WHAT WE THINK ABOUT WHAT YOU THINK ABOUT.
For about as long as I can remember, I’ve been aware of the idea of strategy. Back when I played middle school football, we learned about two big strategic principles: pile up resources at the greatest area of need, and (contrariwise) deploy resources away from the point of contact, to A)trick the opponent into deploying their resources poorly (play action pass), or B)dilute your opponent’s resources in hopes of a mismatch (stretching the field with a fast, deep-threat wide receiver, in order to create opportunities over the middle).
In marketing, examples of these two tactics might be:
Concentration of resources:
• A retailer spending a majority of advertising budget between Thanksgiving and Christmas, to coincide with consumer behavior
• A manufacturer assigning a full-time rep to a single customer company, in order to cultivate deep relationships, secure the customer’s loyalty, and expand the footprint within that customer company
• Coordinating national, regional, and local advertising around specific “promotional” periods, and focusing messages on the specific offers of the promotion.
Generally, these are strength-against-strength tactics. They are very logical. And they will work, over time, given a solid product, a competitive price, and continuous, predictable demand.
• A retailer, recognizing the trend toward post-holiday sale shopping, saves the majority of its advertising budget for a post-holiday sale blitz
• A manufacturer who is well know in one industry, but less known in other industries, assigns a full-time rep to getting first purchases (trial) from customers in adjacent industries, while “milking” the industry in which they are established…risking that their products will become commodities in the established industry, as the threat the industry as a cash cow
• A manufacturer launches a directly competitive product with a media blitz in the hometown (or a strong market) of an established brand, forcing the established brand to “defend its turf”—the hope is that the established brand will over-react (overspend) or get distracted from their core business…creating opportunities elsewhere
• A brand with a cash advantage spends excessively in a market “owned” by a less liquid competitor, forcing the competitor to defend what it might otherwise have taken for granted…milking the competitors limited resources.
Of course, these strategies are all risky, and none of them can really be considered long-term strategies. Their purpose is to change the status quo, so it would be silly for someone to employ them who benefits from the status quo.
One problem with some upstart start-ups is that they become very good at contrarian tactics, to the point that these tactics become part of the culture. But, when they become the man, they are still culturally inclined to fight the man. They don’t know how to act like category leaders.
The job of the category leader is to promote the category. So, category leaders should use strait-forward, logical (boring) strategies, in order to signal to consumers, competitors, and vendors what the category is doing. This may seem charitable, but it really isn’t. A lot of people (probably most) want to do business with the confident leader. So, by successfully taking the leader posture, a company is effectively blocking competitors from potential customers. Think of Tide, Cheer, Crest, Gleam, Head ’n’ Shoulders, Clorox, and Shout. By being the voice vendors listen to for direction regarding how to sell to the category, a company puts itself first in line to negotiate the best deal with potential vendors. And by signaling to competitors, a leader gives itself a home field advantage.
Everybody else’s job is to take shots at the category leader, by slicing off niche markets, cherry picking high-value customers, and/or offering a mass-market alternative (me-too) choice to consumers. When number two becomes number one, the whole category can feel shock waves for a while.