Like an amoeba dividing in a petri dish, the market can be seen as an ever-expanding sea of categories. During my career as a management consultant at Deloitte, I experienced this Law of Division many times.
I joined Deloitte when the consulting profession, within the Big 4 (Big 8 at the time) Accounting and Consulting firms, was in its formulation stage. At that time, the consulting business was a single entity.
Over time, we divided into Consulting Services, Implementation Services, and Quality Review Services. These various categories of services are further divided into strategy, operations, organization and technology specialties. These categories were further divided based on industry specialties such as telecommunications, technology, financial services, healthcare, consumer goods, etc.
Another division occurred according to geography in terms of Emerging Markets and Industrialized Regions; and then there was another layer of specialty in terms of the Americas, EMEA (Europe, Middle East, and Americas) as well as APAC (Asia Pacific Countries) regions.
While sometimes these layers of granularity and focus were done for internal purposes, more often than not it was the market that valued the experience according to these categories. At every step of the way, we were faced with new competitors and had to learn to adapt to these new entrants to the consulting business.
Like the consulting business, the automotive industry started out as a single category. Three brands (Chevrolet, Ford and Plymouth) dominated the market. So the category was split and today we have luxury cars, moderately priced cars, and economy cars. We also have full size, intermediate and compact cars. And we have sports cars, four-wheel drives, RVs, SUVs, and minivans; another example of the ever-expanding sea of categories.
In the television industry, ABC, CBS and NBC once accounted for 90 percent of the audience. We now have network TV, independent, cable, pay, and public with intranet, interactive, and even IPTV (niche-oriented programming that is broadcast over the Internet)… have you ever watched CNBC online? This programming is available both on my cable TV network and on my PC or laptop (free of charge).
The beer started the same way. Today we have imported and national beer; premium and popularly priced beers; light, draft and dry beers; we even have non-alcoholic beer.
Each segment is a separate and distinct entity. Each segment has its own reason for being. And each segment has its own leader, who is rarely the same as the original category leader.
In the world of computing, IBM is a leader in mainframes; HP in mid-range computers; Dell and Apple on laptops; and Sun, now part of Oracle, has been the leader in workstations.
Instead of understanding this concept of division, many corporate leaders have the naive belief that categories combine. Synergy and its cousin, the corporate alliance, are the buzzwords in boardrooms around the globe.
We saw AOL and Time Warner combine to take advantage of the convergence of television, music, publishing, and computing. How did that work out?
The benefits of synergy and mega mergers are rarely realized. Categories are divided, not combined, into a sea of niche categories (and this is well described by Chris Anderson in his book The Long Tail: Why the Future of Business is to Sell Less of More).
The rich are in the niches.
The way the leader can maintain its dominance is to tackle each emerging category with a different brand, as General Motors did with Chevrolet, Pontiac, Oldsmobile and Cadillac.
What prevents leaders from launching a different brand to cover a new category is the fear of what will happen to their existing brands. General Motors was slow to react to the super premium category established by Mercedes-Benz and BMW. One reason was that a new brand other than Cadillac would infuriate GM’s Cadillac dealers.
Contrast this with an operating principle from Andy Grove, former CEO and chairman of the board of Intel, the world’s largest semiconductor chipmaker and one of the world’s most admired companies, where “only the paranoid survive.” Essentially, this principle led Intel into survival and leadership cycles based on the ability to cannibalize themselves and jump across the chasm into the next product area. They were continually dividing successful product areas into new categories generating wildly successful and profitable new markets and avoiding joining others at the bottom of the high-tech abyss.
As an Internet marketing professional, you need to understand the Law of Division. As a product category splits, there are leadership opportunities to rush and become #1 in one or more of the new categories.
Timing is important too, but you must have the courage or money to hold out long enough for the category to develop.
It is better to be early than late. You can’t get into the prospect’s mind first (as described in Law No. 1 of Leadership) for a category unless you’re prepared to spend some time waiting for things to unfold.
Many internet marketing entrepreneurs use techniques and tools like Mind Mapping, Keyword Research, Pull Marketing Formula, Magnetic Sponsoring, and MindMeister to conduct market research and plan a successful marketing campaign. They then use the marketing power of MyStory, the You Inc brand, and hypnotic writing skills in their marketing campaigns to realistically address their brand’s position and the strategy they want to pursue in the world that includes the Law of Dividing. .
The goal is not to emphasize why your offering is better, in terms of features and functionality, than a competitor’s, but rather to develop a message that is recognized, accepted, and agreed upon that will seduce and persuade a customer, in the new category, that what is being offered to the target market is real and will work for them.
Marketing is not a battle of products. It’s all about the strategy you use to benefit from the Law of Divide and if you’re not the leader you should monitor the market and as a category divides be prepared to rush to be number 1 in one or more of them. the new ones. categories.
You can learn more about internet marketing and home-based businesses by reading the updates that will be posted on my blog over the next few weeks.
Finally, a great book to read is “The 22 Immutable Laws of Marketing” by Ries & Trout. It is the source of some of the material provided in this article.
