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Reverse Thinking Helps Mature Sectors Grow

Philadelphia — Reaching consumers in mature and highly competitive industries sometimes requires marketers to reverse their strategies.

Harvard Business School associate professor of business administration Youngme Moon, speaking to attendees at a standing-room only panel session at the Cable & Telecommunications Association for Marketing Summit here last week, discussed such course corrections from companies such as Swatch, Harley-Davidson Motorcycles Inc. and H.G. Heinz Co.

Harley-Davidson became a powerhouse in the motorcycle world, she said, by marketing its products to “outlaw bikers,” which Moon described as “an iconic target segment that bears no resemblance to the real market.”

There are few real outlaw bikers in the United States — Harley's core customers are wealthy men, Moon noted.

“Instead of chasing people, Harley created a magnet,” said Moon, who was introduced by Time Warner Cable senior vice president of video product management Julie Simon.

Phillip Morris Inc. (now Altria Group) also created an iconic target segment in its push to sell cigarettes, with the creation of the Marlboro Man, Moon said.

Developing “breakaway positioning strategies” is another way companies have cracked the competition, Moon said, citing MTV: Music Television and Swatch as two examples of companies that pursued such tactics.

Before Swatch began producing watches in the 1980s that were more fashion accessories than jewelry, Swiss watches were known for their high price and quality. Swatch changed that industry by selling inexpensive plastic pieces, with many consumers purchasing multiple watches from the company.

“Nobody bought a Swatch because of how accurately they told time,” Moon said.

More recently, Heinz used a breakaway marketing strategy to boost stagnant ketchup sales by creating a line of EZ Squirt ketchup bottles that come in wild colors, including purple, green and blue.

Consumers that previously finished a single ketchup bottle in a few months began going through the EZ Squirt bottles in a few days, often buying two, three or four of the bottles at the same time, according to Moon.

Subtle difference in products become more significant as a market segment matures, Moon said, citing the growth of the automobile industry's sport-utility vehicle sector as an example. While there were only eight models of SUVs for consumers to choose from 10 to 15 years ago, today there are dozens, Moon noted.

“One way to determine how mature a market is, is to look a how many product offerings are there,” Moon said. “As markets get more mature and competition gets fierce, the differences between products become more subtle.”

Moon also discussed the history of Sony Corp.'s Walkman — the product that created the portable music player category — and how Sony now has 100 different models on the market.