Differentiation is Key to Marketing Success
We talk a lot about differentiation and not looking identical to your competitors. The idea is simple: if you look the same as your competitor it’s harder for a buyer to make a purchase decision. Compete with a better message and a better brand. That’s overly simplistic but for our purpose for this blog, it’ll do.
That’s the why. What about the how?
Another way to think about creating & competing with your local brand is choosing the ground from which you’ll fight. You want that ground to be empty and then occupy it.
Nintendo has a knack for doing this. Even if you’re not, and never have been, into video games – the industry is a fascinating one.
Nintendo has been a big player in the video game industry since around 1985 when they introduced the Nintendo Entertainment System (NES). They innovated the video game industry after the industry crashed in the mid 80’s where it went from $3 billion in sales to just $100 million. The industry has gone through many changes – going from a niche interest to a mainstream $100 billion industry today. Nintendo has been right there through it all and has re-invented themselves several times.
Pick Your Ground
In the mid 80’s Nintendo focused on building a sophisticated distribution system, developing iconic franchises like the Mario Brothers and getting the most value from their properties. They didn’t have much competition, and none were rebuilding an industry. By 1989 Nintendo had a 90% market share.
They won a fierce battle with Sega in the late 80’s to mid 90’s by fighting with their ability to create, and get every bit of value from, many successful franchises like Mario, Donkey Kong, Final Fantasy and others.
Sega did well for a while, and even outsold Nintendo in the early 90’s, by creating a “cool” brand led by Sonic the Hedgehog. On a side note, Sonic was and still is a huge franchise. At his peak, Sonic had a higher Q score than Mickey Mouse! That’s what Nintendo was up against and stayed steady with their strategy of superior distribution, and squeezing every dime they could from their consoles and franchises.
They lost their crown once 3D graphics became the standard in the mid 90’s. Nintendo lost market share for the next decade to Sony (Playstation) and Microsoft (Xbox). They were basically staying alive with their licensing and iconic properties like Mario, Donkey Kong, and their mobile game units like the DS.
The problem was PlayStation and Xbox were competing against each other with ever more powerful graphics and online gaming. Realistic movie looking first-person-shooter games with online communities launched video games into the mainstream. Hardcore gamers became a thing. Game systems were powerful entertainment systems and Nintendo’s hardware didn’t keep up. They had lots of value in their franchises, but the market changed and didn’t seem interested in a third high-end graphics platform.
It looked like Nintendo was going to be forced out of the gaming hardware market until they re-invented how people game with the Nintendo Wii in 2006.
The Wii didn’t have the high-end realistic graphics. Instead of a traditional controller, the user interface was a motion-based system where the user had to physically move. Both PlayStation and Xbox would try to replicate this without much success.
After the far less successful Wii-U, Nintendo then developed the Switch which is a quasi-mobile unit. Again, they’re offering something to cater to casual gamers and they’re getting more value from their characters. They focus on a different user, and user experience, then the PlayStation and Xbox.
Instead of competing for the same consumer against better-prepared competitors in a saturated market, Nintendo went after a more casual and younger gamer and sold at a lower price than their competitors. Nintendo went cuddly which was a great fit for many of their franchises. They are the only one in the market offering what they offer. It was unoccupied territory from which they could compete and today they are well positioned if a competitor tries to encroach on the ground they occupy.