The Musical Chairs Theory of Markets | Greg Hoyos

50 THINGS I’VE LEARNED IN 50 YEARS OF MARKETING

#17

By Greg Hoyos

BRIDGETOWN, Barbados, Thursday May 31, 2018 – Marketing used to be a fight for category domination. You entered the fray, your product outperformed its rivals and your budget out-muscled everyone else’s. And you dominated, or else you withdrew.

The mantra was “only the top two brands in any category make money; if yours isn’t one of them, it’s time to get out.”

It was essentially a game of musical chairs, marketing-style; you had to steal someone else’s “chair” (i.e. their market share) to grab a piece of the business for yourself. And usually the big guys won, because they had the resources to muscle their way to the top and stay there.

A zero-sum game: for me to win, someone else had to lose. I’ve sat numerous meetings analysing Nielsen market share reports and trying to devise ways to hold onto our client’s volume.

But as demand has evolved, something curious has been happening. Markets have been expanding, and – with multiplying consumer demand – splintering into increasing segments. Buyers have suddenly realized that they can have many variations of any product that suits their own individual taste.

And here’s the thing: this trend has been accompanied by volume and value growth, so it’s not as though the big guys have had to feel the pain. Pretty much everyone has gained anyway.

Markets are now like musical chairs in reverse.

Now in many categories, when the music stops, burgeoning market demand has added another chair (in a different style) instead of taking one away. Sure, many of the chairs may be smaller, niche models, but they are still profitable seats for their owners.

So you don’t need to command maximum market share to succeed in a category any longer. There’s money to be made – and often greater margins – on the periphery.

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Greg Hoyos is founder and chairman at GHA DDB. He started his first regional ad agency in 1970; has won five CLIOs (including the 1979 Worldwide Copywriting statue) and numerous Caribbean ADDYs; and is the author of ‘Marketing and Demand’ and ‘A History of Marketing in 32 Objects’. He can be reached at (246) 234-4110 or greg@greghoyos.com