A decade or so ago, a new local foods company began a big advertising campaign, promising that “Coming soon, a whole new range of products” would be seen in the grocery shelves. They wanted to be everywhere, selling all things from catsup and condiments to canned fruits and packaged foods.

And then silence. Nothing came out of this campaign.

There was a bit too much ambition involved in that teaser ad. And while ambition is normally a good thing, reality has a way of being much less forgiving.

Entering the market is a very tough task. So trying to enter the market with a LOT of products at once makes the task nearly impossible. This is because new companies already have very limited resources as it is. So if you had a thousand pesos to spend on promotions, it makes more sense to focus that thousand pesos on just one product, rather than ending up with only a hundred little bucks each for ten different ones.

There are two obstacles involved in the above scenario. One, the market would be suspicious of any new brand that comes out of the blue and brandishing a whole army of items. And second, the retailers just won’t let you get away with it. Retailers need assurance that you’re a stable firm… and how can they have this assurance if you have no track record to speak of? You’ll be lucky to get one product into their valuable shelf space. An entire army of products? Forget it.

You’re better off focusing on just one product first.

In military parlance, this is called the beachhead strategy. When invaders storm a foreign land, the first thing that they have to do is to establish a beachhead. The beachhead is a landing zone where they can concentrate all their military firepower, effectively owning that tiny strip of land and making it their new logistical launchpad. Without a beachhead, attacking a foreign country can be a nightmare since the invading army has no way to establish itself firmly on foreign ground.

You can also call it a foot-in-the-door strategy, if you hate army talk. You first need a way to get your foot in the door of your target… and then the rest of your body can eventually follow.

Example: Toyota vs. Nissan.
In the early 1970s, Toyota and Nissan were both struggling to penetrate the US market. Nissan’s approach was to invade everywhere, establishing a network in many states at the same time in an attempt to quickly create a nationwide presence.

Toyota, on the other hand, decided to just enter the California market. Why? Because this was the biggest market, and it was effectively concentrated. It was the perfect beachhead location.

Result? Nissan had a hard time promoting its cars because its resources became effectively diluted. Thus, there was minimal fanfare for its products in each of its locations in the US.

Toyota, on the other hand, was able to focus all of its promotional efforts on a relatively concentrated spot, resulting in a tremendous push for its products in the California market. And since California was a trendsetter among the US states, what worked in California was bound to attract attention elsewhere. So once Toyota had its foot in the door and conquered California, it then gradually spread out to the other states as well.

Application: If you have a company with a relatively small pool of resources, you can’t afford to go nationwide immediately. Your first step is to focus on your initial chosen market (preferably big enough to be a trendsetter, such as Metro Manila or Cebu) and pour all of your resources here first. Once you’ve satisfactorily conquered the market, and then it is time to think of expanding nationwide.

Now back to our story about that failed food company. If this firm really wanted to become the next Del Monte, saturating the market with a host of different products, the ideal way to do this, based on our above discussion, is to first get its foot into the retail door by focusing on one or one set of products first. Perhaps, say, condiments such as soy sauce and vinegar. Once it builds up a reputation with these products, then it manages to (1) build brand equity among the buyers, thus making it easier for them to consider any other products that the company comes out with, and (2) gives credibility to the company from the perspective of the retailers, making them likely to allow future products into their shelves as well.