Category Archives: Marketing

How well you know your competition plays a major role in your success. But let alone knowing them, it’s not always obvious to mark the competition right. It’s like marking the target for a shooter. Even the ace shooter can’t win if she is not able to mark the target right.

Take credit card networks for example. There is Visa, Master Card, Discover and American Express. Primarily competition here is with cash and checks. These networks are in some way competing against each other as well, but their main competition is other forms of payment. If you look at all forms of payments as the whole pie, and credit (and debit) cards as a part of that pie, it makes sense for each of these companies to increase the share of cards based payment first and compete with each other next.

There are so many other examples where competition becomes clear when you look at the broader purpose your product is trying to solve. Vending machines compete against retail stores and outlets, Google adwords is primary competing against television channels and print media for ad dollars and so on.

One interesting case is to spot a competitor when the competition is not really trying to compete with you. Consider bottled water for example. Who are these bottled water manufacturers competing against? Their primary competition is free-flowing tap water. No one is marketing or selling tap water. It is free, it is always there and (in most cases) is abundant. Bottled water manufacturers want people to trust and drink water packed in a bottle more than the free-flowing tap water.

In each of the cases we discussed here, there is competition amongst competing brands in the same category, but we need to make sure we don’t lose the complete picture and miss the primary competition.

There is one special case where you are competing with a previous version of your own product. For example Office 2007 when released competed primarily against Office 2003. Same is true to a large extent in case of progressive releases of monopoly products like iPods. This makes competition more interesting because you are in a way competing against yourself. You are out doing yourself and maintaining pace against smaller competing brands.

Knowing the right competition can help you tune your marketing message accordingly, place your product in the market appropriately and do your future product development with the right target in sight.

In 1948, Dick and Mac McDonald’s opened a self-service drive-in restaurant. The menu was limited to nine items and service was faster than anyone had seen before. In 1954, Ray Kroc,52, first saw the operations of the McDonald’s restaurant and was fascinated by it. He had an epiphany and started his career in hamburgers by buying worldwide franchise of the restaurant from McDonald brothers; opened his first McDonald’s in 1955 and by 1965 there were 700 McDonald’s. Rest is history that defines the biggest fast-food chain in the world.

McDonald brothers perfected the operation of making and selling fries and hamburgers. Ray Kroc took it global and made McDonald’s a world icon. This is a perfect example of two different set of skills you need, one of a perfectionist to create a perfect operation and another of a visionary to take it global.

Who made McDonald’s “McDonald’s”? Ray Kroc.

It was Ray Kroc who picked it up from one store in a town in California, believed in the concept, set a perfect system to replicate the operations, built a team of great people and set McDonald’s as a world renowned brand. Without the vision, passion and risk taking ability of a Ray Kroc, McDonald’s would have been a great hamburger and fries joint in San Barnardino, CA just like Thai Tom is in Seattle, WA or Aravind Eye Hospital is in South India.

Both Thai Tom and Aravind Eye Hospital are great examples of a process made perfect by a unit at a certain place. But they are not yet global phenomenon because they don’t have someone with a vision and leadership to adopt them and take them worldwide. They are just like McDonald’s was in 1954, and for them to become “McDonald’s”, all they need is a “Ray Kroc.”

Most human beings have a habit to live in the state of denial. Businesses take it a step further…go on record with their denial and then deny that they were ever in state of denial, sometimes decades later. We can describe this as the human touch of doing business. American car companies were in state of denial when Japanese started exporting cars, Sears rubbished Walmart, Yahoo! and Microsoft were in state of denial when Google was growing and Sony et al ignored the shiny white thing Steve Jobs introduced. The list can go on and on.

Any individual caring about his or her PR today cannot ignore twitter. Denouncing twitter as intrusive or waste of time is perfect symptoms of being in state of denial. Along the same lines, businesses cannot ignore the growing importance of social media. Your company is out there. You can remain in the state of denial and let it bounce like an orphan, or leverage the power of social media and reach your target audience where they want to talk about you.

We need to get out of this state of denial. The best way to do this is by relying on facts. Trust facts. Look at facts as they are, don’t try to decode them your way. Believe in numbers. Numbers generally don’t lie unless you want them to. The idea is to be adaptive to the world around us. Change is constant, we need to move forward by leveraging the change. It would be foolish to suggest against doing due diligence and getting randomized with every activity out there, but do your research with an impartial mind to reach to an answer, not to validate the theory you conceived while denying the facts. The sooner we come out of the state of denial, the better off we are as compared to the people who are still living in it!

