The Importance of Being First
By George Anderson
Marketing pros don’t like emphasizing it because they think it downplays the importance of the marketing function, but being the first one out with a product in a category can
be the most important element in determining success, writes Al Ries in his column on AdAge.com.
Mr. Ries points to companies and brands such as Coca-Cola, McDonald’s, and Nescafe as evidence of the value of being first in a category.
When he says first, however, Mr. Ries says he’s not talking so much about being first in the marketplace as being the first in the minds of consumers. That, he writes, “is the
essence of creating a brand.”
Getting into the minds of consumers first is something Apple Computer did with its iPod but Creative Technology Ltd. did not do with its Creative Nomad Jukebox.
Even though Creative Technology was first to market, it made a number of mistakes, including a too long and too generic sounding brand name as well as failing to identify that
its new Jukebox was something entirely different (a disk drive player) from its other MP3 players.
Apple avoided these same mistakes and, today, is the unrivaled leader in the category.
Moderator’s Comment: How important is being first to market with a product or retailing concept? What are the keys to being “first in the minds of consumers?”
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George Anderson – Moderator
Two words: Sony Betamax.
That is a rather self-fulfilling prophesy: “if you are first in consumer’s minds, you’re #1?” That seems to be saying that if you do such a good job with your product and marketing it that you reach #1, being #1 first makes it harder for others to knock you off. Um, yeah, ok, so….
Apple’s iPod was nearly *last* to market. Even Compaq had an MP3 player before them. Yes, they were early with the very high capacity hard-drive based player. But the iPod is a better example of biding your time, watching a market develop, really understanding the consumer demand through research, building a dramatically better product through hard work and inspiration, and timing the market perfectly. It’s not magic, and the only #1 or first-mover advantage was a remarkable leap into market leadership that was not relinquished.
Coke stays ahead of Pepsi through hard work, good marketing, and (at least in most people’s minds) a better tasting product. (That Pepsi taste test has since been discredited.)
Apple sold the first real personal computer. It was very successful. It was far and away #1. Then the IBM PC came out. Apple never led again.
IBM created the PC. Nearly every business computer was an IBM PC. It was #1, the “PC” was so associated in consumer’s minds with microprocessing computers that we now just call it “the PC.” IBM just sold its PC division to a Chinese company.
So color me skeptical. Yes, grabbing a huge chunk of mind-share by being firmly associated in consumer’s minds with a new product or category is a great advantage, but there’s no magic to it. You get there by hard work and you only stay there the same way.
The marketplace is littered with products that were first to market that were usurped by better marketers, who saw the value of the product and were able to modify it and/or market it better. In fact, Coca-Cola is a beneficiary of this: RC Cola in the 60’s and 70’s, came up with most soft drink innovations: diet, caffeine-free, etc. RC Cola was completely outmarketed by Pepsi and Coke, who also own the hearts and minds of their customers, and always have.
I would rather not be the company that invested in the product development, made all the misjudgments that so often come with a new product, but saw the value of a new product. I would much prefer to be the second one in with the ability to modify the product and launch a great marketing campaign.
Launching new items requires two things – a product and a consumer message. Al Ries has it right; the one who wins is the one who captures the mind of the consumer. We only have to look at the sheer number of new products introduced each year that fail from the start because the consumer has no idea they exist or the benefit they fulfill. Without a doubt, the slotting argument is tied into this. If new products had a compelling consumer message and truly generated incremental sales, the role of slotting funds would be minimal.
If you don’t have deep pockets, your only hope in being first in the consumers’ mind is to be first into the market, but if there is little or no investment behind the great idea – it can wane until someone with money can make it fly. We see products introduced all the time that are truly innovative, but they just couldn’t break through because there was little or no marketing support.
That said, being first into the market is your only hope for growth if you don’t have marketing dollars to bully your way through.
Count me in with those who believe Al has just created a nifty maxim to sell another book people shouldn’t read. As Karen said, better to be the last man standing than the first to the battlefield. The guys that show up early often make the best targets.
Not sure I agree with Al on this at all. Being first is good but being better is best.
