How are latecomer brands able to succeed
Q: WE’RE TWO close friends and college classmates in business who will be graduating soon. We’ve decided to be entrepreneurs instead of applying for employment with recruiting companies like Unilever, Nestle, BDO and others. As part of our preparation, the two of us have been studying latecomer brands which have succeeded or seemed to have succeeded in threatening to overtake their dominant market leader competitor brands.
Two successful latecomer brands in particular have fascinated us. These are San Marino Corned Tuna and Fern C. Between the two of us, we divided the task of learning how each of these two succeeded in becoming threatening challenger brands. Each of us asked around, visited each company’s website, read annual reports, talked to sales reps and merchandisers of each brand, and so on. We got answers of course. They were all different and attributed the source of success to obvious “causes” like “it’s new,” “it’s really different from the leading brand,” and such similar things.
We both were looking for an explanation and not just a labeling of the source of success. We asked, for example, “what exactly is new in San Marino that made it successful?” We got the same answers typified by this one: It’s obvious, isn’t it? That’s corned tuna. Not just tuna.
When we asked how exactly Fern C is different to make it succeed, we got a similar answer that brought us back to the brand name’s pharmaceutical name, sodium ascorbate.
Will you help us with a better answer? By “better,” we mean something that can guide us in planning our market entry strategy as a latecomer brand.
A: You’re in luck because the senior MRx-er just spoke last month in a conference on product innovation where he took up the case of San Marino Corned Tuna to demonstrate the power of product innovation for business growing.
So to directly answer your question, we believe that both San Marino Tuna and Fern C can trace their success from being an innovating latecomer brand. This is of course what you correctly termed as the “label” of the source of success. And labels do not explain. Here’s the explanation.
We take up first the case of San Marino Corned Tuna. Here the dominant market leader brand is Century Tuna. The product category is the canned tuna fish category. In coming out with a product innovation branded as San Marino Corned Tuna, its manufacturer, CDO, effectively created a new class or standard of canned tuna. Canned tuna became partitioned into 2 categories, namely, the regular canned tuna where Century Tuna belonged, and the corned canned tuna that CDO created for San Marino.
This new category standard-setting product innovation would not have succeeded if the new category did not have a tuna eating consumer segment that had an unserved or under served need for corned tuna. So was there such a market segment and who are the tuna eating consumers that made up this segment?
The unserved or under served segment consisted of fish eaters who were former beef eaters. These consumers can no longer eat beef or would not like to, because of feared cardiac health risk. But what they missed most in eating fish is the taste of corned beef. In learning or imagining about this, Corazon D. Ong, CDO owner and inventor, thought of the corned tuna concept. She developed the product and product tested it, and then launched it. The unserved and under served fish eating consumers were all but more than ready for the launch.
Fern C case
An analogous story applies to the case of Fern C. In conceptualizing Fern C as a Vitamin C, its developer thought of how it could redefine Vitamin C so that the redefined product creates a new Vitamin C category because it will set a new standard or class for the category.
It found the embodiment of this insight in a Vitamin C that is not acidic but alkalinic. Both had the same health benefits, namely, protection from cough and cold, etc. But the alkaline-based Vitamin C did not have the product disadvantage of the acidic Vitamin C. It was stomach friendly while the acidic Vitamin C was markedly stomach unfriendly.
But was there a Vitamin C taking consumer segment whose Vitamin C values gave a priority to a stomach friendly Vitamin C? As it turned out, there was such a large unserved market segment in search of a Fern C.
So there’s your guide as an innovating latecomer brand in successfully threatening to overtake the category’s dominant leader brand.
Guide to latecomers
1st. Search for a product innovation that would clearly differentiate your product from the current dominant category brand to the extent of redefining the category into two because it sets a new standard or class in the category.
2nd. Check and make sure that your innovative product has a big enough market segment with an unserved or under served need for what’s new in your product.
Keep your questions coming. Send them to us at MarketingRx@pldtDSL.net or text us at 0919-3145412. God bless!
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