Back in 1975 when we lived in the small of city Napier I had an after school job selling newspapers. I was 12 years old at the time.
In those days newspapers were published in the afternoons, and one of the main ways to sell them was on street corners in the city or by going to door-to-door.
Anyway, as part of my job I would stand on the footpath of Tennyson street – newspapers at the ready – and yell at the top of my lungs, “PAPER – HAWKE’S BAY HERALD TRIBUNE!”. Then, along with a bit of banter and jovial accosting, I was able to get a percentage of passerby’s to stop and buy a paper.
It was good fun stuff. But I had a problem. And that problem was…I had stiff competition.
More to the point, the newspaper I sold – as I quickly learned – was not the number one newspaper in the city. That spot belonged to the Daily Telegraph.
So, when selling newspapers on Tennyson street you had myself who sold the Hawke’s Bay Herald Tribune…and next to me was the bloke selling the Daily Telegraph. And he would out-sell me probably 2-1.
I tried everything to outdo my counterpart in the attention and selling stakes. I would yell louder than he did. I would try to distract him. A few times I even tried stealing his customers from under his nose. But to no avail. People wanted to buy the #1 newspaper.
Not known to me at the time – being a 12 year kid and all – was that selling the Hawke’s Bay Herald Tribune just happened to be my first lesson in strategy.
You see, The Daily Telegraph had a much more powerful brand. This was built upon its strategic brand position as a Napier Paper, whereas the Hawke’s Bay Herald Tribune originated from the nearby city of Hastings. So the Telegraph enjoyed strong brand loyalty from local residents.
Obviously, as a 12 year old newspaper salesman I knew nothing about stuff like strategic brand positioning, brand loyalty or the importance of being the #1 in a market or category. And it wasn’t until years later when I began to study the great strategists such as Sun Tzu, Warren Buffett and Jack Trout, that I came to understand the crucial importance of these strategic factors.
Bottom line when it comes to strategy – strategic brand positioning is everything. Effective brand positioning places you in the minds of potential customers as the best choice when compared to competitors. It is what helps to propel you to number one in a market or category. And when you’re number one, you are very hard to displace.
Take these words of wisdom from Warren Buffett, written in 1993. Here he writes about some of the rationale behind his significant investments in brand giants, Gillette and Coca Cola:
“Coke and Gillette have actually increased their worldwide shares of market in recent years. The might of their brand names, the attributes of their products, and the strength of their distribution systems give them an enormous competitive advantage, setting up a protective moat around their economic castles. The average company, in contrast, does battle daily without any such means of protection.” (Warren Buffett 1993 Letter to Shareholders)
Coca-Cola and Gillette are global giants. But in the early part of their existence, when they were a lot smaller, the focus was on creating powerful strategic positions with products superior to their competitors.
This strategic positioning helped to build competitive moats that in turn helps to protect these businesses from competition.
The Daily Telegraph did pretty much the same thing, and dominated the Herald Tribune in the process.
Average businesses on the other hand are more inclined to compete head-to-head. There is poor strategic brand positioning, which has a flow on effect to brand communications, product development and the ability to distribute deep and wide.
Again, if you want to dominate your marketplace, you need to develop a strong strategic position, built upon superior products (and/or services). Do this and you have a far better chance of being number #1. And that’s just one thing I learned as a 12 year old newspaper salesman.