Category Archives: Competitive Intelligence

BrandingWire Case Study: Opinions by the Dozen

As promised, here’s the initiation of a monthly series of blogs based on case studies that twelve of us – a posse of pundits – will be addressing through the vehicle called BrandingWire. Our first “problem” was contributed by Steve Woodruff at Sticky Figure. Here’s the company profile he’s presented us:

“Growing A Company from the Coffee Grounds Up”
“A small coffee company in America’s heartland has been in business for 8 years and is ready for real growth. To date, they are moderately successful, profitable, and carry no debt. They roast their own beans on-site and their retail sites are relaxed, and kind-of country-funky. The locals love them but no one outside the region knows they exist.

This is a family business and the owner is committed to doing whatever it takes to create a thriving business. Before they do, however, they have a few “challenges”. Their brand name may be inadequate to go national, their tagline, “Great coffee at great prices!” sucks, and they have no marketing/branding pieces that can carry their growth. Finally, their logo looks like a five-year old drew it. On the upside, they have lots of roasting capability and their coffee sources can deliver all the beans they will need. They also have money to invest in growth, without placing any burden on their operations.”
You can read my ruminations and recommendations below, and the other eleven perspectives by accessing BrandingWire. But since you’re here, please read mine first.:o)

My Concept of Branding

First I should define what I believe branding is. Before the more traditional tasks such as naming a company or creating a logo, branding is a strategic activity that defines the very business to be created. It involves assessing the market, paying attention to trends and positioning the company in relation to competitors. It is the junction where customer desire and company strengths cross. I call it the brand platform.

So I suggest exploring the very nature of the business.

At present, the owners of this company are deeply committed to competing in the “coffee shop” category head-to-head with Starbucks, the semi-successful Peabody Coffee and a few other “me-too” coffee shop chains and local imitators. If as stated, the owners are “committed to do whatever it takes to create a thriving business”, I’d ask them to think more broadly.

I’d want to explore creating a new product category in which there is no significant, organized competition. This is a matter of combining the coffee-making component with another, equally attractive service business opportunity.

How to Create a New Product Category

How would I go about that? First I would study trends. And I would study Starbucks and try to find those areas in which they are not strong.  I’d look at activities in which coffee drinking could be an accompaniment, much as beer is hooked to bowling. I’d then associate with those types of establishments and sell my brew from under their roofs or in co-owned facilities. This is being done in at least one market, bookselling.

Here’s an example of one direction I’d explore based upon my own, very narrow experience in Starbucks, and knowing about one significant trend in American life. I’d want to walk through the financials before exploring it much further than I have here.

Here’s the premise:

There are few places where small groups can meet regularly except in the back rooms of a handful of restaurants where participants are required to eat a meal. And those groups, either business or social, are becoming more popular what with the trend toward social networking. So I’d provide a place where leads groups, master-mind groups, MLM groups, sales networks, plus non-business groups like mother’s morning break groups, retired social groups and charity organizers could meet regularly for a room fee and the cost of refreshments.

I’d have up to five semi-private areas of different sizes, each of which equipped with conference table, whiteboards, sideboard for refreshments and coffee. These “pods” would offer some privacy. Plus the meetings would no longer dominate the entire seating area as they do when groups “invade” a Starbucks. There would also be a “public area” for one and two people seating, and a take-out function as well.

But instead of being known as a coffee house, I’d create a new category: meeting place. I’d call it something like “Rendezvous”

I’d serve great coffee and variations, but the thrust is a place to gather and to come back regularly to meet, even though you could meet with a friend there anytime, and occasionally just drop in for a cup.

The networking propensity of group members will provide word to spread about this meeting place so that when some one asks, “where can I gather with my cohorts?”, Rendezvous comes to mind.

Think Outside Your Existing Category

So, by thinking outside the traditional product category, by creating your own category in which you are the first to reside, by designing the business around a particular type of customer, by targeting niche activists, by combining business concepts, these coffee folks can compete effectively without competing directly with the Starbucks machine.

If the new model has legs, then I’d build a brand platform upon which the traditional branding elements can be created and integrated into a differentiated new business that just happens to sell great coffee.

Now go visit the BrandingWire and read what the other eleven members of the pundit posse have to say about growing coffee shops. (Their individual blogs can also be reached from the “Posse of Pundits” blogroll in the right column.

