In the classic book Positioning: The Battle for Your Mind, by Jack Trout and Al Ries, there is an ongoing thematic—the overwhelming value of being #1 in a market. The reasoning? It is extremely hard to dislodge the company that captures a position in the minds of target customers first.
Think about how long Coca-Cola has been the #1 cola (since the 19th century) or Hertz has been the #1 car rental company (since 1918) and you’ll get a sense for how difficult it is to displace the top brand in a market.
As we’ve learned in previous brand positioning tips, a key part of the brand positioning process involves deciding on the competitive frame of reference or references in which you’d like to position your company or brand. I emphasize references because one thing to consider is whether, in addition to positioning your brand in an existing market (where you may not be #1), you should be creating a new market in which you can be #1, because there is no one else in it yet.
Some leading business strategy thinkers refer to this as a “blue ocean strategy” where you choose to create or grow a new market rather than fighting in a competitive one that already exists (a “red ocean”).
From a brand positioning perspective, I often return to a similar principle I call the 1-2 punch.
The 1-2 punch is simple:
Punch 1: Grow the market
Punch 2: Lead the market you grow
Punch 1: You may compete in a frame of reference where you are not #1, but throwing punch 1 means putting your energy into creating or growing a different competitive frame of reference that didn’t exist in the minds of your audience before.
Punch 2: This is where you must really capitalize on the benefits of being an early mover in a market. If you throw punch one (grow the market), but do not effectively land punch 2 (lead the market you grow), you may find yourself in a world of hurt. Let’s look at a few examples:
In the 1980s, with personal computing still in its infancy, Intel came along with some incredible new ideas about using an innovative new technology called the microprocessor to shrink the size of computing devices. In the early 1980s, people still thought of computers mostly as room-sized adding machines used for businesses, rocket-launching, and complicated stuff like that. Why on earth would anyone ever want a computer in their small business or their home?
So Intel threw punch 1. They helped paint a vision for a world where computing could be done anywhere at any size. And they quickly followed it with punch 2, aggressively taking ownership of the market for microprocessors they helped create. Within a few short years, Intel was the dominant company in the microprocessor market, and one of the largest technology companies in the world.
As it turns out, Intel threw a pretty mean punch 2. Some of their tactics over the years to continue to lead the market they grew were viewed as aggressive, controversial, and even anti-competitive. But there is no doubt Intel has definitely protected the market, and they continue to be the #1 microprocessor company to this day.
Another good example is the work of Whole Foods in the late 1980s and early 1990s to grow the market for natural foods. What had begun as a niche market populated by small health foods stores quickly grew as John Mackey and Whole Foods began acquiring natural food stores and chains across the country. With a national presence by the mid 1990s, Whole Foods became quite successful at creating a natural foods value proposition that appealed to average consumers. Whole Foods grew natural foods from a niche market to a mainstream market by creating a broadly appealing value proposition. That was punch 1.
Punch 2? Whole Foods continued through the 1990s to protect and maintain their #1 position through a strategy that included acquisitions (including the acquisition of Wild Oats Markets), effective marketing, and an innovative corporate culture. Today Whole Foods has almost 300 stores across the United States, Canada, and the United Kingdom.
Finally, let’s take a look at TiVo, which popularized the DVR, one of the most-loved technologies of the first decade of the 21st century. TiVo did a fantastic job of throwing punch #1: growing the market for digital video recorders, primarily on the back of three huge benefits that consumers loved 1) you could get rid of your VCR and its flashing 12:00 display because a TiVo did everything a VCR did better and faster 2) you could skip commercials 3) you could pause live TV.
It was a wicked punch 1, perhaps one of the greatest in the history of consumer technology. One 2008 study showed consumers ranking the DVR the 2nd most essential piece of technology they couldn’t live without, only after the mobile phone.
A first punch that strong would clearly be followed be an equally strong punch two, right? TiVo would aggressively move to lead the market they helped grow. Well it just didn’t happen that way. For a number of reasons, including some currently being debated in a court of law, TiVo was not able to own the DVR market, and has lost much of its market share over the past few years. An aggressive punch one, without a punch 2 that matched.
What are the lessons here?
1) Don’t feel like you are limited to positioning your company or brand in existing competitive frames of reference. While you likely will want to have clear positioning in one or more existing markets, don’t be afraid to create a new market or grow an under-served one and claim your position in it.
2) If you do create your own competitive frame of reference, and are successful at doing so, don’t forget to protect it. Being #1 in a market brings with it huge advantages, as Jack Trout and Al Ries tell us, and is an advantage you don’t want to lose. Don’t throw punch 1 if you aren’t ready to land punch 2.
So that, my friends, is the 1-2 punch, a simple strategy to remember when developing your brand positioning.