Niche: The missing middle and why business needs to specialise to survive Paperback – 2 Aug 2012
Customers who bought this item also bought
A fascinating book . . . Compelling . . . Its easy-going style ranges confidently over the modern marketing landscape and the examples of brands rising and falling are compelling. The research is excellent
James Harkin . . . wears lightly a wide range of expertise . . . A good read
Niche is an eye-opening analysis of why big business has failed to sell to the mainstream, in the tradition of Chris Anderson's The Long TailSee all Product description
Enter your mobile number or email address below and we'll send you a link to download the free Kindle App. Then you can start reading Kindle books on your smartphone, tablet, or computer - no Kindle device required.
To get the free app, enter mobile phone number.
|5 star (0%)|
|4 star (0%)|
|3 star (0%)|
|2 star (0%)|
|1 star (0%)|
Most helpful customer reviews on Amazon.com
If you were going to open an ice-cream stand on a popular beach this summer, the best position you could choose would be in the middle of the stretch of beach on which there are bathers. By being in the middle, you are accessible to the largest number of potential customers.
The large retailers, using the same logic, took the centre position in their context, whether in food, clothing, household goods and so on, and thrived. Frank Woolworth’s five and dime stores thrived on just this logic, being the go-to store for everyone across a large range of goods. By 1979, F.W. Woolworth had become the largest department store in the world. In 1997, the last Woolworths store in the United States closed and was replaced on the Dow Jones stock market index by Walmart; in 2009 it closed in Britain.
What went wrong?
Harkin argues, using a wide array of examples, that the days of the generalist are over and the only survivors are the niched businesses. He cites General Motors with its almost indistinguishable brands, ‘Reader’s Digest’ with the “general interest” magazine, newspapers providing general news, the big five Hollywood studios with their wide audience appeal movies, political parties with policies as wide as possible, and more. In every case, the generalist lost to the specialist and where the generalist remains, they are battling to survive using the last gasp argument of lower prices to attract what customers remain for them.
The reasons for moving towards the middle were different in each industry. In car manufacturing it was led by economies of scale, with the move to produce more cars on the same platform making it difficult to distinguish a Chevy from a Pontiac or a Buick. In publishing, when there wasn’t much else available, the whole family might have read the ‘Reader’s Digest’. In entertainment, when there was only a handful of TV channels to view, the programming could be designed to appeal, more or less, to all.
As Harkin explains, it wasn’t only the changes going on around the generalist companies that caused their demise, it was as often the false belief in their strength that led them to make poor decisions.
At its height, General Foods produced some of the most valuable mainstream brands, like Maxwell House coffee. Produced with higher quality Arabica beans, the flavour was appreciated and valued. With time and the increased costs of Arabica, they began to add more and more of the cheaper Robusta beans.
When America re-discovered their love of coffee, and chains of speciality coffee houses opened catering to coffee enthusiasts, it wasn’t Maxwell House that won; it was Starbucks with their high- priced drinks and superior quality.
What has become undeniable is that if a person can get exactly what they want rather than only approximately what they want, the will choose the exactly what they want even if they have to pay significantly more for the pleasure. Now with unprecedented access to information and its easy availability, we can find exactly what we want, making compromising almost unnecessary.
In the movie industry, the big five studios have been replaced by studios with clearly defined audiences and styles. Miramax allowed Tarantino to produce his movie, ‘Reservoir Dogs’, despite not really approving of it, making way for a movie that had a narrow (but lucrative) appeal and began a string of similarly successful niched works. With their low budget and high quality positioning, they produced ‘The Crying Game’, ‘Sex Lies and Videotape’, and others.
American cable channel HBO started competing by acquiring exclusive rights to sporting events, but soon moved to focus on producing the highest quality television programming available. Rather than going for the mass appeal big shows, such as ‘Big Brother’, or superficial dramas and movies, they focused on turning HBO into a haven for the highest quality fare aimed at the more-cerebral, upper end of the viewing market.
HBO produced ‘The Wire’, ‘Sex and the City’, and the enormously successful ‘The Sopranos’. All were aimed at very specific, highbrow audiences.
Many large corporations that saw the writing on the wall began to absorb the niche producers. Ben and Jerry’s ice-cream, the product of two hippie activist, was acquired in 2000 by Unilever. Rather than absorbing it into their huge company and making it look and feel like another Unilever brand, they left it as it was, with its underground ethos and 60’s character.
The move to niches is probably more clearly seen in the field of newspaper publishing where general interest brands are struggling to survive. If one can get up to the minute (literally) news on-line in the field of one’s immediate and specific interest, why buy and read a generalist paper?
The analysis of the causes, forms and consequences of not defining a business offering in a more niched way makes this book worth reading. That we need to focus our businesses more is hardly new, however, Harkin will add a very strong sense of urgency to our pursuit of a niche.
Readability Light --+-- Serious
Insights High -+---- Low
Practical High -+--- Low
Ian Mann of Gateways consults internationally on leadership and strategy