Brand Management - Helen Edwards on Branding: First-mover disadvantage
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Helen Edwards |
Being first past the post to disclose information or pre-empt legislation is a move worth making.
The received wisdom on 'first-mover advantage' is that it often isn't. Cautionary tales are told of companies that devote big resources to the development of a technology, then hurry on to launch, only to be outdone by fast-followers or 'consolidators', who comee in with better, cheaper variants.
Fast-followers, which include brands as diverse as Pampers and Microsoft, have gained such a good press in recent years that there is a body of literature from academics such as Costas Markides on how to ensure you are always handily placed in the 'race to be second'.
This defeatist line of thought can be turned on its head with a less constrained definition of 'first mover'.
It doesn't always have to be based on a new technology, or even a new market space. Nor does it have to cost big bucks in development. There are many ways to make a first move - and one of the most effective is to be the first in your market to disclose hitherto concealed information.
Harvester took this route to first-mover status last week, when it became the first national restaurant group to display full calorie details on its menus.
So customers learned that its 'recommended' mixed grill would set the dial at 910 calories, and if followed with caramel apple tart, the meal would total more than half the male recommended daily calorie allowance.
In opening up calorie information, Harvester is merely pre-empting a Department of Health (DoH) initiative that would make it standard practice for the entire industry. However, by doing it first, without coercion, it makes a powerful statement about the brand: we're open, we treat you as an adult, we've nothing to hide.
The reward is a perceptual gap between Harvester and rivals such as Subway and PizzaExpress, which have taken a stand against the DoH proposal (Marketing, 9 March). This is a low-cost, first-mover play.
In the great scheme of things, calorie measurement and menu reprinting, plus a bit of PR and some nice meal-counter apps do not constitute big investment stakes. Even so, it is not an entirely free ride for Harvester. It means that any flak about the calorific excesses of restaurant-chain food will be drawn to its brand first. Frank disclosure is never going to appeal to the faint-hearted.
It is, however, one of the few points of leverage that small brands can enjoy over behemoths. In 2007, the fast-growing household-cleaning brand Method anticipated proposed US legislation by fully declaring its products' ingredients on its packs.
In doing so, it caught rivals such as Procter & Gamble flat-footed. If Method had developed a technology, P&G could have responded with its own R&D muscle and nullified the advantage fast. Openness is harder to copy; in a big, siloed, legally cautious organisation, it can run against the cultural grain. P&G's reaction, to challenge the proposed legislation, played straight into its rival's hands.
First-mover disclosure is also hard for fast-followers to do better. It doesn't present any cost to customers, so no one can offer it more cheaply. Neither is it something that rivals can reproduce with more 'bells and whistles'. Your brand is either transparent or it is not.
Opening up closely guarded industry secrets, or anticipating upcoming legalisation is a thought-leadership stance that can amply repay pioneering boldness. In the consumer's mind it separates the mere followers from the real first-movers and shakers.
Helen Edwards has a PhD in marketing, an MBA from London Business School and is a partner at Passionbrand, where she works with some of the world's biggest advertisers
30 SECONDS ON ... FIRST-MOVER DISADVANTAGE
Bottom line: the companies that end up dominating new markets are rarely the ones that created them.
- Johnson's Holiday Skin: the first combination body lotion and self-tanning product. Launched in May 2005, it quickly broke sales records, with stores limiting customers to one bottle per person. The honeymoon didn't last. Dove, Nivea, Boots, St Tropez and Superdrug all followed with their own launches. A lack of innovation, combined with a masterbrand that lacked the glamour associations of a glowing tan, have left Johnson's playing catch-up.
- Visicalc: what? The first desktop spreadsheet programme - a brand that quietly disappeared when Lotus came in to dominate the category with 1-2-3, in turn to be crushed by Microsoft's Excel.
