Wednesday, July 11, 2007

Does market leadership makes one complacent?........

Have you ever observed or thought, why is it that market leaders in a particular product category are not able to carry-on with their leadership when the product category moves into the level technologically? The best example which I can recall is the case of mosquito repellants, initially it started with the "Tortoise brand" of mosquito repellants which were coil based and one had to burn them to smoke away mosquitoes. The next jump in the technology came with the introduction of mats, and it was a set of smaller unknown companies which came with the mat-based repellants , some of whom were later taken over . The next round of improvement in the product offerings came with the introduction of vaporizers and ‘Good Knight’ was the one which captured the market leadership position. The pattern thrown up is that the market leader is not the first one to spot the change in the technology and capitalize on it, leading to the loss of market leadership position in the product category. The question is why does this happen? does the company become too obsessed with the fact that it is the market leader and losses touch with its customers, or that the company is so busy selling the product that in the process it looses focus on the customer 'needs' it is serving. I feel a similar trend can be seen emerging in the water purification business, Eureka Forbes has been the market leader in the segment for a long time, but with the next round of technologies coming in like the Reverse Osmosis machines, the edge is with other companies like Kent RO and others ,,,,,,are we again seeing the cycle repeat as in the mosquito repellant industry....there are many more examples of this phenomenon in the marketing world.



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