Sunday, September 18, 2005

Blue Ocean Strategy and Niche Marketing

Favorite Books
By Moje Ramos-Aquino, FPM

BLUE OCEAN STRATEGY: how to create uncontested market space and make the competition irrelevant
By W. Chan Kim and Renee Mauborgne
Harvard Business School Press (2005)

MARKETING (4th Edition): Real People, Real Choices
By Michael Solomon, Greg Marshall and Elnora Stuart
Pearson Education International (2006)

I am reviewing some corporate vision/mission statements and I notice that a number of companies want to be “the employer of choice.” How do you make that happen?

Authors Kim and Mauborgne suggest creating value innovation, i.e., instead on focusing on beating competition, you focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space.

“Value innovation places equal emphasis on value and innovation. Value without innovation tends to focus on value creation on an incremental scale, something that improves value but is not sufficient to make you stand out in the marketplace. Innovation without value tends to be technology-driven, market pioneering, or futuristic, often shooting beyond what buyers are ready to accept and pay for.

“Take Cirque de Soleil as an example. It did not win by taking customers from the already shrinking circus industry, which historically catered to children. Cirque did not compete with Ringling Bros and Barnum & Bailey. Instead it created uncontested new market space that made the competition irrelevant. It appealed to a whole new group of customers—adults and corporate clients prepared to pay a price several times as great as traditional circuses for an unprecedented entertainment experience. Significantly, one of the first Cirque productions was titled, ‘We reinvent the circus.’ They created a new market space and generated strong profitable growth in a declining industry.”

As a result of this Blue Ocean Strategy, Cirque attracted and kept star circus performers and many aspiring and highly talented artists.

Kim and Maugborgne suggest that while it is important to attract new talents, it is equally important to keep current productive ones. This is done by building people’s trust and commitment deep in the ranks and inspire voluntary cooperation through the use of Fair Process: engagement, explanation and clarity of expectations.

To help us do this, let us borrow some strategies from marketing. Authors Solomon, Marshall & Stuart writes about Sharpening the Focus: target marketing strategies and customer relationship management.

“Reebok started off as a British brand that became known in the 1980’s primarily for its aerobics shoes. However, while women were snapping these up, the company was not enticing many men tot buy its products. At around the same time, Nike began to stake its claim as the brand for “Winners” by signing world-class athletes in virtually every sport to endorse its shoes. Reebok was slow to react to this challenge and saw its overall market share quickly decline. The company eventually tried a “follow the leader” approach by signing its own athletes, such as Shaquille O’Neill and Emmit Smith, but it was too late—Nike already “owned” its position in the market as being the shoe for champions. In particular, Michael Jordan cemented Nike’s reputation as the brand to wear on the court, especially among teenage males.

“Reebok needed a new strategy to effectively target the youth market, but how could it gain credibility and respect among young men? Enter Allen Iverson, a barely 6-foot, 160-pound bundle of energy, movement and coolness. Iverson was a modern-day David among the Goliaths of the NBA, a player with whom kids could identify rather than idolize. Reebok thought he could become the face of urban youth—young, rebellious, talented, loyal to firneds and family, with an “I don’t give a #$%@” attitude. The more adults hated Iverson and said he was bad news, the more youth around the world embraced him and accepted him as their own. He was the perfect counterpart to Michael Jordan. While “Air” Jordan brought the game above the rim with his style and grace, Iverson brought hoops back down to earth with his unique “crossover” dribble. If the 1980s were about dunking and playing in the air, the late 1990s were about beating your man off the dribble. Over a period of six years, Reebok used Iverson to connect with youth and did a good job of changing its image from a brand worn by moms to their aerobics classes.

“Still, Reebok languished in the #2 position without a clear identity other than being the shoe that Iverson wears. Their star endorser was a key asset but not strong enough to single-handedly win the hearts, minds, and dollars of youth culture.”

Now, if you were Que Gaskin, vice president of global marketing, what options do you have and what would you do? If you are having a hard time keeping your highly productive, highly motivated talents and attracting needed talents, what would you do? Why would I want to work with your company? What is your niche, uniqueness, weirdness, competitive advantage that people could identify with proudly?


Human Resource Management
By Gary Dessler
Pearson Education International (2005)

Jack Welch and the 4E’s of Leadership
By Jeffrey Krames
McGraw-Hill (2005)

Super Networking
By Michael Salmon
Career Press (2004)

Coaching at Work
By Perry Zeus & Suzanne Skiffington
McGraw-Hill (2000)

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