Securing second

Most acorns don't survive the forest because they fall too close to their oak trees. Falling too close means they don't get enough sunlight to germinate and grow; so they die. Similarly, any brand that tries to grow too close to the leader is likely to suffocate and die too.

The ones that grow into oak trees are those that fall some distance away. Hence, survival demands a certain separation. The creation of new species is determined by this natural principle; and it applies to business too. The principle of staying away from the leader has led to the success of many No. 2 brands.

Many brands however fail to recognise this principle. Perhaps it has something to do with our motivation. In The Origin of Brands, Ries & Ries explain that the driving force of human nature comes from two directions: the desire to confirm and the desire to be different. When it comes to building brands, the desire to confirm to the leader brand or the desire to do a slightly better job than the leader brand seems preferable. But both these strategies are often self-defeating. In spite of doing everything that McDonalds does, Burger King fails to match McDonalds’ revenues. Burger King’s emulation strategy is able to sell only a third of what McDonalds sells. The doing-it-better strategy hasn’t worked either. Avis never overtook Hertz, Reebok never overtook Nike, and Pepsi never overtook Coca-Cola. Therefore the desire to confirm or the desire to do it better isn't always useful.

In most cases, leader brands have been overtaken by No. 2 brands when they stay away and apply the desire to be different - often taking opposite positions. BMW's fight against Mercedes Benz offers a lesson. Recognised as the world's most prestigious car brand, Mercedes Benz is known for its big, spacious, powerful, luxurious cars that emphasise on smooth ride and comfort. By positioning itself as ‘The ultimate driving machine,’ BMW ensured its cars are smaller, lighter and more fun to drive than the big Mercedes Benz. BMW now outsells Mercedes Benz in many markets globally. Therefore staying away and being different is particularly useful.

There are two ways to build a brand: either be the first and establish your own brand as the leader, or be the second and establish your brand as the opposite of the leader. Instead of securing a strategically solid second spot, many brands perish in their attempts to overtake the leader. Even a brand as big and powerful as Google isn't exempt. Google launched Lively as a virtual world to compete with Second Life. Google launched Jaiku as a microblogging service to compete with Twitter. Both Lively and Jaiku went for the leaders and perished.

Just like the notion that leader brands don't do anything stupid is greatly overrated, the notion that there's plenty of room for second place in the world of business is greatly underrated. The essence of a good marketing strategy is to know when you can win and when you can’t. And if you can’t, it’s smarter to secure a solid second that dying going for the first.

1 comment:

Sbeu said...

Great article Praveen.

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