Is your business Asda or Apple?

Is your business Asda or Apple?

This morning started off with a conversation with a budding entrepreneur. He's failed once already but is determined to get it right second time around. "What went wrong", I asked. "We didn't get the business position in the marketplace correct.", he replied.

It set me off thinking about the whole issue around how a business is perceived within its target market. Do potential customers really critique a business in this way consciously or is it conditioning over time by previous experiences?

My conclusion (at the moment) is that there is a scale for businesses to position themselves on that has two 800lb gorillas for bookends - Asda and Apple.

Asda

As now part of the gargantuan Walmart empire its hard to imagine that anyone has not been in an Asda supermarket at some point. Its stores are functional and in supermarket terms is risk-adverse. You wont find a new flavour of soup in Asda, you just find the existing flavours we buy in large quantities. They make it cheap and rely on volume to generate their profits.  A new soup flavour will come from being on sale in Morrisons and volumes reaching a significant level where Asda will step in and produce a low cost version.  Other supermarkets break new products in and Asda dominates that product when revenues are significant.

Apple

The Apple stores have become flagships for the company and its brand and a trip to the Apple store now for many shoppers is a real event. Apple essentially makes everything we don't actually need. No one "needs" an ipod, we "want" an ipod. The company has forged its place in the world and become the epicentre of consumerism by producing hugely aspirational items that establish our wealth and social status to others. As a company that is hugely successful it tends to make things that initially few can afford - the exact end of the spectrum to Asda - making Apple the other end of my scale. 

Innovation

Apple's business model and ongoing revenues are based on their ability to innovate new products to the market and not rely on other companies - Asda being the opposite. Both are massively successful therefore both strategies (one to innovate and the other to do nothing of the kind)fundamentally work. Is there a lesson here for other companies about their positioning in the markets they have targeted? Does being seen as an innovator give you a grossly different look and feel as a company than if you don't innovate and just develop products on top of existing markets?

Old Money

The other thing that I think factors in here is established brands. Both of these companies are not new, have significant war chests and can afford to take their time whilst contemplating where to take their business. New companies, particularly start-ups don't have this luxury and therefore need to be reasonably right with their market position in the first place, as a pivot would cost time and money they most likely don't have.

Position

So going back to this mornings interaction with my entrepreneur and his perception that positioning his business correctly could make or break it, I think he could be right. All entrepreneurs should probably take a look at their business and ask themselves if they are Asda or Apple.

If you're Asda then your proposition to the market is price based (cheap at a reasonable quality level and large volumes)and your marketing should reflect that to make sure there is no misunderstanding with your target audience.

If the answer to your Apple or Asda question is more towards Apple then your market proposition is around innovation, brand and social status (expensive, bespoke application, non-essential)where your marketing needs to scream quality and exclusivity and not suggest that everyone will have one any time soon.