Do you want your brand to be #1? Well, that all depends on who you are talking to at that particular time but most people would tell you...YES. In certain areas of business, you probably want to aim a bit lower for the long-run and let me explain why...
In today's Wall Street Journal, Gina Chon has a lead article on page B1 of the Marketplace section about Toyota's Scion sales strategy. In 2006, the Scion (hip, trendy car from Toyota) is going to surpass its goal of 150,000 units sold by 25,000 additional vehicles. This means that there is obviously more demand for the Scion than expected. Knowing their target audience well (hipster, urban, laid back, young, etc), Scion realizes that if they increase the production of the automobiles and make them readily available for everyone to purchase, they will flood the market and dilute the Scion brand.
When you drive around on the street, do you notice how many Toyota Camry's and Honda Civic's there are? Probably... they are everywhere. For hipsters and the audience of the Scion, this is opposite to what they want. It's about unique identity, not mass market. With that said, Scion will earmark production for next year at the same level - 150,000 Scions... to keep the brand valued by hipsters.
One case I use when giving speeches is about the NYC club scene. You do not want to be the absolute hottest club for a summer even though the monetary rewards may be fantastic for that period of time. The next summer, there will be another club that is hotter than you because influencer's and hipsters always need to find something new and not do what has happened in the past. The club who did well the previous summer will have a tough time surviving the next year and will certainly see lower overall revenues (if the business remains exactly the same).
Lets take this case online... we've got a lot of buzz around Facebook, YouTube, MySpace, Friendster, etc. An acquisition of any of these sites are risky as they were built around buzz - and the crowds who are a large part of the recurring audience is always looking for the latest and hottest fad AND/OR trend. Once these sites get too much media attention and the mainstream mass come to use them, you'll see an eventual decline in usage from the hipsters and trend-setters which will then take mainstream traffic away when something else gets hotter.
Would love to hear thoughts on the above....
Comments