Apple, Microsoft and Google). They all have one thing in common “winner-take-all” spirit by creating their own uncontested market place, demand and grow profitable. History and psychology have much to teach us about the future but little of it is new. We know for sure that businesses that want to enter in a market with a head-on attack of heavy or well entrenched competitors have not be very successful.
New markets are conquered by deliberate and skillfully executing strategies focused methodically by out maneuvering entrenched competitors. Business can achieve result or success only by mixing right thinking with right doing. For instance, Coca-Cola President and CEO James Quincey told CNBC on coffee strategy: We’re not going head to head with companies like Starbucks and Nestle. Coca-Cola’s acquisition of U.K coffee chain Costa was less of an effort to take on giants like Starbuck than a move to create a new type of coffee experience.
The daily pursuance of business success is an endeavor many entrepreneurs are figuring out with no foolproof. It’s always important to swim successful in the same sea with your competitors and if possible outcompete them. Companies need to aim higher beyond just compositing but rather focus on redefining their market in way that generates new benefits for their customers. They need to aim at creating uncontested market place, create demand and grow profitable if they want to thrive and last.
How, then, will businesses create uncontested market place, create demand and grow profitable but avoid head-on attack of well entrenched competitors. We don’t know all the answers, but a few things are clear. This article is designed to give businesses a framework for creating uncontested market place, create demand and grow profitable.
· Mobile Defense Strategy (Market Maneuvering)
Mobile here means moving. This involves constant moving from the old market space through innovation and market expansion or broadening into new market space. It requires a willingness to “go where no-one has gone before” (emptiness). That’s to relocate the battle grounds that put your opponent at disadvantage by getting to where your customers are first and your competitors aren’t.
The mobile business strategy move from existing market space into uncontested market space with the opportunity for highly profitable growth. Here, you need to go beyond competition and move to seizing, retaining and exploiting new profit and growth opportunities. In business you can win without necessarily wiping away your fellow competitors. You can avoid head-to-head fight and move strategically into smaller markets that require smaller investment and achieve relative market dominance that could guarantee you survival, growth and prosperity. This will help your business to dominant a healthy industry rather the sick and bloody one.
Go into emptiness, strike voids, bypass what he defends, hit him where he does not expect you, said Sun Tzu. Your company or business too can “go into emptiness” strike voids; bypass what he (competitor) defends by creating new products, entering into niche market, or entering into a new geographical market. For instance, CNN chose the first two strategies. In 1980 CNN defying US TV networks which use the same format, schedules and competed on popularity, professionalism, ability to report and analyse events. Instead, CNN went to where no one was there by launching real time 24-Hour news around the world. By going into emptiness (where no-one has gone before) CNN, Virgin Atlantic and Southwest Airlines avoided their larger competitors matching them to hit them where they least expected or were not prepare to defend.
· Market Penetration Strategy
One of the ways to build or create demand is through market penetration; thus to sell more of existing products to the same target market by attracting non-users, increasing usage or purchase rate through intensive distribution or aggressive promotion.
To increase share of customer, firms can offer greater variety to current customers. Or they can create programs to cross-sell and up-sell to market more products and services to existing customer .The online giant continues to broaden their merchandise assortment, creating an ideal spot for one-stop shopping. That’s why physical businesses like “Restaurants want share of stomach,” Car companies want to increase “share of garage,” and airlines want greater “share of travel” all of these are in the aid of penetrating their markets.
Winning in business is not achieved in completing one transaction; market penetration is the value of multiple purchases over time. Considerable evidence existed indicated that repeat customers spend more money and are more profitable. The long-life value of a customer accumulates into revenue of tens of thousands of Ghana Cedis. The world’s largest companies can attribute about 60%-70% of their sales to market penetration through their long-time serving customers. Create a lasting relationship between you and your customers as an excellent way to convert a series of transactions into lasting opportunities for all.
Many analyses showed that the return on marketing investment to existing customers can be many times (five time) greater than new customers. The greatest source of increased sales and profits is from those who know you and are already purchasing your products. Chan Kim and Renée Mauborgne mention that there’re three tiers of noncustomers a business can attract to penetrate its market.
o “Soon-to-be” noncustomers: they’re customers on the edge of your market waiting to jump ship. By understanding their growing concerns, a company can pull them off from the edge into their new market by offering a leap of values to them.
o “Refusing” noncustomers: they’re customers who consciously choose against your market either because they cannot afford current offering or find the offering beyond their means. By searching for solution and finding the key reasons for refusing, a company can convert those customers into their new market.
o “Unexplored” noncustomers: they’re customers distance or farthest from your market. By understanding what is important to them companies pull them into their new market.
· Market Focus And Customer Driven
The death of some companies is that they have not gain insight into their market opportunities or that the company is not well organized to serve and deliver what the target customers want and expect. They are not sufficient market focus, therefore cannot rightly identify their market segment they serve. Some too have rightly identified their market segments but insufficient prioritization of the market segment.
They don’t actually measure the relative attractiveness of each segment. To survive, and be successful, better segment your market, priorities the segment and focus on more profitable segment. Remember, everyone cannot be your customer, if you want everyone to be your customer no one will be your customer. Market-driven companies focus on researching current customers to identify their problems, gather new ideas, and to test proposed product improvements and marketing mix changes. Their efforts typically result in incremental improvements, not radical innovations.
Also, some businesses are not customer driven, hence they are not sufficiently organized to do good job of serving and satisfying customers. To succeed in business always remember that customer is the boss. Undertake activities that will make everybody (not marketing and sales department only) to have a deep culture of customer consciousness. One of the best rules for strategy development in this regard is to strive to find out what the target customers like and do more of it; and find out what they dislike and do less of it. This means spending time in the marketplace and seeing what matters.
