How to Enter New Markets (& Why Products Fail!)

How important is product positioning in the marketplace? Whether you are positioning a product, service, or yourself, how you brand and position yourself will determine your success. The quality of your product or service alone will not make you successful. The cool colors, buttons, and features will not be enough to win if you are not properly positioned.

Many large companies continue to not understand this simple fact. Just recently, Dove launched a new men’s product. I have seen the commercials, and I absolutely love the product and want to try it. In fact, I want to try it bad. But I won’t. Dove has spent years branding themselves as a soft, sensitive, feminine product (after starting off gender-neutral). They recently had a massive campaign talking about the softness of their female product line. As much as I want their new men’s product, I refuse to use a man’s product that says “Dove” on it. If they had rebranded the product Lumberjack or Sleek, I would have been all over it. They were in love with their brand and thought that the male population would buy just because they recognize their brand. The men’s product line would have been successful had they rebranded the product. Here are a few examples of companies that did it right and others that have done it wrong:

Did it Wrong:
1. Mercedes – They own the luxury car market, but when they wanted to enter the lower end of the market, they marketed their low end product under the Mercedes brand and it cost them high end sales. If they had marketed their low end product under a different brand and they would have protected the integrity of their brand, and their revenue would not have taken a hit.

2. Hyundai – They did the exact opposite. They owned the low end of the market and wanted to play at the high end. Instead of rebranding, they released a model that competed with the BMW 7 series. Their commercials made a strong case for it to the point that if not for the symbol on the front of the car, you would have thought you were in a BMW 7 series based on room, performance, and features and at half the price. Just when you’re ready to buy, you stop and realize, “Wait, I’m not spending $70,000 on a Hyundai!” If they had launched that product under a unique brand that they owned, it would have been successful.

Did it Right:

1. GM – When they come out with a product in a different market category (high end, low cost, etc.), they rebrand. They did not put GM on the front of the Hummer. They knew to be successful, it required it’s own brand, and they reaped the financial harvest from it.

2. P&G – Proctor and Gamble owns many brands including Hugo Boss, Ivory, Pantene, Gillette, and Tide. P&G is one of the most recognized brands in the world, but can you imagine buying P&G laundry detergent as opposed to Tide? Yet P&G owns that brand and gets paid every time you buy.

Takeaway:

Don’t be in love with your brand. I know millions of dollars are spent on building brand, but if you are entering a different segment of the market, consider rebranding to not jeopardize the good name you have built in the current market segment. If you are the product, do not market yourself to all market segments. Choose one and focus all of your resources and efforts on owning that space. Trying to play in multiple markets as an individual will cause consumer confusion and reduce credibility.

Tags: Leadership

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Comment by Ren on May 16, 2010 at 12:52pm: This is really good...you are a master at branding!