- Books.com: the first internet book retailer, founded in 1992 by Charles Stack, whose dream was to 'own a bookstore that had every book ever published, to feed my own habit'. Early days were promising, attracting half a million visitors a month. Two years later, Jeff Bezos launched Amazon - currently enjoying revenues of more than $34bn. After several mergers, books.com has all but disappeared.
by Helen Edwards from marketingmagazine.co.uk
This defeatist line of thought can be turned on its head with a less constrained definition of 'first mover'.
It doesn't always have to be based on a new technology, or even a new market space. Nor does it have to cost big bucks in development. There are many ways to make a first move - and one of the most effective is to be the first in your market to disclose hitherto concealed information.
Harvester took this route to first-mover status last week, when it became the first national restaurant group to display full calorie details on its menus.
So customers learned that its 'recommended' mixed grill would set the dial at 910 calories, and if followed with caramel apple tart, the meal would total more than half the male recommended daily calorie allowance.
In opening up calorie information, Harvester is merely pre-empting a Department of Health (DoH) initiative that would make it standard practice for the entire industry. However, by doing it first, without coercion, it makes a powerful statement about the brand: we're open, we treat you as an adult, we've nothing to hide.
The reward is a perceptual gap between Harvester and rivals such as Subway and PizzaExpress, which have taken a stand against the DoH proposal (Marketing, 9 March). This is a low-cost, first-mover play.
In the great scheme of things, calorie measurement and menu reprinting, plus a bit of PR and some nice meal-counter apps do not constitute big investment stakes. Even so, it is not an entirely free ride for Harvester. It means that any flak about the calorific excesses of restaurant-chain food will be drawn to its brand first. Frank disclosure is never going to appeal to the faint-hearted.
It is, however, one of the few points of leverage that small brands can enjoy over behemoths. In 2007, the fast-growing household-cleaning brand Method anticipated proposed US legislation by fully declaring its products' ingredients on its packs.
In doing so, it caught rivals such as Procter & Gamble flat-footed. If Method had developed a technology, P&G could have responded with its own R&D muscle and nullified the advantage fast. Openness is harder to copy; in a big, siloed, legally cautious organisation, it can run against the cultural grain. P&G's reaction, to challenge the proposed legislation, played straight into its rival's hands.
First-mover disclosure is also hard for fast-followers to do better. It doesn't present any cost to customers, so no one can offer it more cheaply. Neither is it something that rivals can reproduce with more 'bells and whistles'. Your brand is either transparent or it is not.
Opening up closely guarded industry secrets, or anticipating upcoming legalisation is a thought-leadership stance that can amply repay pioneering boldness. In the consumer's mind it separates the mere followers from the real first-movers and shakers.
Helen Edwards has a PhD in marketing, an MBA from London Business School and is a partner at Passionbrand, where she works with some of the world's biggest advertisers
30 SECONDS ON ... FIRST-MOVER DISADVANTAGE
Bottom line: the companies that end up dominating new markets are rarely the ones that created them.
- Johnson's Holiday Skin: the first combination body lotion and self-tanning product. Launched in May 2005, it quickly broke sales records, with stores limiting customers to one bottle per person. The honeymoon didn't last. Dove, Nivea, Boots, St Tropez and Superdrug all followed with their own launches. A lack of innovation, combined with a masterbrand that lacked the glamour associations of a glowing tan, have left Johnson's playing catch-up.
- Visicalc: what? The first desktop spreadsheet programme - a brand that quietly disappeared when Lotus came in to dominate the category with 1-2-3, in turn to be crushed by Microsoft's Excel.
- Books.com: the first internet book retailer, founded in 1992 by Charles Stack, whose dream was to 'own a bookstore that had every book ever published, to feed my own habit'. Early days were promising, attracting half a million visitors a month. Two years later, Jeff Bezos launched Amazon - currently enjoying revenues of more than $34bn. After several mergers, books.com has all but disappeared.
by Helen Edwards from marketingmagazine.co.uk
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