Red Oceans – are you drowning in a hypermature market?

One day I will wear a pair of shoes like this:

The footwear market is crowded with brands, all clamouring for attention.  This is a red ocean.  Birkenstocks have responded with shoes that are comfortable but known for their ugly appearance.  It is what Youngme Moon has classified as a ‘Hostile’ brand.

In her book, “Different”, she shows how companies augment products to compete. They add more features or create specialised versions of products for smaller segments.   Eventually, all offers look the same.  This ‘homogeneous heterogeneity’ defines hyper-mature markets.  This is where all the hyper-segmentation, hyper-augmentation, hyper-competition begins to look like a blur.  Change itself becomes a commodity.  Companies are working harder and harder to augment their products.  Competition reaches a frenzied pitch.  Overall growth slows to a trickle.  Everyone runs to stay where they are.  Executives in this world are routinely exhausted.  Classic red-queen effect.  Classic red ocean syndrome.

And no-one is impressed. Consumer satisfaction levels stay the same.  The self–defeating anti-logic fails to satisfy customers who turn the positives companies labour to offer, into negatives.  Your friendly customer service is “too pushy”, the free meals on your airline are ‘awful’ and when you work through the night to deliver a plan you are ‘putting them under pressure’.

How do you attract customers from a Red Ocean?

How do you offer a group of jaded, cynical, bored citizens something they will regard as special?  Professor Moon describes three different strategies for elevating yourself from a red ocean:

Reversal

Take away what they have come to expect and instead give them something new, fresh and unexpected.  Then allow the converts to rationalise the negatives into positives.

Google simplified the cluttered search screen of Yahoo or AltaVista, into a blank screen with one entry line.  And their search algorithm has been without compare since.

Breakaway

Create something new, giving you a long term sustainable advantage.

The Simpson’s, the most successful sitcom of all time spawned a whole new television genre, followed by shows like Beavis and Butthead, Southpark and King of the Hill.

Hostile

Create extreme differentiation, unresponsive to consumer concerns, shove it in their face and tell them to “take it or leave it”.  Birkenstocks refuse to create a ‘stylish, attractive’ shoe.  This search got over two million results:

Ugly Birkies – they really are ugly

Even Heidi Klum cannot do anything to change this:

Ugly Birkies – Heidi Klum to the rescue

And how did the people respond?

Ugly Birkies – Nope, even Heidi can’t help

So there are three approaches, but what can you do if you find yourself in an over-augmented market?

There are other approaches too.  Check out the posting ‘Blue Ocean Strategy’