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Tuesday, June 23, 2009

Evolve Your Business by Increasing the Size of the Pie

When it comes to getting a bigger piece of the market pie most people try to outdo the competition in an attempt to gain a larger share. In the design world, this can be achieved through lowering costs, providing additional benefits, delivering work faster, or various other strategies all of which require some sort of sacrifice. So is there a better alternative?

One way to expand your business is to increase the overall size of the pie by reaching out to an untapped audience. By targeting a new audience you effectively increase your potential for growth since you're no longer limited by your existing consumer/client circle. Better yet, if you're an early adopter of a new target group you can grab as much of the pie as possible before your competition catches on and follows the path you've paved.

The beauty of this method is that you don't even need to alter your core business model; you can get your bigger slice through savvy marketing and branding or, in some cases, by offering extended products/services as illustrated by the following two global brand examples:

Apple Computers 

For a period of time, Apple Computers (actually, computers in general) were seen as ugly, boxy machines used only by white-collared number-crunchers or geeky programmers who spend most of their time in a dimly lit basement. Computers were perceived to be too ugly for most households and too complicated for most average users, which effectively limited the audience to the aforementioned two groups.

Enter Apple, who first shocked the world with their 1984 tv commercial and then proceeded to shift people's perception of computers with their "Think Different" campaign in the late 90s. Apple created such an intuitive and user-friendly interface that people of all ages, from all backgrounds could pick up a computer and plug & play. By overhauling the design and branding, Apple made computers appealing to a wider audience, particularly with designers and other creative industry-types. Computers are no longer enigmatic machines only for the tech-savvy. Apple made computers "cool" and the brand is now synonymous with "cutting-edge design", something that was unimaginable 20 years ago.

Adidas Style a.k.a. Originals 

The history of this German sports brand is deeply rooted in the culture of football and the Olympics. Given the origins of Adidas, it is understandable why the brand was focused purely on sports performance and technology for most of its existence. However, guess which Adidas line of clothing is responsible for 20% of total brand sales based on the 2008 annual report? The Adidas Style brand extension, which targets a broader audience with casual streetware. Now take a guess which untouched target group propelled Adidas through the roof in the 1980s - Hip-Hop musicians and breakdancers! Who would have thought, right?

That's 20% of total sales that may not have existed if Adidas didn't think to market to a new audience and decided to stick with sports. Nowadays, every sports brand has a casual clothing line to target the mass consumer. These consumers may like the brand, but what if they don't need high-performance sports gear? Well, now they have that option.

Just remember, it's all about exposure. It's great that you have a targeted audience who appreciates your creative style, but always be on the lookout for opportunities to reach out to a new genre of consumers/clients. Don't just try to increase your share of the pie, try to increase the overall size of it!


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