Market Leader — Language of Luxury — Napa Consultants, International

In the realm of marketing luxury real estate, we have noticed some patterns of vulnerabilities among market leaders that represent opportunities for challengers. If they do have a chink in their armor it usually comes down to this: 1) they lose their focus; 2) they get complacent, or; 3) they lag behind technologically.

If you want to overtake the incumbent market leader, rather than identifying an uncontested market niche that you can dominate, you need to assess your opponent’s weakest link and wage an all-out battle that is 100% concentrated on one of these specific vulnerabilities.

In this post we look at the vulnerability of losing focus. Maintaining focus over time is one of the true tests of a market leader.

When you are a market leader in a specific category or niche within your marketplace there is always a temptation to lose your focus by diversifying or changing your singular winning formula because you have attracted an abundance of diverse opportunities. If you are the best prime rib restaurant in town, is it not logical that you could also become known as the best seafood restaurant? After all, the fundamentals of the restaurant business are the same regardless of what you serve.

There is a seafood restaurant in Los Angeles that was, year after year, one the highest grossing restaurants in town because of its moderately priced menu, its ideal setting and a bar business that was unstoppable. It appealed equally to families, tourists and young adults. We recently visited the restaurant after over a decade of no longer living in the city, expecting to find the same menu. Instead, they reinvented themselves as an expensive dinner house. They may have needed to refresh their brand, but they completely lost their focus on the core attributes that made them successful for decades. This restaurant is potentially vulnerable to competitors who could reintroduce the prior winning formula under a new brand.

To be successful today, you have to narrow your focus in order to build a position in the prospect's mind. Then you have to stay focused to sustain your market leadership position. A company that has resisted the temptation to diversify and has maintained its focus on its primary winning formula is Gerber.

Just take a walk down the baby food aisle in any supermarket in the USA (and dozens of countries around the world). Gerber dominates this food category and the shelf space as well. The company is owned by Nestlé, the largest food (and nutrition) company in the world, founded and headquartered in Switzerland. Gerber enjoys roughly 80% of the market share. Beech-Nut, a very distant #2, is also Swiss owned by the Hero Group, who makes fine jellies and jams in addition to baby food. With no substantial challenger, only Gerber and Beech-Nut currently have double-digit market shares.

How focused are you in your market place? In our next post we will cover the other two vulnerabilities of incumbent market leaders: Being complacent and being “tech-challenged”.

In our luxury real estate marketing consulting practice we work exclusively with incumbent market leaders or their challengers. We do not work with direct competitors within the same marketplace. Our ideal clients are those who realize just how much is at stake in terms of market share and revenue at this level, when you achieve top-of-mind status. If you have the heart of a champion and are keen on “the unabashed pursuit of market leadership”, give us a call for a complimentary consultation! 805.684.8180

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One of the best ways to become a market leader in your luxury real estate marketing practice is to carve out a new niche or create an entirely new market category. Why not start out as #1?

There is a huge competitive advantage in being the first in a freshly defined market segment. For example, have you ever tried or heard of 5-Hour Energy, the caffeine and vitamin liquid concentrate that comes in a small plastic bottle and is sold over the counter?

Seven years ago there was no such niche or sub-category of beverages. This energy shot trend was started by 5-Hour Energy. They dominate the category with an 80% market share, according to trade publication, Beverage Digest. Their annual sales are about $1 billion. The next closest competitor, NVE Pharmaceuticals has a paltry 5% market share. 5-Hour Energy, as a brand, has achieved the status of “category killer”.

Some of the best niches are not obvious. In our recent blog series, So You Want to Be a Market Leader-Part 3, we used the example of becoming the expert in ski-in/ski-out properties within the larger marketplace of the entire ski resort town. This is a very narrow market niche, but a potentially lucrative one as these kinds of properties tend to be the most expensive.

Let’s take this example a few steps further. Before you declare yourself the expert, you need to have some ski-in/ski-out property sales (at least one) under your belt to have some credibility. Then, when you take it upon yourself to define or carve out a niche where heretofore the niche was not perceived as a separate area of specialization amazing things happen.

Suddenly, you are perceived differently and so is the competitive landscape. Because you are the first, you literally cause your name to be identified with the new category that previously did not exist. Once this takes place it is very difficult for your competition to dislodge the #1 position that you have secured in the minds of your target market.

When people indentify you as the ski-in/ski-out maven, they will refer you to other owners of such properties (who they probably know very well) as the expert. If you were the owner of a ski-in/ski out property, wouldn’t you want to be referred to the leading expert in this field to list your home, instead of the generalist? That is what branding is all about.

In your luxury real estate practice, the sharper your focus the more you become an expert and the more likely you are to succeed. Concentration in your chosen area gives you a command not only of the nuances of the market segment itself, but also of the mindset of your target market. The depth of your knowledge and your certainty about your niche becomes palpable to potential clients. The sharpness of your focus also enables you to discover opportunities that completely elude your competition. If you are passionate about your niche, you will not need energy shots to keep you awake, lift your spirits or stay motivated .

You may think that it is scary to be so focused within a niche because you have to sacrifice other general business if you give your niche your undivided attention. But, in time your name can become extremely well-known and, ideally, synonymous with the category itself. That is when you become the undisputed category killer. If you sustain your focus, you can become so formidable as the market leader that your would-be competition will not even bother to challenge you.

In our luxury real estate marketing consulting practice we work exclusively with incumbent market leaders or their challengers. We do not work with direct competitors within the same marketplace. Our ideal clients are those who realize just how much is at stake in terms of market share and revenue at this level, when you achieve top-of-mind status. If you have the heart of a champion and are keen on “the unabashed pursuit of market leadership”, give us a call for a complimentary consultation! 805.684.8180