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Branson 101

Branson 101

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Published by Jake Pearce
In marketing, entrepreneurship matters more than ever
In marketing, entrepreneurship matters more than ever

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Published by: Jake Pearce on Mar 02, 2009
Copyright:Attribution Non-commercial


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Branson 101

In marketing, entrepreneurship matters more than ever
Saturday, 1 December, 2001

Down at De’Amalfi Survival, near Auckland’s waterfront, they’re doing something remarkable to safety helmets. De’Amalfi makes a lightweight communications helmet for use in noisy places like coastguard vessels and war zones. Other helmet makers build complicated microphones in booms that wrap around the face — which can distract the wearer and cause injury during a fall. No one else has put a microphone and transmitter in the shell of the helmet, where it picks up vibrations from the wearer’s skull and sends them back to base as speech. The breakthrough design is currently being trialled by Canadian police, the US coastguard and a film studio. Sales of up to $US90 million are pending. There’s a lesson in this. What De’Amalfi is doing to helmets, Dyson did to the vacuum cleaner, Absolut did to vodka and Branson did to airlines — they so fundamentally progressed a product it now occupies a category of its own. By anticipating trends, they shape products and services to meet demand — demand no one else has even noticed. They’re entrepreneurial marketers and New Zealand desperately needs more of them. Many Kiwi marketers I meet choose to limit their activity to the rather safe tasks of meeting “overt” and “covert” needs. They’re safe because they’re definable. You pick up overt needs by simply doing quantitative research. Execs at Coke, say, will crunch through research telling them 25% of consumers are choosing Diet Coke. Suddenly, SpriteLite is born and is expected to get, say, 25% of the market. No sweet, no sweat. You discover covert needs by doing qualitative research. This is where the product is not necessarily asked for, but the need is articulated once you start poking around a bit. Someone in a focus group might complain about how those milk cartons always dribble and, hey presto, you’ve got Anchor’s pourable milk bottle. “Overt” and “covert” have been the lingua franca of marketers since World War II. They usually deliver sound results and they’re easy to sell to the board because, well, whoever got sacked because they gave consumers what they clearly want? But you’re unlikely to get horribly rich, either. That’s because in a fiercely competitive market, incremental improvements deliver only incremental gains. Marketing to overt and covert needs restricts you to a few approaches. You can introduce brand extensions (such as SpriteLite) or try to capture an increasingly smaller share (first there was coffee, then there was a latte, then a trim latte, then a trim latte with GE-free soy milk ... ). Another approach is to simply scrap over market share. Wine, now a supermarket commodity, is heading in this direction. With the same-looking products being offered, the main marketing effort is going into labelling, packaging, securing shelf space, point-of-sale and maybe co-operative initiatives with other food manufacturers. Discounting, that plague of the beer industry, is not far away. Each of these strategies can be exhaustively tested and measured down to the last decimal. But like trench warfare, they’re exhausting, costly and most often won by the biggest army. Adam Morgan, author of marketing text Eating the Big Fish, writes: “If you are small and the enemy has got big guns, don’t kid yourself guns are the answer — come up with a new way to

deal with the war.” Hence the birth of “challenger” brands such as Absolut, which realised it could not compete on prove-nance: Russia is vodka. Absolut created a new category (“lifestyle” vodka, spurring a series of copycat brands) and remains in the top 10 spirit brands worldwide. Challenger brands are in the business of identifying and meeting “latent” needs. Sometimes, in the case of Dyson, they go as far as creating need. The gains to be made in meeting latent needs are potentially enormous because, for a while, you’ll be the only one in the new category — plus you’ll be stealing market share off the old rivals as consumers move up the curve with you.

So how do you migrate up the demand curve? One way is to try thinking about how the great marketers — Sony, Vodafone, Disney and so on — have transformed their own categories and how they might transform yours. What would Branson do if he set up shop next to yours? It’s worth a thought.
You can read up more on Jake Pearce at http://www.jakepearce.com

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