In the realm of marketing luxury real estate, we have noticed some patterns of vulnerabilities among market leaders that represent opportunities for challengers. If they do have a chink in their armor it usually comes down to this: 1) they lose their focus; 2) they get complacent, or; 3) they lag behind technologically.
If you want to overtake the incumbent market leader, rather than identifying an uncontested market niche that you can dominate, you need to assess your opponent’s weakest link and wage an all-out battle that is 100% concentrated on one of these specific vulnerabilities.
In this post we look at the vulnerability of losing focus. Maintaining focus over time is one of the true tests of a market leader.
When you are a market leader in a specific category or niche within your marketplace there is always a temptation to lose your focus by diversifying or changing your singular winning formula because you have attracted an abundance of diverse opportunities. If you are the best prime rib restaurant in town, is it not logical that you could also become known as the best seafood restaurant? After all, the fundamentals of the restaurant business are the same regardless of what you serve.
There is a seafood restaurant in Los Angeles that was, year after year, one the highest grossing restaurants in town because of its moderately priced menu, its ideal setting and a bar business that was unstoppable. It appealed equally to families, tourists and young adults. We recently visited the restaurant after over a decade of no longer living in the city, expecting to find the same menu. Instead, they reinvented themselves as an expensive dinner house. They may have needed to refresh their brand, but they completely lost their focus on the core attributes that made them successful for decades. This restaurant is potentially vulnerable to competitors who could reintroduce the prior winning formula under a new brand.
To be successful today, you have to narrow your focus in order to build a position in the prospect's mind. Then you have to stay focused to sustain your market leadership position. A company that has resisted the temptation to diversify and has maintained its focus on its primary winning formula is Gerber.
Just take a walk down the baby food aisle in any supermarket in the USA (and dozens of countries around the world). Gerber dominates this food category and the shelf space as well. The company is owned by Nestlé, the largest food (and nutrition) company in the world, founded and headquartered in Switzerland. Gerber enjoys roughly 80% of the market share. Beech-Nut, a very distant #2, is also Swiss owned by the Hero Group, who makes fine jellies and jams in addition to baby food. With no substantial challenger, only Gerber and Beech-Nut currently have double-digit market shares.
How focused are you in your market place? In our next post we will cover the other two vulnerabilities of incumbent market leaders: Being complacent and being “tech-challenged”.
In our luxury real estate marketing consulting practice we work exclusively with incumbent market leaders or their challengers. We do not work with direct competitors within the same marketplace. Our ideal clients are those who realize just how much is at stake in terms of market share and revenue at this level, when you achieve top-of-mind status. If you have the heart of a champion and are keen on “the unabashed pursuit of market leadership”, give us a call for a complimentary consultation! 805.684.8180
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