• How to develop a strong and lasting brand by narrowing down its categories.


    Today you will find a cafe in any small town in UK. In fact, in larger cities and towns, you may find cafes in almost every other block.

     

    So what is available for you in a cafe? Everything! Breakfast, lunch, dinner, sandwiches, hamburgers, pies, pen cakes, muffins, hot dogs, ice creams, and of course, coffee.

     

    What Howard Schultz did when he entered this industry? He came up with a cafe that specialized from all of the above categories, in just selling 'coffee'. In other words, he actually narrowed down the focus of cafe. Today Howard's brainchild, Starbucs, is one of the fastest growing chains that make hundreds of millions of pounds worth of sales annually.

     

    Similarly, every small town of UK or USA has a delicatessen, that sells everything ranging from hot and cold sandwiches, soups, salads, three types of roast, beef, three types of ham, three types of pickles, six types of bagels, four types of bread, hard rolls, soft rolls, hero rolls, pretzels, corn chips, potato chips, huge variation in cheese. It further offers muffins, cookies, doughnuts, cakes, candy bars, frozen yogurt, ice cream, coffee, tea, beers, soda, water, soft drink of all varieties and of course, the newspapers, lottery tickets, cigarettes, etc. Every decent delicatessen prides itself in offering everything.


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    But again, what Fred DeLuca did as he entered the same market? He narrowed down the category to just one type of sandwich, i.e., the submarine sandwich and called his chain Subway, a great name for a store that just sells submarine sandwiches.

     

    Great things happen when you actually narrow down your brand rather than to expand it. The other edge you get in narrowing down your brand is concerned with the operational side of it. When all you make are submarine sandwiches, you become an expert in making them.

     

    The moment you decide to dominate a category, you become immensely powerful. Microsoft own 95 percent of the world's market for personal computer operating systems. Intel owns 80 percents of the world's market for processors. Coca Cola owns 70 percent of the world's market for cola and they have all dominated their category by narrowing down their brand's focus.

     

    Why then most of the marketers still want to expand their brand? Because strategy makers are led astray by the big and successful market players. The assume that the reason why such companies are successful is because they are expanding (Costa, for example, currently is busy entering into everything ranging from tea, ice cream to bottled drink)


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    But let's looks at you for a minute. Let's assume you want to get rich. Now ask yourself: Can I become rich and affluent by doing what rich people do? They purchase expensive houses and dine in expensive restaurants. They drive Rolls Royces and wear Gucci for example.

     

    Would purchasing an expensive house, driving a Rolls Royce and wearing Gucci make you well off? It's rather contrary. You are more likely to turn poor, in fact bankrupt.

     

    Now let's look at the big companies? They buy private jets. They run programs such as empowerment, leadership training, total quality management, etc and of course they also extend their brands. Would buying a private jet for £25 million makes ones company successful? Highly unlikely! Would extending your brand? Just as unlikely.

     

    If you want to be well off, you need to do what rich people did before they got rich. Similarly if you want to turn your company into a big and successful company, you need to do what exactly the big and successful companies did before they became successful. And what they all did was the same, they narrowed down their brand offerings or categories


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    When Domino's first came into being, it sold pizza and submarine sandwiches, When Papa John's first entered into the market, it started off with selling pizza, submarine sandwiches, cheese steak sandwiches, fried mushroom, fried zucchini salads and onion rings. Now how do you think Tom Managhan and John Schnatter built Domino's and Papa John's into big and powerful brand? By expanding their menus down the road or contracting them?

     

    Great things happen when you narrow your offering or category.

     

    Faraz Saeed, MBA, MSc

 
 
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