Martin Jelsema


Back to Basics – 3

Step 3 has to do with positioning.
Positioning was first presented by Al Reis and Jack Trout in their 1981 book, Positioning: The Battlefield for Your Mind (I own a first edition).
The main idea is that the marketplace actually positions (ranks and/or stereotypes) a brand within the collective mind.

Now most marketers believe they are responsible for positioning their offering – product or service – in the marketplace by practicing certain strategies and tactics, particularly through setting price and creating compelling messages.

Well, the truth is they do influence what market members think. But the key consideration here is the market perceives the product in their own context and through their own experiences, some not even related to the product itself. This includes experiences with competitive products and products in adjacent categories, their histories with similar products over time, and their social backgrounds among other factors.

A provider can certainly influence and persuade people that their product ought to occupy a certain position (number one, the first, the least expensive, the most responsive, etc.). However, if a competitor is already making – and backing up – that claim, you’ll most likely never dislodge the competitor from the position you’d like.
It’s therefore vitally important that you find a positive, unoccupied position in which to compete. That means research.
The first thing to determine through research is what attributes are really important to your prospects. That is, what motivates them to buy. Then you need to find out how your prospects now position your competition within the product category. Once you know those two pieces of intelligence you can begin looking for an unoccupied position with favorable attributes.

To read more about positioning and see how the research process works, I’ve a section about positioning on my Signature Strategies website. Just click Positioning to review that process.

Anyway, based on the research, whether a formal study or a “seat-of-the-pants” analysis, you begin to identify unoccupied positions with potential appeal and velocity.

Now you are ready to develop a product/service tailored to that position, and to begin the alignment of marketing factors to support the position.
As an example, let’s say you sold replacement windows, and you determined that the market and the category had a gap in the high-end remodeling market. Here, your customers are the contractors, not the ultimate consumer. You would then provide the essential help a contractor would need to design in your windows. You would want to establish a reputation for being there when the contractor wanted you on the job site. You’d also provide the contractor with marketing aids to help him/her convince the home-owner that both the contractor and the window were of good value and prestige.
In other words, you would plan to do what is necessary to make that position yours. But you must always remember it’s the market that does the positioning. All you can do is anticipate, participate and validate the market.
Now we’re ready to begin building our brand platform
More on that in Step 4.

Back to Basics – 2

The previous entry in this series addressed defining target markets as the first step of “Branding Smart from the Start”.
Step 2, competitive evaluation, is also a foundation activity upon which a successful brand can be built.
Here we are identifying and evaluating your anticipated competition.
Now, I’ve been told by at least a dozen entrepreneurs that “They don’t have any competitors”. I say poppycock! I say that’s a cop-out.
And I’m not speaking about the old saw that says you’re competing for a piece of market members’ limited resources. No, I suggest that your competition is probably the product, method or system market members are using today in order to cope with the need or desire your offering promises to address. So the horse and buggy competed with automobiles in the pioneering days of the auto. Bookkeepers compete with Quick Books. Faxes compete with e-mail. Fresh vegetables compete against packaged salads.
Yours may be a more speedy, cheaper, thorough and elegant solution to a problem. But because people in general are reluctant to change – they get comfortable with the way things are – the old ways need to be addressed and acknowledged as you develop your branding strategy.
No one has addressed this need better than Geoffrey A. Moore in his ground-breaking book, Crossing the Chasm. On page 154 of the soft-cover edition he presents a formula for a positioning statement, or elevator speech, to introduce a product that is going to replace a traditional product.

For (target customers)…
Who are dissatisfied with (current market alternative)…
Our produce/service is a (new product category)…
That provides (key benefit/solution)…
Unlike (product alternative)…
We have assembled (key features addressing the application).

For new products in which you are inventing a new product category (as I advised a new dry cleaner who offered all type of clothing care products to do by introducing the company as a “Clothing Care Center” rather than a “dry cleaner”.) and for products entering an established category, identify each major and each up-and-coming competitor and perform a SWOT (strength, weakness, opportunity, threat) analysis.
This will allow you to position each competitor against the attributes important within the product category. I suggest you go to my web site and review the positioning research example I’ve presented there concerning the restaurant business in a hypothetical small town in southern Colorado. Click Positioning Research Example.
You may not need to actually poll people about the competition if you have other sources of market intelligence. The idea is to at least roughly place competitors in the “pecking order” for each important attribute. Now you’ve established a map of your playing field, and can better see where your offering will fit within it.
Next time it’s on to Step 3 in the next blog when I’ll address the need for “classic” positioning.