| ||
| ||
|
Marketing Information | |
| Domain Names | E Books | Email Marketing | Ezine Marketing | |||
| Internet Marketing | Marketing | PPC Advertising | SEO | |||
| Traffic Building | Web Design | Web Development | Web Hosting | |||
| ||||||
|
| ||||
|
First to Market Theory
AGE OLD QUESTION Business scholars throughout the planet keep asking the same question and have come to the conclusion that being first into the market place is preferable. Preferable to what? They say every product has a life cycle? What about milk? If that is true and many academia will classify products and services in order to make a point and simply lump them all together. Is this correct? Yes and No. From a theoretical standpoint you could argue either side and have ample data in business history to prove the conclusion you desired. But in essence I would have to say that products and services are much different from each other in so many ways. For instance the reason for the purchase, the valuation, of that service or product for the purchaser, even the delivery and so on. Now it can be argued that there are some products that come with services and the product is not valued by the consumer without the service end of the equation. Maintenance contracts, almost a form of insurance are one type. For let us say a copy machine or something of that nature. Let us take a mobile service-based business model for this discussion. The reason being I am in the service business and have been for 27 years. http://www.washguy.com and www.carwashguys.com. Is it important to be first in the market? Yes or No? We have been successful competitors at both in various regional markets. If I had to chose, many times depending on the market I would say, I would rather be second or third in a market, evaluate the competition, interview the customers, redesign and define my service, use bundling techniques, price point targets, use their basis for my differentiations, and of course capture their customers. It is far cheaper and more economical to enter a market and skip the high costs of introducing a new service, creating demand or needs where none either existed or was thought of before by the user of such services, or educating and entire market segment and trying to convince them why we had something they needed and could not live without. So for those reasons I often prefer to take other companies clients by offering the consumer what they really want at a price they are more willing to pay or offering services so far superior that the customer felt impelled to switch. Try Sprints marketing for instance; "let me review your current long distance charges and let's see how much money we can save you?" Or better yet our Entrepreneurial legend of Europe Richard Branson. He was not really first at anything, just giving the consumer another choice and addressing their true desires. Does it work? Yes 50 brand names later, Virgin is a force to be addressed or relinquish the market share. This does not mean it works every time, but he can market to the consumers who have already chosen a certain service and simply offer them better. I talked with the marketing executives of Dominos Pizza at an International Franchising Association Conference and they discussed this phenomena with our team. Think of going into a country that never had pizza before and trying to convince them that they should all buy dough with melted cheese on top covered with other food items. They simply look at it and say I would rather have a Fajita Pita or worse what is this and why should I eat it? The first company in has to get everyone to try it and spend bu-co advertising dollars. The second company in only has to offer the pizza once the countries citizens have decided, Hey this Pizza Thing with the cheese and stuff on it, is not all that bad after all. Much easier sell. See the point? And it has been played out over and over again and guess what, the aggressive agile company can easily move quicker and with better profits once the service or in this case the Pizza is accepted by the masses. Now does Pizza have a trend cycle? It is food, and last time I checked people were eating more not less, judging by the sponsorship paid to that girl who gave head to the President by Jenny Craig. Oh yah, Monica what is her name? I have been watching this trend in markets and found more than ample opportunity to come in behind the spenders and simply take what we want as far as market share and leave the first in competitor to fight for the scraps we leave them. Chances are they have an exit strategy and when they feel their curve is declining jump out at what they feel is a mature market and take their gain or loss in some cases. Yet they fail to realize its full potential or maybe do not care and will look for another easy market or product line to enter, always trying to ride the up curve. Even if a company who is already in the market is a tough competitor, no matter, let us take Service Master. We would have nothing to lose as an entry into one of their markets and everything to gain. They on the other hand have nothing to gain only market share to lose. If they decide to fight and refuse to relinquish market share they must turn on the direct sales, advertising, and marketing efforts, thus expanding the market for us. So if they had a 15% market penetration and we were to take 2%, that leave them with thirteen percent. To keep quarterly numbers they need to increase the total market available to both of us to 17%. Also keep in mind that 2% of the two percent will be for us at no charge. That is truly free simply for seeking their unsatisfied customers and switching them. Now they must differentiate us from them thus spend more in advertising, which in doing so advertise that we exist and their customers actually do have a choice, it is a no win situation for them? Hardly an attribute for being first to market in my opinion? Hardly an advantage at the point of an entrant, a strong second to market competitor. If a second to market competitor slips in a price war because we have a nearly zero advertising budget using theirs to generate our expansion, then we can charge less. Let us say they charge $1000 for a given service and 15% is in sales and advertising. That means we can automatically charge 15% less than they do for the same profits. Faster ROI too. Also we did not have to pay the original marketing to get the ball rolling either. Very good deal. Why market when they already have simply ask their customers for the order and charge the less price. If they cannot handle it they can exit the market or spend more money to keep ahead of us until their own energy works against them. Similar to the Art of Judo. Diplomacy is the art of letting someone else get your way. So why attack the competition? It is not really an attack. It is imperative that as a franchisor I stay efficient to therefore use