Marketing Strategy and Competitive Positioning pdf ebook

Settlers – these offer ‘me-too’ value, based on equalling what competitors do, usually in 
the same way that they do it, but often cheaper.
● 
Migrators – these offer conventional value improvements over competitors – for exam-
ple, in product function improvements or design.
● 
Pioneers – these are the businesses that represent real value innovations, such as the 
Sony Walkman, the Dyson bagless, cyclone carpet cleaner, the Swatch watch,and so on. 
Apple’s iPhone is a pioneer, because by introducing the App Store and linking app devel-
opers and app users, Apple created an entire platform, not just another phone product 
(Van Alstyne et al., 2016).
A portfolio that is heavy with settlers leads to a company’s decline. One dominated 
by migrators offers some growth potential, but is vulnerable to the strength of a value 
innovator. The issue is whether we are gearing our planning towards pioneers, or merely 
settling for the status quo. The challenge is to continuously shift the portfolio away from 
settlers. This may produce very different conclusions to those based on just looking at 
current numbers such as market share, sales revenue, customer satisfaction and profit-
ability – because these numbers all represent the past, not the future (Kim and Mauborgne, 
1997, 1998).

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332
CHAPTER 12 COMPETING THROUGH INNOVATION
The underlying principle is that ‘understanding the needs of customers is what distin-
guishes innovation from novelty . . . pioneers are routinely pushed aside by rivals whose 
skills are in the marketplace rather than the laboratory’ (Kay, 2009). For example, Apple’s 
achievements are less about its new technology and more about deploying existing technol-
ogy in ways that meet consumer needs and attracting buyers through beautifully designed 
devices that are user friendly. The issue is creating superior customer value through innova-
tion and this is the critical challenge for marketing strategy.
12.1.8 The perverse customer
One further driver of value innovation is the truculent or perverse post-recessionary cus-
tomer. A weakness of much of the literature of marketing and management, and perhaps 
even more of economics, is the assumption of the compliant and acquiescent customer who 
responds predictably to price and other marketing stimuli, and is a willing partner in the 
consumption process. In reality, we face the sophisticated consumer who often rejects (or at 
least claims to reject) traditional marketing messages. One overarching impact of economic 
downturn and recession is a wholesale loss of confidence in institutions, both public and 
commercial, and in particular a loss of trust in business and the professions, which takes 
consumer sophistication much further. Hence, we have the perverse customer.
It is not so much that we have to deal with the sophisticated customer who is more 
demanding in relatively conventional ways, but rather a customer who is actually perverse 
and maven-like in their dealings with business and with authority in general. The perverse 
customer is the one who takes a positive delight in confounding the attempts by their 
political masters, lobbyists, or by business to change their behaviour. In other words, the 
customer who delights in being awkward and who changes the rules. Consider the pressure 
placed on consumers to adopt electric/hybrid cars promising environmental benefits. In 
spite of all the hoopla and policy pressure, it took Toyota a decade to sell the first million 
Prius vehicles, in a world with more than a billion vehicles on the road. The evidence is that 
the customer decisions on vehicles regarding size and fuel-efficiency have more to do with 
oil prices than environmental conscience. With the plunge in oil prices, companies such as 
Tesla in the electric car market suffered badly, because car buyers returned to fast sports 
saloons and 4
*4s. One might say that Tesla’s key insight was to make electric cars ‘cool’, 
rather than virtuous, purchases. Indeed, it is probably more due to recent governmental 
policy drivers that mainstream manufacturers now are looking to move wholesale into 
electric vehicles.
The real point is that in the tough, cynical post-recession markets in which we have to 
survive, we have to identify new value-creating and profit-generating opportunities and 
innovate in the areas that customers value. Consider the following examples of the perverse 
customer, but importantly, what comes out in business opportunities:
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