Why a first to market strategy gives the edge over trying to follow a leader with a better product in today’s volatile market.
First to market strategies or quality? Which is better? Do you wait and follow your competitors with a better product? Or, provided your product meets the basic quality standards, do you get into the market ahead of all your competitors?
Delivers the brand's current promise on quality and efficacy.
Ensures the product is compliant with health and safety regulations.
The case for quality is strong.
When your competitors go first, you can watch how the market reacts, learn from their mistakes and discover what could really turn consumers on about your product.
Sony Betamax was first to market with the video cassette recorder in 1975. A year later, JVC followed with the VHS format. Yet it was VHS that ultimately dominated. Betamax, although considered technically superior, could only record for 60 minutes. VHS could record for 2 hours - long enough to record a movie, which meant not only did consumers prefer it, but the movie rental market did too.
Yet, in today's fast-changing market conditions, the case for first to market strategy is stronger.
'The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.' - Rupert Murdoch, owner of a $30bn media empire.
A comprehensive study on the impact of speed to market on new product success supports this position. Researchers examined the relationship between speed to market and new product success in 692 NPD projects. The result? Speed to market is positively associated with overall new product success.
The researchers concluded, 'It is more important to execute a time‐based strategy in an unfamiliar, emerging, or fast‐changing market than in a familiar, existing and stable market’. However a first to market strategy is not just about lowering inventory costs with a reduced product time to market. It’s about grabbing advantage in the market and capitalising on it.
How first to market gives you the edge.
It's the marketer's job to formulate strategies that build a barrier to enhance the sustainability of your differential advantage.
Being first to market makes it easier to establish differential advantage because you can:
Achieve greater market penetration and expansion.
Dominate and keep competitors out.
Capture the demand in the market to drive revenue.
Obtain best locations.
Win the best distribution deals.
Attract offers to form strategic partnerships and alliances.
Those who are first to market are usually the market leaders. It's your brand that sets the standard that other products will be judged on.
A question of real estate.
Being first allows you to own and occupy two pieces of very valuable marketing real estate.
First position in the consumer's mind.
According to Al Ries and Jack Trout's classic 22 Immutable Laws of Marketing, it's easier to get into the mind of consumers first, rather than trying to convince people you have a better product or service.
It's being on the market first that makes people remember. Superior brand recognition builds better customer loyalty.
Being first to market is the new news - the kind that people like to share and comment on. You are doing something different that people notice. Those who come next are your followers, doing something that has already been done but just with a variation.
Being first makes you the leader, not just in market dominance but in people's perceptions too. Once you are the leader, it's very hard for competitors to dislodge you, even if they hit back with a better product. You can always improve your product informed by the knowledge and expertise gained from the customer base you've already captured. You can stay ahead of your competitors while they fight a constant uphill battle.
This article first appeared on Simon's blog.
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