Find a selling point that works

By Art Ilano

Ladies and gentlemen, our pet peeve for today: companies that claim to also offer what the leading brands provide, but at a lower price.

Okay, to be honest, we’re not saying that this strategy won’t work. Of course, it will. For instance, if there is one dominant brand in the industry, and you happen to be the second guy to come up to the fore, then chances are that you’ll get a hefty chunk of the market to yourself by promising the same benefits with a lower-priced product.

In fact, the rule of thumb for most sectors is that, in the long run, the typical market leader will have 40 percent of the market, while the challenger will have 20 percent. So 20 percent of a product category, especially a big category, isn’t anything to sneeze at.

But what if you’re a teeny, tiny company that steps up to a market that is already crowded with competitors?

Well, forget it then. History is full of examples of feisty little companies that popped up, tried to challenge the entrenched leaders with a cheaper product, and failed to get a significant market share. Think Alert toothpaste, Pop Cola (before it was swallowed up by a larger competitor), and all those generic-sounding cheaper detergent powders.

For the full article, get a copy of the November-December issue of SME Insight Magazine.