Jon over at Living Brands has posted about Nintendo creating a profitable, differentiated 3rd place position in the video console market, leaving Microsoft and Sony to slug it out in an expensive battle for number one. Nintendo's Wii console is the one with the remote that you wave about as a virtual sword or tennis racket. A great idea they had to communicate this product is to film people using it, and you can see some of these films here.
Jon's suggestion flies in the face of most thinking on portfolios today, with many big companies focusing on being number 1 or 2, and selling off smaller brands. But I think he has a point. In many markets the battle is with retailer own label, and one way to win is to push the differentiation really hard, even if this means being in a niche. I'm thinking Innocent and Green & Blacks. And what about Method, the funky, eco-friendly detergent about to be launched in the UK?!
However, there are a couple of big provisos. First, you have to be highly differentiated, as is the case with Nintendo. If they had kept on pushing me-too consoles, competing only on processor power, they'd probably be dead. Second, and just as hard, is that the company has to accept good profits but small sales. Not many seem to prepared to build this type of brand. But more of them seem ready to buy them: Unilever/Ben & Jerry's; Pepsi/PJ Smoothies; Cadbury's Green & Blacks... Coke/Innocent?
5-minute workout: what would a smaller, highly differentiated and profitable positioning look like in your market? If the company won't back it, why not leave and do it yourself!