The best scenario of all is being FIRST and BEST! Having a compelling product proposition, positioning it in an impactful and relevant way, spending behind the introduction, and watching out for the competition can generate category domination for many years to come. In the Hispanic market, there are still many categories that are wide open for marketers. In fact, some brands that never had any chance for leadership in the US market have positioned themselves very well in the Hispanic market, and have earned themselves a very nice and profitable niche.
Tell that to Netscape, or to Dbase, Lotus-123, or Word Perfect, Wordstar, or Harvard Graphics… being first, or even being market dominant, doesn’t prevent being disrupted by different ways of doing business. Microsoft’s bundling of a set of software for about the same price as one of the 3-4 products you used to purchase completely changed the market. That they could do this because of the constant stream of revenue provided by their dominance of the operating software is another issue.
The comment made by another commentator re: Coke vs. Pepsi makes the key point. You can’t just sit there and expect business to come to you. In markets that are increasingly global, with global customers and global competitors, you have to work at it. As I say to restaurateurs I work with, “if you stay the same, you fall behind, because the best of your competitors are constantly improving and innovating.”
Bundling, super-sizing, micro-targeting, better elucidating competitive advantages, etc. are strategies that can disrupt the leader (the whole “Innovator’s Dilemma” argument).
Being first makes it easier to be a target for others to aim at. Let them spot the mistakes and room for improvement and go for it. Not a great place to be. If people remember your name, it may well be for the mistakes you made or the things you forgot, not necessarily for carving a new path.
There are many companies (and for that matter Retailers) who are satisfied with being second and, if not BEST, just as good. Not everyone feels the need to be the one who opens all the doors. They prefer the low-risk approach. These companies have and will continue to thrive under the premise of let the other guys make all the initial mistakes and we’ll learn from that. A little unconventional, but it seems to work for them.
Ries makes clear with his Creative vs. iPod story that being first to market is not always the key to runaway success.
“First mover advantage” worked for ebay and Amazon.com, but not for Streamline or Pets.com. Once the press release announcement is a week old, execution takes over, lest the “fast followers” overtake and out-do you.
iPod is a fast follower. So is Nokia. Both firms should glance over their shoulders occasionally. Soon someone will be fast-following each of them.
Likely the best example of this is the Chrysler Mini Van. Although they weren’t the actual ‘first to market,’ they were ‘first to market’ in the eyes of the consumer. VW might dispute the first to market thing with their original ‘micro-bus’ of the 60’s. Nevertheless, the consumer caught on to the concept with the Chrysler Voyager and Caravan products. They still, after all these years, remain at or near the top with nothing more than an average product.
Being first isn’t the be all – end all answer, but to think that you can sit back and wait and just try to one-up the first guy isn’t the answer either. In the end, I’d rather be the leader than the follower any day. Even so, there are some that weren’t first that are clearly the best and eventually will be on top. That’s why it’s important, just not the utmost important thing.
I don’t think Ries meant that being first with a half baked product was the ingredient for success. I would venture a guess that he would say that the product must be better and the marketing of it first rate. That would seem to create a position of being first in most people’s minds. Most of the comments seem to be written by corporate bureaucrats who are more worried about failure than innovation. The most successful companies today are those that are first to innovate in spite of the fact that they know some big dinosaur competitor will try to usurp their position, and fail, before they eventually try to acquire the more nimble innovator. I’m not a Ries booster but there is merit to his position and, if not, we are all in trouble as the larger “copycats” will have nothing to rip off and they too will eventually fail.
Being “first to market” is only valuable to the extent that it gives you some head start on being “first in consumer’s minds.” Beyond that, it is irrelevant. How to be “first in consumer’s minds” is indeed the marketing Holy Grail, and the key is to get the product proposition so right that you own the category’s identity. Example: Cleveland Golf (I think?) invented the “big head” golf club) but the category is clearly identified with Calloway’s “Big Bertha.” The combination of product performance and relevant messaging won hands down.
In general, it is best to be first IF your product or service can be closely duplicated, in the short term. Hence, it’s most important to do your consumer research, testing and market conformation.
However, second entry can learn from the first in the market place, and better its efforts. Considerations to going second are having a point of difference from the first entry, good to meaningful marketing dollars against the target market; and then, a followup extension or new product that can propel your Brand (s) to leadership. Tough to do, but can be done, and is effective!!!!!!! Applies to all types of retailers. Hmmmmmmmmm