MARKETING BLOG Issue 15
Supermarket war ends badly for me-too competitor
Over the last five years, we have watched with great interest a head-to-head competition between a well-established grocer (Longos) and a virtually identical competitor, Michael-Angelos, that opened across the street (a development I covered in Wolf Bites #12).
Michael-Angelos appeared to think that it could knock off its rival by being a little more upscale and little bigger (a textbook example of "Mini Marketing"). They also assumed that Longo customers had no brand loyalty and would happily cross the street to shop at Michael-Angelos. None of this happened. Almost nobody crossed the street and Michael-Angelos was left with precious few customers – and a long line of bored check out staff.
In short order, the Michael-Angelos closed and we assumed that the story (and our real life marketing case study) was over. But about a year later the Michael-Angelos reopened, a development we covered in Wolf Bites #13. The offering was about the same (a little more upscale, a little more expensive), but the store was reduced to about a tenth of its original footprint and there was a corresponding decrease in product selection.
Guess what happened? Nothing. The mini-me version of Michael-Angelos closed, proving what we had thought all along: you can't knock off a well-established competitor with a virtually identical offering.
Remember this: Brand loyalty is earned. It is not given. Once earned, brand loyalty is not easily overcome. You can have success with an entirely new offering that has clear product differentiation and significant customer benefits. But even then it will take time to steal away your competitor's customers. You have no chance if your offering is virtually identical, a marketing lesson Michael-Angelos learned the hard way.
|Wolfgang Franke is President & Creative Director of Words at Work Advertising & Marketing, a full service communications company established in 1988. Our growing list of valued clients are found throughout our local market, Markham and the Greater Toronto area, across Canada in cities such as London, Ontario, and Edmonton, Alberta, and an expanding list of international locations ranging from The Big Apple in New York to Kanturk, Ireland.|