Few things are so neglected in strategy as the importance of being the first company to enter a market segment, which no one has decided to enter before due to its requirements.
However, and especially when it comes to consumer goods, being a pioneer is frequently a source of competitive advantage. One has time on one’s side in order to strengthen the relationships with distributors and suppliers before the arrival of competition. The best of both are chosen, and the relationship with them is strengthened. Other competitors that enter later will have to settle for the rest.
Being a pioneer also makes it easier to position one’s brand in the mind of consumers. Tomorrow there may be dozens of competitors, which makes the market complex. In their search for simplicity, consumers tend to identify the segment (product) with the first brand.
Take beers in the US for example. The first imported brand after the Second World War was Heineken. Half a century later, which is the brand that has the largest market share (within the segment of imported beers)? Not the tastiest, the one with the largest advertising budget, the cheapest or the bottle with the best design, but Heineken with 30 per cent of sales, despite the fact that there are 425 brands within the segment of imported beers.
Which brand launched the first ‘light’ beer? Miller. How many light brands are there nowadays? 300. Which one sells the most? Miller Light, the first.
Look at Acetomynophenol brands. The first to come into the market was Tylenol. The number of brands nowadays? 20. The market leader? Tylenol.
The same happened with Coca-Cola, Hertz, Gillette, Federal Express, Aspirin (Bayer), Kleenex, Xerox, Band-Aid, Scotch Tape and so on. All were the first to enter into a segment, and now have such a strong position in the mind of the consumer, that they subconsciously associate the brand with the product. And competitor’s brands do not cross consumer’s minds.
Therefore, the consumer asks for Kleenex when he wants paper tissues, uses the verb ‘Xerox’ instead of ‘photocopy’, orders a Coke, when he would settle for any cola, says “Fed Ex this now” and buys aspirin, forgetting that this is only a brand (belonging to Bayer) and not the name of a product.
So, with regards to mass consumer goods, being the first is frequently a source of competitive advantage. Not always, but frequently. Because “whoever comes, we are already there.” That is to say, being one step ahead is always an advantage. And this all arises from the fact that people tend to associate a product (or event) with the first, the leader.
PS – So, who was the first person who flew over the Atlantic Ocean? Charles Lindbergh. And the second? Who was the first person who stepped on the moon? Neil Armstrong. And the second?