We’re all indies now. The mass market is turning into a myriad of micro-markets, as Chris Anderson explained in “The Long Tail” and any contact with a teenager these days will confirm. If the future of markets is a future of niche markets, “mass customization” is the concept to invoke from a manufacturing perspective, when dealing with atoms. For companies depending on more intangible assets as loyalty and “love” generated by their brands, there would be no more efficient way to deal with those niche tastes than co-innovation and collaboration with other brands.
We’re moving toward “markets of ten thousand”. As Chris Anderson argues, the number is large enough to build a business on, but small enough to remain focused and avoid huge competition. It is also the opportunity for smaller companies enabled by the new tools of democratized manufacturing to route around the old retail and production barriers.
So, what about bigger companies, those in need to leverage brands and physical assets (stores, plants, employees) with a bigger number of costumers? If “markets of ten thousand” define the future successful strategy for products and services, are companies and executives minded to deal with mass markets ready for finding and responding to the opportunity in minority tastes?
We think collaboration, co-branding and co-innovation will play an important role for tackling this new “innovator dilemma”: how to address the increasing demand of products diversification while dealing with the diminishing but still existing barriers of the twentieth-century limits of choice for physical goods (products not popular enough for manufacturers to make, retailers to carry or customers to find).
The costs of launching a brand new product are less when you add an existing product or brand to the mix instead of creating an entirely new product. Also, a wider range of consumers can be reached since fans have already been found and made. Besides, loyal fans will follow a brand to the edges of the Earth, no matter where they go.
It’s possible today to find examples of this kind of strategies; companies that usually target bigger markets but addressing a niche market by collaborating with other brands. Those examples, considered exceptional today, could become a new normal in a world of “markets of a thousand”.
Best Western runs an exclusive rewards program for Harley Davidson enthusiasts. The agreement provides benefits for both brands and their respective customers. Riders who participate get special treatment at the hotel including a clean wipe-down towel at check-in. The hotel chain also offers motorcycle enthusiasts Best Western Ride Rewards, a special segment of its Best Western Rewards loyalty program. Harley Owners Group members receive additional benefits, including an automatic upgrade to Platinum status and 15 percent bonus points.
To celebrate Barbie’s 50th anniversary, Mattel and Fiat joined forces to create the 500 Barbie. She is the world’s most famous fashion doll. So why not team her up with the world’s most fashionable small car? That seemed to be the rationale behind Fiat building a special one-off 500 model in nail-polish-pink and featuring lip gloss in the glove compartment. As a result of this partnership Fiat made headlines instantly and its model was turned into a toy that is now the first idea of what a “cool car” means for thousands of young girls.
The menu at the popular chain of restaurants T.G.I. Friday’s has an entire section dedicated to Jack Daniel’s flavored food. The partnership started in 1997 and continues to be a customer favorite. They’re a successful restaurant and Jack Daniels is a very popular whiskey, so both received a boost when the two combined their brand assets so commensals can get a steak infused in their favorite spirit.
French clothing and accessories retailer Colette introduced a line of Hello Kitty x Playboy items, including candy, mirrors, memo notes, lighters, mugs, iPhone cases, socks, bowties, boxers, shirts, and more. Naturally, the items sport one of two perfect logo mashups—Kitty wearing bunny ears, and the Playboy bunny with a bow on one ear. A third brand was included in the partnership. German optics company Leica fused the children’s character Hello Kitty with the Playboy Bunny for the logo of a limited edition camera.