One marketing expert puts it this way: “Engaging customers today requires commitment from the entire company. We’re all marketers now.” Thus, whether you’re an accountant, an operations manager, a financial analyst, an IT specialist, or a human resources manager, you need to understand marketing and your role in creating customer value. Yet marketers must find ways to get all departments to “think consumer” and develop a smoothly functioning value chain.
Sir Maurice Flanagan, the founding CEO of Emirates and the former executive vice-chairman of the Emirates Group, emphasized that Emirates is not just offering a way to connect people from point A to point B but is the catalyst to connect people’s dreams, hopes, and aspirations. As a result of its customer centric approach and integrated marketing campaigns (such as the Hello Tomorrow initiative), Emirates has demonstrated commitment, authenticity, relevance, and differentiation outside the travel industry. Today’s successful companies have one thing in common: Like Emirates, they are strongly customer focused and heavily committed to marketing.
· Focus On Market Expansion
The vast majority of entrepreneurial ventures did not steal their customers from any established business, but rather brought new people into a market. To Jack Ma, entrepreneurs never fear, competition is a fun part of business, entrepreneur don’t cry instead they make their competitors cry. Business is about wisdom not about killing and if you try to kill all competitors in your industry, then you’re a professional killer you’re not an entrepreneur. Break out of the narrow market, expand across chain of buyers, expand across the industry boundaries, and if possible add complementary product or service offering to help you provide total solution buyers seek when the choose your business.
Herb Kelleher Founder of Southwest Airlines recounted when Southwest Airlines was beginning, the prevailing “wisdom” was that only the well-off wanted to fly places. As the first low-cost airline, Southwest invited regular people into the skies and found huge success. Southwest didn’t drive other airlines out of business, but rather increased the total number of travelers. We weren’t taking business from anyone, we were growing the market. The focus of the entrepreneur should be the people who cannot get paid, or travel, or furnish their home. So in other words, we were just taking all of these people that had never flown and putting them on airplanes for the first time, Herb Kelleher added.
Jim McKelvey added that entrepreneurs that succeed, and rise to the top of their industries set out to build, not destroy. If disruption occurs, it is merely a side effect. The focus of the entrepreneur is on the horizon beyond the wall. Instead of competing head to head with other businesses rather create uncontested new market space and make the competition irrelevant. Appeal to a new group of customer, it could be adults, young married couples, young singles, or even avid readers depending on your type of business. W. Chan Kim and Renée Mauborgne in their classic book “Blue Ocean Strategy” said that “the only way to beat competition is to stop trying to beat the competition”. You can beat your competition today by strategically expanding your market boundaries and attracting non-users of your business today.
Apple’s iPod was not the first digital music player but it was the first to make buying, transferring and organising music fun. Similarly, the iPhone was not the first mobile phone to include a music player, web browser and e-mail facility, but it was the first to be simple and highly appealing. Here, Apple expanded the market through fun, simplicity and high appealing. These attracted more people to use Apple phones, hence it great success. This is telling us that what consistently separate winners from losers is their approach to strategy. The reality is that industries never stand still. They continuously evolve, operations improve, markets expand, and players come and go therefore focus on your market expansion.
· Exploit And Explore New Opportunities (Finding New Markets)
Market opportunity is the customer needs or interest or requirements with which a business can satisfy profitable. One of the business marketing roles is to search for new opportunities for the company and carefully apply Segmentation, Targeting and Position (STP) to be able to bring in business for the company. Philip Kotler contended that “marketing people need the skills of identifying opportunities (i.e. unmet needs or life enhancing solutions) developing and implementing plans that succeed in the marketplace.”
It’s sad to notice that some companies or businesses have not identified any existing new opportunities in recent year of their operation and not only that, some of the new ideas launch has largely failed. Peter Drucker asserted that “what underlies the current malaise of so many large and successful organizations worldwide is that their assumptions and ideas of that business no longer work.” Peter further stated that the apparent paradox cause of many companies running into challenge is that the assumptions on which the organisation has been built and is being run no longer fit the reality. It’s better to have a philosophy of killing your own assumptions, products, ideas with new ones. It’s much better to do it yourself than you’re forced by somebody and it’s very much better to have a growing out of business strategy than a going out of business one.
Good opportunity ideas can be generated or solicited from many source including customers, employees, suppliers and from competitors as well. Use customers’ feedback as source of opportunity for product development and product improvement. Through opportunity meetings with employees you can identify a lot of novel market opportunities least expected. Then the gap in your competitor’s product or service could be used to identify new market opportunities.
A good marketing is the art of finding, developing and profiting from marketing opportunities. Many of the ideas could also be gotten from environmental trends, tracking political, environmental, social, technological and legal (PESTLE) change.
You must identify, evaluate, and select target market opportunities and laydown strategies for achieving eminence if not dominance in target market. Philip Kotler observed that there are three main sources of marketing opportunities:
o The first is to offer something that is in short supply
o The second is to supply an existing product or service in a new or superior way
o The third is asking customers for their suggestions ( problem detection method)
A business will only succeed and make it big if it is willing to throw away the rulebook of head-on attack of well entrenched competitors, understand the changing market and attempt to lead it.
The idea of creating uncontested market place, create demand and growing profitable is an extremely simple concept that identifies how you must conduct your business to win but require out-of- the-box thinking. To think out-of- the-box, cease imitating and to cease imitating, make use of your imagination.
Mali Albert Shiebila is the Lead Marketing Consultant for MarketWell Ghana Ltd (MWG) in Bolgatanga, Upper East Region. He is also the CEO of Reliance Bookshop. He holds BSc in Marketing, Chartered Accountant (from ICA-Ghana) and a member of the same institute. He writes about relevant marketing topics and pieces.