No space for brands in the middle
March 23, 2010
In a recent piece in the New Yorker, James Surowiecki talks about the difficult middle ground that exists for brands. He’s one of many commentators who believe the middle ground is going to get tougher and tougher as the competition becomes polarized between high-end and good-enough solutions.
“These two strategies may look completely different, but they have one
crucial thing in common: they don’t target the amorphous blob of
consumers who make up the middle of the market. Paradoxically, ignoring
these people has turned out to be a great way of getting lots of
customers, because, in many businesses, high- and low-end producers are
taking more and more of the market.”
Most of America’s leading brands are neither, they are firmly in the middle and try to offer something for everything, as Surowiecki notes, this is where GM got it so badly wrong and is finding it hard to turn around.
The remedy here is very complex-middle brands have to decide what their future strategy can be. Can they find the right combination of quality and value to deliver to the “good-enough” end of the market? Do they have the equity in their brand to go more upscale?
The fate of brands is probably just a reflection of the way society is moving with the few high income earners taking more of the pie and the emergence of an ever larger group of lower-end consumers demanding greater value.
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