Here's a story for you . . .
I was recently hired to help a well-known Internet company quickly grow its idea to survey general web users. The concept relies heavily on the principles of marketing strategy and research. The development team, I soon found out, had not a single member with such relevant experience. In fact, the team thought that marketing expertise was irrelevant. What mattered most to them was getting the service to market fast.
My client, like so many other capable companies, was racing to get to market first. But they were doing so at the expense of establishing a defensible, creative and flexible long-term market strategy. This is the problem with trying to hit the market too fast - not having thought through a marketing plan that is robust.
FIRST IS BEST IS A MYTH
When it comes to being first on the market recent research shows that the pioneer advantage may just be a myth. Instead, it's long-term market leadership that may better generate brand recognition and profit. Being a market leader, it turns out, often means taking the time to develop a plan - even if it means being second out there with the product.
Here are some examples of this to consider. Let's start with Amazon.com. Arguably, they were the first to develop the idea of selling books on the net. Truly, this was a creative idea that merited the need to get to market first. However, what is also needed is consideration of the fact that once you get there how do you stay there? That is, you know that the "me-too followers" are going to come along: Borders, Barnes & Noble, Books-A-Million & many others. They all did, so the age-old marketing question remains how can you differentiate yourself from the other competitors so that you can keep your distinguished and profitable place in the market?
STRATEGY TAKES TIME - IT'S EXECUTION THAT'S FAST
The answer here is not simple and requires an in-depth analysis of the market situation, something that cannot be done in a matter of minutes. Hence, the dot.com philosophy of doing things quickly falls down in the face of the need for the development of creative marketing strategy to counteract the forceful effects of competition.
In the world of the tortoise, market leadership comes to the forefront, however the e-commerce hares still embrace the notion of pioneership (and the speed required to be the pioneer). Of course, we all know who won the race!
SIZE MATTERS, BUT ONLY IN HORROR FILMS!
Consider a popular MBA case discussion that revolves around People Express
Airlines. Donald Burr founded the company on the idea that he would serve smaller markets on the East Coast, thereby avoiding competition with the major airlines. However, as his idea began to work well, he could not resist growing the airline, eventually going head-to-head with the industry's biggest players. In the end, the company went bankrupt.
Many dot-coms of today have not learned from People Express.
Consider Priceline.com. The company's core idea is giving the consumer the ability to name his or her own price for airline tickets. The idea is wonderfully creative, and certainly differentiates the firm from other travel companies. But what did Jay Walker, Priceline's CEO, do once his position was established? He did the same thing Donald Burr did -- expanded like crazy!
Priceline gave customers the option to name their own price for mortgages, hotels, groceries and gas. Before long, the firm's image became blurred, and they went head-to-head with competitors in industries where the name-your-price model didn't work. Today, Priceline's profitability and stock price have suffered, do doubt thanks in part to this misfired strategy.
WHAT CAN YOUR LEARN?
I advise you to consider three issues as they relate to marketing strategy. First, don't expand beyond your means. Consider your image and how expansion could compromise it. Second, from the customer's perspective, market leadership may be just as important as market pioneership. But market leadership takes time and money, and cannot be achieved in the blink of an eye. Finally, marry your marketing strategy with your technology; don't let the technology push the marketing. In other words, the Internet requires technology to be sure, but don't let the technology enthusiasts (or web designers, or infrastructure people) get in the way of a sound and robust marketing strategy.
Remember the tortoise. If you move too quickly, you'll lose the race.
