Published in Philippine Daily Inquirer, September 19, 2003
Next to Al Ries and Jack Troutâ€™s concept of positioning, which helped raised the level of marketing to a science, came the much-debated concept of Focus by the same marketing gurus.
While marketing strategists accepted the concept of focus with positive fervor, it was nonetheless difficult to implement. With a few exceptions, chief marketing officers found it next to impossible to convince their CEOs, to concentrate their resources on a single or limited market segment as well as develop a single-minded positioning or a brand identity statement. Never mind, if focusing meant establishing a reputation and strong market presence.
Case for entropy
Ironically, this hard-pressed acceptance of focus is best explained by Rudolf Clausiusâ€™ theory of entropy that states â€œovertime, the entropy or disorder of any closed system increasesâ€. Akin to closets, which turn to disarray after some time and despite having been previously straightened out, organizations likewise come into disorder and become unfocused even if it was initially focused.
CEOs drive the focus or unfocus
A focused mindset is the result of the organization leadershipâ€™s handiwork. Without restraint from the top, a company may soon go to entropy. One classic marketing story is that of General Motors whose former CEO, Alfred Sloan, led the company to its glory. Before his management, General Motors was a far second to Ford Motors, with a meager 12 percent share to the latterâ€™s 50 percent market share. General Motors offered the market a wide range of passenger car brands with overlapping price ranges like Chevrolet, Oldsmobile, Scripps-Booth, Sheridan, Oakland, etc. in contrast to Fordâ€™s single brand with three price point models.
Sloanâ€™s single most important act was to cut the product lines, focus the segments he would like to serve and provide the differentiation for the remaining brands ensuring no pricing overlaps. Slowly but surely, this strategy drove General Motors to dominate the category for 50 years. Until, new management stepped in and set the tone for a new direction. In the words of the succeeding CEO Thomas Murphy, â€œGeneral Motors is not in the business of making cars. General Motors is in the business of making moneyâ€. Soon after, General Motors was back to its former shape of entropy, pre-Sloan time.
The unfocused mindset
There are a number of reasons that drive leadership and owners to a state of un-focus. Among them are:
Obsessive need to fill up manufacturing capabilities. Propelled by an intense desire to meet 100 percent production efficiency and reduce overhead, entrepreneurs consider production of other products that do not remain true to the original portfolio.
Flexible pricing. Faced by customers challenging a productâ€™s affordability, companies are susceptible to prolonged promotions and price cuts. In all likelihood, these companies do not realize that the real problem lie not in their absolute pricing but in the likelihood that these same consumers do not see any real value behind the product or service hence, the reason for their
questioning the pricing.
Maximizing distribution channels. Blessed with distribution capability, owners are endlessly tempted to seek and carry the hottest and newest products in the market never mind if it does not match the present brand portfolio.
Addressing customer life cycle. Recognizing that present customers may outgrow the existing product portfolio, organizations fall into the trap of extending the same brands and product portfolio to the next stage in the customer life cycle. Never mind if the market in the next age level and stage has different motivations altogether.
Evidence of successful focus. Ironically, while many firms are bent on un-focusing, many of the worldâ€™s most valuable brands have remained focused, in the process extending their life-years anchored on a single brand identity and providing evidence to the concept of focus. To name a few, among these brands are: Coca Cola, 117 years; Microsoft, 28 years; McDonalds, 48 years; Marlboro, 83 years; and Mercedes Benz, 77 years.
Achieving razor sharp focus. With hyper-competition, an influx of messages, and the increasing immunity of consumers to commercial messages (unless they see it as relevant and meaningful), it has been all the more exigent among the marketers to simplify their product offer and messages.
Some of the ways by which marketers can achieve a sharp focus include:
Focus and own one underlying motive. Pressed by stockholders to enter the casual footwear market, founding chairperson of Nike, Phil Knight resolutely refused to extend the powerful brand name Nike to casual footwear. The self-restrained CEO instead bought Cole Haan, a strong brand in the casual luxury footwear. A wise move since Nikeâ€™s brand equity always has been athletics and competitive sport, brand values that are in contrast to casual walk and leisure.
Focus and own one economic segment. When Toyota chair Eiji Toyoda decided on August, 1983 to enter the luxury car segment, he shrewdly did so with another brand name, Lexus. After all, Toyota has always had a strong association with the middle-income market.
Focus and own one lifestyle and personality. Despite the Harley Davidson motorcycles not exactly being the most superior and contemporary in todayâ€™s times, it remains as one of the worldâ€™s most valuable brands with a brand value of $6.78 billion. Harley Davidson motorcycles are not exactly the best functional motorcycles around. Harleys are the biggest, heaviest, loudest motorcycles in the road. But it is this sound, feel and look that recognize the macho, freedom-seeking person who is willing to break out from the mould and confining societal norms of dress and behavior.
Focus and own a motivation. There are reasons that drive people to buy a product or service. Key to this is the marketerâ€™s discovery of a latent need that will create an intense desire among a target market to purchase a product or service â€“ it may be the reliability of a parcel arriving absolutely and positively on time, in the case of Fedex or a higher order need attached to a cause or
advocacy in the case of Body Shop, a brand of make-up and personal toiletries that espouse â€œno to animal testing for cosmeticsâ€.
Focus and own a perception. A few decades back, computer users did not care about a microprocessor nor knew that it is the brain that powers computers. Until Intel came along and did a massive ingredient branding advertising campaign that created a strong perception that the fastest and most powerful computer can only come with an Intel microprocessor, a chip that is not even visible to the eye when one buys a computer.
Choosing a segment and stocking
Focusing means selecting the segment that one can best serve. This requires the marketer to limit the product line suited to what is relevant to the market segment and stocking in-depth against that product line. In more ways than one, there is greater success when one stakes a ground and dominates a segment, rather than simply being a small fish in a huge fishpond.