maximum leverage of available resources to help the franchisees, who invested in the business get their proper return to feed their families. So then, we have found that is far less expensive to take the competitions customers through superior service and lower or more fair pricing or bundling (what the customer many times feels is more important) than to ferret out new customers through blanket marketing of junk mail or telemarketing. So then why not simple forget the high dollar marketing unless of course you happen to be first in the market anyway. This is also a strategy preferred by scholars as the best possible scenario. Take the lead and hold onto for as long as possible. We have been successful at this approach too. It requires a different approach. Since generally we are in the lead I cannot discuss our strategies for this scenario on the Internet, but trust me, we play to win, whether we are in the lead or are ready to overtake the leaders. It is important for those who can offer products or services in an open market to understand that the "First to Market Strategy" may not be the best strategy all the time. "Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs
MORE RESOURCES:
Marketing - Google News |
|
|
|
RELATED ARTICLES
How to Promote Yourself Or Your Company Through Award Competitions There isn't a day that goes by that I don't receive some sort of announcement about an awards competition. We get so many, in fact, that I have created a special place on my website where you can learn about what opportunities are awaiting. Motivate Your Market Force IntroWant me to tell you something on how you can motivate your market force in 2005. I will do so today. Fundraising Letter Envelopes: How To Make Them Irresistible Readers spend only a few seconds deciding the fate of your direct mail fundraising appeals. Either they open them on the spot, set them aside for later, or chuck them in the waste paper basket. Marketing Copy - Brand Identity Guru Tips on writing great copy for your marketing efforts.It's just four steps that I call the Writing Path1. Top 5 Design Tips to Create Eye-Catching Marketing Materials Great graphic design looks effortless, but it requires lots of attention to details. Think back to an eye-catching advertisement, publication, or flyer you saw recently. Take the Logo Litmus Test Here is your C.I. Five Marketing Tips to Double Profits It's a startling fact: almost all entrepreneurs aren't marketing their businesses effectively. Marketing goes much deeper than advertising. CRM: Strategic Engine or Just Another Tool? CRM?strategic engine or just another technology tool? How would you answer this question about your company's CRM initiative? It depends on how honest you are in answering some other questions, including:Do your people have real decision-making power to provide great customer service?Do you have the right people with the right knowledge and skills?Are you including people across the board, not just in your customer service and call centers?The bottom line is that people skill sets need to be similar to the technology they are using -- information sharing needs to be fast, focused, integrated.Let's Start With the LeadersFor CRM to become the strategic engine, not just a tool that people opt to use when they choose, managers and leaders need to demonstrate the new vision through their day-to-day actions. How to Avoid the Line Extension Trap If you follow the prevailing logic of most modern companies, you will inevitably fall into this trap. Line extension is using an existing brand name or image and extending it to new products. Shine a Spotlight on Your Professional Service Firm As a life-long dancer, I know a bit about the importance of good preparation before performance. Before a dancer is ready for the spotlight, she has to master the basics including alignment, strength, flexibility, balance, choreography, and artistry. Viral Marketing Viral marketing involves the use of surf-exchanges, and if you don't know what a surf-exchange is, its a site that you can join, often for free, and exchange web page views with other members.You submit the website you wish to promote, and then you usually get a 'start page' that you load into your web browser and you start to view other web pages. 6 Article Marketing Smarts: How To Get More Reprints And Exposure Article marketing is the latest buzzword for marketers looking to promote their sites and products online. But how do you measure the success of your article marketing campaign? It probably depends on what you expect your article to achieve for you - better branding, more sales, or more publicity. Marketing and Advertising Techniques of Super Bowl Advertisers Each year, advertisers with super sized budgets sink millions of dollars into Super Bowl advertising. While most of us do not have a large enough budget to advertise on the Super Bowl, the commercials -- both past and present -- demonstrate several marketing techniques we can apply elsewhere. Give It Away Now - The More You Share, the More You Sell! Give away your knowledge, and you'll make money. How does this work? Isn't this counter-intuitive? Let's think about this. Mailing Lists - Keeping it Simple The right direct mailing list targets people who want your product or service.The direct mail mailing list is a key factor in a successful direct mail marketing campaign and a major point to consider in small business marketing strategies where marketing ROI (Return On Investment) is a key concern. Successful Non-for-Profit Fundraising Letters Share Eight Qualities You'll be encouraged to know that the art of writing effective fundraising letters can be learned. I learned it. Forward Thinkers Stay Ahead of the Curve What is it like from a marketing perspective to be yesterday's news? We rely on what is tried and true in marketing because it is usually safe, tried, and tested. It saves us time, as well, since we don't have to put on our creativity cap to craft an innovative strategy. Digital Printing vs. Press Printing - A Comparison Guide When it comes time to print your brand identity materials, there's one overarching question for you to consider - whether to print the resulting materials on a digital printer or traditional press. There are many differences between the two processes, some of which are outlined below. Planning Your Postcard Marketing Campaign Before you create your postcard, do a little planning. Ask yourself:1. Do You Really Need a Brochure? The phone rings. Good news.
|
| Domain Names | E Books | Email Marketing | Ezine Marketing | |
| Internet Marketing | Marketing | PPC Advertising | SEO | |
| Traffic Building | Web Design | Web Development | Web Hosting |
|
Home | Site Map | Traffic Building
| Free
Classified Ads | Free-For-All
Ads | Reciprocal
Links | Search
Engines | |
| Copyright © 2006-2007. The Highland Marketing Group. All Rights Reserved. |
|
| ||
|
