How To build a marketing strategy designed To steal market share

Build a marketing strategy

By Tom Dougherty

Marketing as Warfare

build a marketing strategyMilitary metaphors work well for the field of marketing and advertising, and with great deference to the more serious conflict in Iran, we will look to both Napoleon and Sun Tzu for our foundation for stealing market share.

Market leaders were generally on a deliberate track to build category. In many ways, this is not as true today as it was in the past. Today, only a few market leaders can afford the luxury of simply building categories.

For those of us in the real world, who are not number one in the category, and who are being outspent and overshadowed in the market place, our brands need to steal customers from the competitive set. This is indeed marketing warfare.

Human Tendencies

Oddly enough, with careful planning and insight, you may in fact find an ally and advantage in the market leader. Brand messaging is often overlooked. Napoleon taught us that our advantage often lies in an understanding of human beings.

He tells us that there is often a deep complacency to be found in market leaders. “The great majority attends to what is necessary only when they feel a need for it — the precise time when it is too late. They take only their needs into consideration — never their abilities.” Sun-Tzu agrees. He tells us that we need to act boldly and with speed. “The nature of forces is predominantly swiftness.”

build a marketing strategy
Sun-Tzu in the original script

This is much more than just “get there first with the most” — it demands that we find an advantage and exploit it while our competitors wallow in the status quo. This advantage is brand. Most brands, particularly package goods and technology brands, believe this advantage needs to be found in a product attribute, some new innovation that allows their brand to build a unique selling proposition.

No one is downplaying the tactical advantages offered by product innovation; it is simply not where a brand builds long-term equity and is often unavailable and costly to develop. The good news is that the business world is full of successful brands that under-performed their competitive set. The world of video recorders is a perfect example. The brand messaging was tactical rather than strategic. (Read more about the Stealing Share process here)

Beta vs. VHS

Remember the old rule of thumb: be first in the market and the advantage will be yours. Well, back in the 80’s Sony’s Betamax was first in the market, and they had a superior product. Are you listening Apple Computer?

The war between VHS and Beta was about to begin, and with surprising results. The Beta format was clearly superior in the video image it produced (it still is). The cassettes were a little smaller and more compact.

build a marketing strategyIn addition, Sony led the market in innovation, producing the first stereo video recorders, and they were the first to bring in HQ technology. On top of this, they had one of the world’s most powerful brand names. People still leave the little sticker that reads “It’s a Sony on their TV screen — such is their brand equity. What happened? Remember what Napoleon said? “The great majority attends to what is necessary only when they feel a need for it.”

Well, Sun Tzu mapped out a perfect strategy for VHS to take advantage of this tendency. He said to, “Seize what they care about and you will own the advantage.” In this case, he was talking about the customer.

He went on to say, “Attack their weakness and emerge to their surprise.” VHS realized that what the customer cared about was not quality of picture but cost-effectiveness. This was also Beta’s weakness. Tapes running at this speed could only record a little over an hour. On top of this, blank tapes were expensive — almost $20. VHS machines offered a very slow speed (with poor quality, but this was not advertised) that allowed users to record up to 6 hours on a standard tape.

This attribute, (I would not call it an advantage), allowed VHS to gain in market share. It was not long before their sales were outpacing Beta. With the edge in penetration, they were able to persuade video rental outlets to carry VHS as well as Beta titles. Pressure from the rental industry to lower costs spelled the end of Beta in the US. The market supports only one standard. History tells us that convergence is inevitable.

Sony now distributes VHS machines in the U.S. Sun Tzu had words for Sony’s inability to capitalize on what was clearly a better technology, “Only those who deliberate carelessly and lightly view their enemies will be ensnared by the adversary.”

Sony was indeed ensnared. They believed an assumption that the American consumer would want a superior product and embrace its benefit. It is never enough to know your technology, you must know the customer (it is a mistake to confuse your customer with the broader market if you are looking to steal share).

This is fair warning to those of us that think a better product will carry our brand to victory over the competitive set. It is never enough. As Sun Tzu put it so eloquently, “Those sophisticated at strategy occupy undefeatable positions.”

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