Is the competition distracting you from becoming a market leader?

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What if Tom’s of Maine had tried to match Colgate or Crest feature by feature? Would they have ever succeeded? How about Netflix?

Unique product positioning is the key to success

Each of these companies entered markets where there was a dominant player—yet both succeeded. They understood, what many of us often forget, that satisfying the unmet needs of a distinct market segment is far more important than matching the competition feature-by-feature. While these are consumer examples, the same product differentiation principles apply for businesses that sell to other businesses.

A business-to-business example

In the early 1990s, tiny EMC decided to enter the disk storage market that was then dominated by IBM and other large computer companies. At the time, most people bought disk storage from their computer vendors. Few turned to other suppliers for products that were then treated as accessories.

EMC turned the market on its head with a three pronged approach. First, EMC positioned storage as a unique category—independent of the larger computer market. Next, the company identified and met unmet needs for faster processing time and a lower cost of ownership with a revolutionary design that addressed both concerns.

Finally, EMC penetrated the market by focusing on companies that had the greatest need for speed or lower ownership costs—and offered them money back guarantees if the units did not deliver the desired results. Shortly thereafter, the industry leader countered with a copycat product—and armed salespeople with feature-by feature comparisons--but never recaptured its market share.

Lead with a new category when penetrating a new market

There are many success stories just like these—where small companies enter a market dominated by a large player and gain significant market share. Nevertheless, these companies never achieve this result with a “me-too” product.

Instead, successful new market entrants study the market—and look for a market segment that has unmet needs that play to their own strengths. Then, they enter the market, but not before redefining the market altogether.

Unlike its larger competitors, Tom’s of Maine doesn’t sell dental health; it sells the overall health that accrues from avoiding chemical intake. Netflix doesn’t market the ability to view movies from your sofa; it markets the convenience of never leaving home to pick up a movie. EMC didn’t market storage; it sells faster processing and lower cost of ownership.

Elevate your business by positioning the competitions' solutions as commodities

These companies didn’t ignore the competition; they just didn’t allow the competition to distract them. Had they tried to go head-to-head with their larger, better capitalized and better established competitors they would have failed to capture attention or market share.

Instead, each delivered the basic benefits the market expected to receive. Then, however, they attempted to turn the basic benefits into a commodity by focusing attention on the unique value that only their solutions delivered. By positioning themselves as specialists, these businesses were able to able to attract and engage those prospects that most valued the benefits they could offer—and earn a price premium for doing so.

What category can you claim and garner a price premium?

So, the questions for you are:

  • Is there a new way to look at your market?
  • Are their segments that have unmet needs?
  • Do you have unique strengths that you could use to address those needs?
  • Could you establish a new category by meeting these needs?
  • Would the “needy” pay a premium for a solution that addresses these needs?

Capitalize on your success and accelerate revenues

Once you have a foothold in a particular market segment, you’re in the unique position of being able to learn even more about your target market. Then, you can enhance your current solutions—or add new ones to stay ahead of the competition.


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