Brand strategy: Mass market, the niche and Coke

Teachers, speakers, gurus and consultants drill into the minds of business owners the importance of targeting, segmentation and positioning. There is an abundance of advice available on why and how you shouldn’t try and target a broad group.

But playing devil’s advocate, isn’t it sometimes better, even more appropriate to cast the net wide? It works for Apple (especially at launch), Argos (the high street retailer with a  catalogue in 70% of UK homes) and of course Coca Cola.

 

Especially when you consider Andy Warhol’s famous quote:

   “A Coke is a Coke and no amount of money can get you a better Coke than               the one the bum on the corner is drinking. All the Cokes are the same. Liz                 Taylor knows it, the President knows it and the bum knows it.”

Coke distributes 1.7 bn drinks a day and as a business is more interested in converting the 585m Facebook accounts that DONT currently subscribe to their page rather than the 25m that do.

Most companies claim to serve the customer. But don’t be fooled. These companies are in it for themselves. Coke’s global business strategy is to ensure that anyone, anywhere, can get their hands on a Coke if they want one.

Which begs the question are you concentrating on making a fantastic product and service that is delivered exactly the same to whoever buys it, or are you killing yourself trying to bespoke to niche customers over and over? Might just be worth thinking about.

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Why operating in the niche might be flawed

The 2011 Sunday Times Rich List was published this weekend and unsurprisingly, the billionaires leading the pack, for the most part, hail from businesses that touch the lives of millions.

Most of us can only dream of creating this much wealth and it is hardly a great lesson in entrepreneurship when you consider the following:

1. Lakshmi Mittal, steel, worth £17,514m (down £4.936bn)

2. Alisher Usmanov, steel, £12,400m (up £7.7bn)

3. Roman Abramovich, oil and industry, £10,300m (up £2.9bn)

4. The Duke of Westminster, property, £7,000m (up £250m)

5. Ernesto and Kirsty Bertarelli, pharmaceuticals, £6,870m (up £920m)

6. Leonard Blavatnik, industry, £6,237m (up £3.237bn)

7. John Fredriksen and family, shipping, £6,200m (up £3.45bn)

8. David and Simon Reuben, property and internet, £6,176m (up £644m)

9= Gopi and Sri Hinduja, industry and finance, £6,000m (new entry)

9= Galen and George Weston and family, retailing, £6,000m (up £1.5bn)

11. Charlene and Michael de Carvalho, inheritance, brewing and banking, £5,400m (up £1bn)

12. Ravi Ruia, energy, £4,900m (new entry)

13= Sir Philip and Lady Green, retailing, £4,200m (up £95m)

13= Hans Rausing and family, packaging, £4,200 (up £200m)

15. Joseph Lau, property, £3,937m (up £112m)

16. Kirsten and Jorn Rausing, inheritance and investment, £3,900m (up £400m)

17. Anil Agarwal, mining, £3,810m (down £290m)

18. Vladimir Kim, mining, £3,500m (up £340m)

19. Sir Richard Branson, transport, internet and mobile phones, £3,085m (up £485m)

20. Nicky Oppenheimer, diamonds and mining, £2,900m (up £1.4bn)

What can we learn from this?

1. Real financial success takes time. Businesses that last are scalable and durable. Richard Branson started in records in the 1970’s but it is now his Virgin Atlantic business that keeps the whole group ticking over.

2. Have a decent target market to go at. Finding a gap is one thing, but ultimately looking for a market in the gap is more important than looking for a gap in the market. The Hausing family is behind Tetrapak. Any liquid kept in your fridge over the last 10-15 years has been in one of their packs.

3. You need to go national, or better, international. Companies that, for example, benefitted from the UK public sector gravy train are now realising that they should have developed their business and reached further afield when they had the chance. The company owners that have been working internationally have been relatively unaffected over recent years.

4. You need resource. Scaling up costs… in terms of people, equipment, and technology.  But smart companies, like Mittal, plan capital expenditure over the long term, calculating future demand and spreading the investment.

Are you operating in a niche and running out of customers? You may need to broaden your horizons or re-evaluate what you offer and who you offer it to.


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