Googling, tweeting are parts of our everyday vocabulary. Netflixing and kindling are not! So here’s a million dollar question: what takes it for your brand to be used as a verb? Brand becoming a verb is immensely powerful. The most important thing being it gains top of the mind brand positioning. Think of search engine and Google comes to mind or think of spreadsheet and Excel strikes you instantaneously.

One argument on what takes for a brand to be verb-ized is that the name should have the potential to verb up. That’s true in some sense. A better way to put this would be if verb-ed up, the name should not have a preexisting meaning (like kindling or living in case of Kindle and Live search respectively). But more important things that play a role here are the widespread use of the product (of the same brand), superiority of the offering and the viral effect. When you keep using the same product again and again, and it is superior enough to dominate the product category, it becomes easier to be used as a verb. Viral effect does play a big role as well. It becomes easier to be used as a verb if the people you are talking to know what it means. Like it makes more sense when you ask someone to xerox it for you and you get a photocopy done.

But then verb-ization can sometimes be a double-edged sword. How often have you bought a HP machine and xeroxed on it? Xerox became so integrated in human vocabulary that sometimes it doesn’t strike us that Xerox is in fact a brand, which is definitely not ideal for Xerox. It takes a lot of toll to build a brand, and while it’s a dream for every company to take their brand to the point of verb-ization, it is important to make sure that the brand doesn’t become too generic to lose its identity. It would be really destructive for Google, the product, if people starts googling on Bing to make their next purchase or plan their next vacation!

P.S. Thanks to Nandeeta Seth, Rafat Sarosh, Miles Witherspoon and Shailesh Shah for their inputs.

Once upon a time, a business school graduate started selling Japanese track and field shoes from the trunk of his car. In a couple of years, the business became profitable enough to open a retail store. Then he started manufacturing his own line of branded shoes for track and field athletes. After mastering the shoe business, he introduced a line of sportswear for this sport. And in a couple of decades since inception, became the behemoth in the sportswear and equipment industry.

This is Phil Knight’s story and the building of Nike!

What is special about Nike is the strategy of returning to its roots in whichever sport it chooses to enter. Nike understands that what they do best is manufacture a pair of shoes. It started with track and field shoes and went on to design apparel and accessories for athletes in this sport. Then when they chose to move to some other sport like football, they first  started with making shoes for the football players. Their expertise in shoe designing and manufacturing helped them build loyalty in the football playing community. After establishing the brand, it made the entire ecosystem for the players of the sport from headbands to socks to the ball itself. Similar cycle went on to continue in each sport.

The idea is to embrace your roots to set a foot in the door and then build an ecosystem around it to grow in the industry. You got to choose what you are best at doing and exploit that core competency when you are going for extensions. If that’s something you present to a new set of customers, chances are they are going to love it. It will be comparatively much easier for you to enter this new market as well as launch other branded products in the market. To put it simply, identify what’s the shoe for your business and start with it.

Why do you buy anything? You buy a bottle of water because you are thirsty, you buy an iPod to carry your music around, you buy a luxury car to trade up. The list can go on and on. The basic idea behind buying anything is to solve a problem. This sounds so simple. Then why is anyone trying to sell anything? Why do we have sales people? What we need is a bunch of problem solvers trying to find solutions for our problems.

Put it in other words, the objective of sales team should be to find how a product can solve a customer’s problem. A customer is not going to buy a new suite of software just because it’s a new year and your product version should match the year you are living in nor are they going to choose your brand over the one they are already accustomed to just because you asked them to do so. You got to have a legitimate reason and the best reason is to make customers realize that you are solving a problem that is not solved by the current status quo.

McDonald’s may have a shot against Starbucks because they are solving a customer’s pain of making two stops to get breakfast and coffee and replacing it with a single stop.  Prius might win the race against traditional cars because it reduces the monthly spend by customers on gas. Xbox got an upper hand over PlayStation because Xbox Live enables people to play together and Netflix won over Blockbuster because it removed the trouble of going to the local rental store to rent a movie.

While developing a product and marketing it, it is important for you to think about the problem you are solving. When you understand the problem and try to solve it, your job is done. Selling will be a side effect which will happen during this process.