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Market Knowledge Always Wins The Day - Articles Surfing

If you rate how good a company's marketing initiatives are by the advertisements you see and the impressions they make on individuals, you couldn't be more wrong. The best marketers know their market ' they have in depth knowledge of who their customers are, what their customers' needs are, what companies have done in the past, and in which direction the market is headed. Sure, these guys can also generate catchy ads and funny slogans, but these things do not make them great marketers.

The Best Battles of the Past Few Decades

Nike vs. Adidas ' The battle between Nike and Adidas that erupted in the late 70's and continued through the 80's is one for the record books. In the mid-80's, Nike signed basketball superstar Michael Jordan and quickly released the Air Jordan line. Adidas signed Run DMC banking on the explosion of Hip-Hop. Who won? Well, they both sell sports shoes and Adidas signed a musical group while Nike signed a sports star. Today, Nike is worth $15 billion and Adidas is worth $8 billion. Nike dominates most sports while Adidas remains strong only in soccer.

Why did this happen? There are a few reasons. Nike stayed true to its positioning by signing basketball's most popular rising star. Adidas strayed from the sports theme completely by signing a Hip-Hop group. Nike also had the foresight that basketball was becoming an American pastime where players like Michael Jordan would be idolized. They were dead on.

JVC vs. Sony ' Another struggle during the 80's was between VHS and Betamax. People always say that marketing had nothing to do with VHS trumping Betamax as the video cassette standard. However, marketing had everything to do with it. RCA went to Sony and asked them to create a Betamax tape capable of recording for 4 hours. Sony refused because the quality would be much poorer than what Betamax was now offering on the 1 hour tapes. RCA then went to JVC and asked them the same thing. They accepted, began to create the 'long play' VHS tapes, and the industry was instantly changed.

What consumers needed was a tape capable of recording more than an hour. People were beginning to use the recording tapes to make copies of their favorite movies on television. They could not use the Betamax tapes because all the movies were longer than an hour. JVC saw the consumer need and satisfied it. Because JVC was the one with the market savvy to see this, they came out on top and Betamax flopped.

Microsoft vs. Apple ' Apple created its first computer in 1977 and quickly gained notoriety. Microsoft became popular in 1981 when its operating system was bundled with IBM computers. So how did Microsoft 'beat' Apple in the computer industry when they were almost 5 years behind them?

Microsoft had the market knowledge and worked through existing channels to reach their customers. Apple thought that their market would like an 'all-in-one' package with the company designing, building, and populating the computer so that it would be very efficient. Microsoft, on the other hand, realized it could never satisfy the market entirely and focused on creating the operating system for IBM computers, a large manufacturer who was already established in the computer industry. While Microsoft and Apple weren't doing the same thing, they were definitely in the same market in the early 80's. Apple, whose operating system on its early models was only compatible with its Macintosh computers, lost the battle when they licensed some of their operating system ideas to Microsoft. They turned around, created their own Windows 1.0, and bundled the operating system with all the IBM computers.

Apple was stuck marketing and selling their products which were not compatible with any other product out there. Microsoft took off immediately after they realized the best way to reach their market: a partnership with a well established computer manufacturer.

Harley-Davidson vs. Honda ' Harley-Davidson was the world's leading motorcycle manufacturer until the 1970's when Japanese bikes quickly became popular with their superior handling and performance. In 1980, Harley was at risk of going bankrupt and was sold to another company who had a revolutionary marketing idea.

The new owners saw their competition, Honda and the other Japanese bike manufacturers, sized them up, and developed a new strategy. They saw that they had lost the innovation and performance lead to the Japanese and would never regain it. However, Harley-Davidson was a company that had a great history 'almost six decades more than Honda.

Harley-Davidson's new designs had a 'retro' feel to them. The new bikes looked like the old bikes of the 40's and 50's and shied away form the sleek and compact look the Japanese were using. They saw that an American company with a lot of history could use that history to its advantage. The name Harley-Davidson quickly became synonymous with American pride. By the mid-90's the company had completely rebounded and started making deals with Ford to produce a Harley-Davidson model of the popular Ford pickup trucks. Again, the Harley-Davidson name prevailed. By 2004, the licensing of the Harley-Davidson name was bringing in 5% of the company's revenue.

Harley-Davidson could have been crushed by Honda and the other Japanese bike manufacturers ' look at what has happened to the American car manufacturers as of late. However, Harley has prevailed by keeping a consistent image with their bikes. They have never wavered from that 'Hog' mentality the company pushed for so hard in the 80's. They not only sold their bikes, but they also sold the history and prestige that was behind each one. And that's exactly how they positioned the bikes in the 80's to stay afloat against stiff competition.

Submitted by:

Heather Loftiss

Heather Loftiss is President of Water Design Studio (http://www.waterdesignstudio.com), a Houston based advertising agency. She also publishes The Customer Connection (http://www.morerepeatsales.com) online newsletter.



Copyright © 1995 - Photius Coutsoukis (All Rights Reserved).


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