Escaping the Middle market Trap: Lesson you can from Electrolux, and more.

“When I am asked for guidance on marketing problem, I usually respond that I know a method that is guaranteed to work: find an organization that has successfully addressed a similar problem and adopt what they did. Don’t limit the search to those organizations that look like yours; look across industries’’ ....Professor David Aaker, Brand consultant/Vice Chairman at Prophet.

As Trond Riiber has noted [an interview with CEO of Electrolux, Mckinsey quarterly, December, 2006, page 72], in 2002, Electrolux was facing a rapidly polarizing appliance market. At one end, low-cost Asian companies such as Haier, LG and Samsung were applying downward price pressure. At the other end, premium competitors such as Bosch, Sub-zero and Viking were continued to grow at the expense of the middle-of-the-road brands. Electrolux new CEO Hans Straberg who took over the reins decided to rethink Electrolux customers’ wants and needs. Rather than accepting the stratification between low and high, Straberg  segmented the market according to the lifestyle and purchasing patterns of about 20 different types of consumers – unveiling 20 product positions. Electrolux then started marketing its steam ovens to health-oriented consumers and its compact dishwashers developed for smaller kitchen to broader consumer segment interested in washing dishes more often. 

To companies finding themselves in mature market,  John Iduh offers these words of advice:

1.    Start with your customers and understand what their latent needs are and what problem they are experiencing. Then put the puzzle together to discover what they really want to have – figure out what they really want though some might not express it.

2.  Leverage the current market trend to identify unoccupied market space where competition is not visible, weak at best or irrelevant.

3.    Adjust your organization to accept and commit and support the development of new CUSTOMER VALUE that will break away at the marketplace. Then consider what the target market will see as “must-have” that will define or create a new value category.

4.    Get a chief: a CMO, COO, CEO or any corporate executive that will play a role of value champion or visionary and capable of supporting the strategies going forward.

5.    Find your VALUE DNA. Your customer value DNA is its truth and relevance and what will define and differentiate the value from competitors’ offerings and it will be the single most important weapon your value will ever have to battle for increase awareness, market share and profitability. Take a calculated risk to ensure that the value rises above competition.

6.    Target wining mindsets. The wining mindset is the potent aspiration view shared view of needs among all the core market segments. It becomes the filter through which all the marketing message will flow.

7.    Define your value and its market category. To make the value relevant to customers and breakaway, it needs not only stand apart from competition but also transcend categories and open a defining gap between itself and what competition will offer. Then it becomes a category exemplar of one.

8.    Identify the customer purchase drivers or the consideration sets customers use to make purchase choices and the logics and motivations behind their purchases.

9.    Match the purchase drivers with the existing market trends, category trends or existing culture in the industry landscape. Then accelerate innovation that will rise above me-too initiatives crowding the marketplace. Invest wisely as if your business depends on it.

1.  Demand a great marketing campaign that will break out-of-the-box; promote the value category rather than the products the customer value is supporting. When the value wins, the product will also win. It means that your brand is the only one offering such relevance. Don’t stand still, execute flawlessly. Frame competitors negatively: tell customers that your competitors are pursuing the old ways. Then create barrier to keep competition off the game. Trademark the value. Build large customer base. Create club membership. Use social media going viral because the value needs to be talked about. And because change and trends will emerge making the category dynamic, provide a moving target with flexible-adaptable strategies going forward.