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Mark Herbert
Mark Herbert
Mark is a Principal in the management consulting firm, New Paradigms LLC. His background includes over thirty years of combined C level executive and management consulting experience in high technology, financial services, custom publishing, and not for profits among other industries.
 

Would your company prefer being #2 instead of #1?

Jan. 19, 2012 1:41 pm
Categories: Uncategorized

Many corporate leaders aspire for their companies to become industry leaders. But there can only be one leader for each industry – or in marketing terms, there can only be one product, brand, or business that controls a category. Sure, there are exceptions, but more often than not, there is a big company who sets the standard – and others must follow.

There are countless reasons why companies would want to be known as industry leaders. Reasons range from setting industry prices to determining product specifications to clarifying standards for customer service. But in many industries, a large and powerful force has emerged as the #2 player who often keeps the industry leader on its toes in terms of new product development, pricing, and customer service – all in an attempt to chip away at the industry leader’s percentage of market share.

Here are some famous industry leaders followed by the #2 players in their industries:

* Coca-Cola vs. Pepsi (soft drinks)* Hertz vs. Avis (rental car agencies)* iOS vs. Android (operating systems)* Google vs. Bing (search engines)* Ford vs. Chevy (trucks)* McDonald’s vs. Burger King (fast food hamburgers)* Duracell vs. Energizer (batteries)* Home Depot vs. Lowe’s (home improvement warehouses)* Ritz-Carlton vs. Fairmont (five-star hotels)* Mozilla Firefox vs. Microsoft Internet Explorer (web browsers)

However, something interesting has happened with many #2 companies. Many #2 companies have used their #2 status as a selling point and competitive advantage. The fact that they are #2 or the little guy (think, David vs. Goliath) resonates with consumers, customers, and prospective customers. Consider Avis and its tagline: “We're #2 – We Try Harder.” Avis may not be the biggest car rental agency, but its ads and theme stick out. Consider the Energizer Bunny – who doesn’t think of the pink bunny when a wireless mouse or keyboard needs new batteries? And while the golden arches of McDonald’s appear on almost every corner around the world, Burger King’s constant advertising and emphasis on bigger and cheaper hamburgers have developed a large and dedicated following.

So the next time your leadership team asks, “Why can’t we be number one?” Explain that there are genuine advantages to being #2. One advantage to being #2 is the ability to create unique product specifications and/or packaging since no one expects you to be different.

Consider the recent uproar when Coke launched its main product in white cans versus classic red cans – there was such an outrage that the white cans were removed from store shelves within a month of their launch. Other advantages include the ability to tweak pricing, the ability to align or partner with totally unconventional companies or brands, and the ability to change packaging or advertising just to see how consumers react.

Without the responsibility of being the industry leader, you have more leeway to appeal to new customers. Depending on how creative your marketing initiatives are and how well they are implemented, you may develop a more brand loyal following than the leader in your industry.

GUEST POST BY DEBBIE LASKEY, MBADebbie Laskey has 15 years of marketing experience and an MBA Degree. She developed her marketing expertise while working in the high-tech industry, the Consumer Marketing Department at Disneyland Paris in France, the non-profit arena, and the insurance industry. Currently, Debbie is a brand marketing, social media, and employee engagement consultant to small businesses, start-ups, and non-profits. Recognized as a “Woman Making a Difference” by the Los Angeles Business Journal, Debbie has served as a judge for the Web Marketing Association’s annual web award competition since 2002. Follow Debbie on Twitter (http://www.twitter.com/DebbieLaskeyMBA) and on her Blog (http://debbielaskey.blogspot.com).

 
Dennis Hopwood
January 25, 2012 at 3:20 pm

Great post, Mark. Being #1 or the first to market can be highly over-rated. As the old saying goes, 'The pioneers get the arrows and the settlers get the land.' Dennis

 

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