In class, we discussed the importance for a company, before entering an industry, to analyze “attractiveness” of the industry. Are there lots of barriers to entry? How significant are threat of substitutes? How large is bargaining power relative to price/other factors? These are some questions that a new entrant needs to answer. A new entrant such as WIND mobile, launched in December last year, has been struggling to answer these questions. In an article published by “Marketing Mag”, it mentions how WIND “hasn’t been able to attract significant customers.

First of all bargaining power is high…because bargaining power, although a force in its own right, can be associated with threat of substitutes. High number of substitutes (Telus, Rogers, Bell etc) can give high buyer power, give consumer options. Another influential force behind WIND’s struggle is rivalry within industry. This rivalry within, is a result of these companies providing loads of features/flexibility to customers whereas “Wind customers have had network problems and have been unable to buy the company’s phones or pay their monthly bills online”. With Rogers and Bell well established and Telus also gaining ground, the rivalry that these companies highlighted shifted WIND to struggle.

Article Link

Article

Press, Canadian. “Wind Mobile struggling after ‘launch in haste’: industry report.” Web. 9 Oct 2010.

Images

“WIND Mobile Logo.” Android Canada. Web. 9 Oct 2010.

“Rogers Logo.” BGR. Web. 9 Oct 2010.

“Bell Logo.” WordPress. Web. 9 Oct 2010.

“Telus Logo.” Rethink. Web. 9 Oct 2010.

The last recent posts have mentioned strategy as cementing a unique marketing position in the consumer’s mind and this post will show that this is done specifically through points of difference (PODs). In class, we talked about the example of The Body Shop’s value proposition of being humane, being natural, against animal testing etc. These points of difference, created a unique position for the company as competitors (L’Oréal, LUSH etc) did not highlight these points. Consequently the company was well established in the consumer’s mind. KFC is another example, where it gained competitive advantage through POD. KFC is well known (notice, they’re “well known”, highlighting already how much of a unique marketing position they have established amongst consumers) for the ingredients it uses. KFC has kept emphasizing that its chicken is different (when compared to competition), and as Colonel Sanders mentions (in the video below), he says their chicken is “entirely different but still tender and tasty”. KFC highlighted (and continues to highlight) how “unique” its ingredients are. KFC has long ridden on this particular point of difference, and as a result gained competitive advantage, in addition to establishing a respectable position in the consumer’s mind.

Video

“Colonel Sanders Botches KFC Ad.” Colonel Sanders KFC Youtube. Web. 5 Oct 2010.

Image

“The Colonel, KFC Logo.” Polls Boutique. Web. 7 Oct 2010.

In class today, we were talking about strategies (“establishing a unique market position” to achieve long-term goals), and as mentioned in my previous blog, is closely related to brand positioning. In brand positioning, we were stressing on the importance of cementing yourself in the consumer’s minds by establishing a unique market position (to win over the battle for the consumer’s mind as there’s a constant overflow of information consumers receive). So, it’s important to be distinct from everyone else to gain competitive advantage and also potentially be #1 in a category/segment in the market as a result. The clover ad (see below) is an excellent example.

The ad emphasizes on “mixture”, its product being in the middle between, butter and margarine, taking the best of both and combining into 1 product. Clover established “a unique market position”, positioning itself separate from its competition (butter and margarine products) and creating it’s own category (mix of both butter and margerine), so it could become no.1 in that category. As result, it created a unique market position, along with gaining an unoccupied position in major segment of the market (Mixture of butter/margerine)

Article

“What is Strategy.” Michael Porter. Harvard Business Review.
November 1, 1996. Online Print.

Video

“Cover Advert 2010.” Clover Youtube. Web. 7 Oct 2010.

Image

“Clover Logo.” The Telegraph (UK). Web. 7 Oct 2010.

In Michael Porter’s reading of “What is Strategy?” (article), it was clear to everyone that Porter kept emphasizing on the idea of “establishing a unique position”. He kept on saying that differentiating yourself from others and cementing yourself as a unique figure in the market is tied very closely to strategy. Then, I realized that this also very closely connected to the idea of marketing, when the other day, we were talking about how firms engage in the “battle for the consumer’s mind”. Porter’s point can be related to the point made in the other class that there’s such an overflow of information these days that there’s a need for companies to stand out and demonstrate (to the consumers) of being distinct from everyone else. This is where strategy was being highlighted by Porter…creating that unique position to gain the competitive advantage by standing out to the consumer out of all the overflow of information. It was interesting to see that connection between the two classes (talking about “battle for the consumer’s mind” in one class and strategy in the other), and also looking into the significance of this connection, in addition to realizing the importance of Porter’s point.

Article

“What is Strategy.” Michael Porter. Harvard Business Review.
November 1, 1996. Online Print.

Images

“Porter’s Five Forces Diagram.” Vector Study (US). Web. 6 Oct 2010.

“Marketing Groups.” Burning the Bacon (US). Web. 6 Oct 2010.