The brand scape outside and online can give one the impression that only a handful of brands exist, with a few being the most prominent. Companies such as Tesco may have the largest market share, but they don’t own the market. The same applies for sports brands like Nike and Reebok. They have in their own rights accrued popularity over the decades resulting in brand familiarity and the larger market share, but sportswear is not exclusively theirs. No matter the industry, or how intimidating the competition is, there is always room for challenger brands and innovative products. These new players keep the marketplace dynamic.
So how do you compete with such opposition? The answer is simple; don’t compete. This school of thought stems from the Harvard model of Blue Ocean Strategy by W Chan Kim and Renée Mauborgnee. The idea centres on the concept of a red ocean, the over saturation and ‘bloody competition’ of increasing participants fighting over a shrinking customer pool of an overcrowded marketplace. The Blue Ocean Strategy focuses on innovation and differentiation from other brands, creating uncontested market spaces, while maintaining low costs with a focus on value innovation.
An example of a Blue Ocean business would be iTunes. By the late nineties, music was inadvertently moving towards digital with the flood of illegal file sharing platforms such as Napster and Limewire. While the major labels were clamping down on piracy through expensive litigation and the push of physical CDs, piracy increased to fuel music for the new technologies. In 2003, Apple came to an agreement with the five major record labels (BMG, EMI Group, Sony, Universal Music and Warner Brothers) and developed a legal platform for users to browse music and purchase individual songs.
Today iTunes has a library of over 37 million songs and movies, TV shows, books and podcasts. The download app has sold over 23 billion songs worldwide and accounts for over 60 per cent of digital music purchases. Another example of Blue Ocean application would be the erectile stimulant pill, Viagra. Created by Pfizer, Viagra was the beginning of lifestyle drugs. The new drug challenged the boundaries of the pharmaceutical industry of the time, which was function-led. In other terms, it’s the practical application of drugs for medical treatment. Viagra connected with people emotionally, by providing lifestyle enhancement, setting itself in a market place of its own.
By challenging the functional-emotional orientation of an industry, a brand can position itself in it’s own market and set a new standard. Emotional products can offer extras that add price without affecting functionality. Conversely, functional industries can give emotional values to existing products to stimulate demand. It is this example that has shown itself again through recent movements in the spirits industry. Spirits are often served straight, garnished with fresh fruit or mixed as part a cocktail. However, in recent years there has been an explosion of flavoured vodkas, combining the much loved spirit with hints of vanilla, toffee, strawberry and much more. In the US, flavoured vodka accounts for 22 per cent of the domestic market sales, with over 22 million cases consumed last year. In the UK, Diageo continues to take Smirnoff to the forefront with more flavours, with a British market that is valued at a conservative £116 million, with continuing to growth. Combining ingredients with an existing product opened up the market for Smirnoff. However, though it adopts a Blue Ocean ethos, flavoured vodkas remain within the red ocean, as despite being a completely different product, they would inevitably share the same consumer pool a.
The development of flavoured Bourbon and Kentucky whiskeys such as Jim Beam and Jack Daniels, is a whole different story. Throughout their lifetime, Kentucky and Tennessee Bourbon whiskeys have always been popularised by male archetypes and often patriarchal in nature. The spirit is often enjoyed straight or with ice and a mixer. Due to its naturally sour taste, men favour whiskey as a spirit as they generally have less taste receptors than women, who gravitate towards the more sweeter flavours. Though women’s taste buds are unique to the individual, an overall market observation shows whiskey as a male orientated drink because of the strong sour taste. However, recent additions include cherry, honey and cinnamon flavourings, all of which stimulate the sweet receptors, a perfect combination for appealing to women.
The flavoured whiskey market has created new demand with women loving the sweeter flavours. The vodka’s may not be an entirely blue ocean approach based upon the additional ingredients to an existing product, however it certainly embraces elements of blue ocean thinking but vodka has always been appealing to women and the demand has been there accordingly with staggering sales worldwide over the years.. The blue ocean strategy applies to the flavoured whiskies as not only has whiskey never been altered in this way before but it is attractive to women, it has opened a completely new market and love affair with the females of the species.
Recent campaigns from Jim Beam feature Family Guy voiceover artist and actress, Mila Kunis. In an interview with bar and nightclub consultant Jon Taffer from spike TV’s Bar Rescue, he complimented the introduction of flavoured whiskies and indicated that consumption amongst women has increased by 20 per cent. It is evident that the shift towards feminising a masculine product is both appealing and profitable. In an article published by the Wall Street Journal, premium vodka sales have stalled and as a product, vodka falls from our favoured taste pallet, while whiskey sales soar. In conclusion, never be deterred by obstructions or perceptions. Challenges are made to be defeated; it’s the principle of innovation. Businesses and markets, as with technologies, are made to evolve.
Time is testament to all the adversities that were overcame by the leading brands. All of the brands that we know and love today, were at one point challengers to previous market leaders. People are always looking for a new and genuine experience. Using Blue Ocean thinking, existing products can be given emotional value to establish new connections, and uncharted waters can be ventured with completely unique product lines. Whatever it is that you do, be what you like as long as you do one thing; do different.