Changing The Game: Puma & Mini

A close friend a Leo Burnett sent us two fascinating links today that have us buzzing around the office this morning. In today's business climate the timeline between innovation and commoditization is shorter everyday. The fruit of reverse engineering, globalization and the democratization of information, this trend has forced many a company/product to fail.

The name of the game is no longer purely "differentiation" within the category. To succeed today, companies must be flexible and willing to adapt BEYOND its category. Good companies may originate within an established category, but truly GREAT companies look for opportunities to CREATE THEIR OWN CATEGORY.

One company doing just that is PUMA. An established player in the athletic shoe market, PUMA has leveraged the 1970's nostalgia of its brand and morphed into the new hip hybrid in fashion apparrel. PUMA has moved from the number four player in a highly competitive category to the leader in a new category much of its own making, "athletic chic". No longer is Puma exclusively forced to compete head-to-head with the likes of Nike, Reebok and New Balance for the callused feet of sports fanatics. Puma has taken the time to understand its "meaning" (via customer segmentation) and has leveraged this knowledge into the dominant position in an equally lucrative (if not more lucrative) market populated by the likes of smaller, less well-financed players such as Vans and, most recently, Adidas.

And for a residual benefit to the dawning of the "athletic chic" trend/market, it will be increasingly difficult to pick out Americans on the Champs Elyses with their jeans and "white trainers".

Another company that has done a phenomenal job at crafting a niche category for itself is Mini Cooper. At the $16,000 to $20,000 price point, Mini could have found itself vying in the brutally competitive American automobile market witht the likes of the Ford Escort. However, Mini has zigged while everyone else zagged with "out-of -the-box" innovations like zero percent financing. Again, due to a bit of customer segmentation and an intuitive understanding of the various reasons that people "drive", Mini has laid claim to a niche previously owned by the likes of Mini's parent, BMW. The niche? The "ultimate drivers". Whereas, it was once believed only that "real" driving enthusiasts could appreciate the corinthian leather and fine craftmanship of the elite vehicles from Mercedes and BMW, Mini understands that there is huge opportunity with the under 20K "ultimate wanna-bes". The result has been that Mini no longer competes for customers who need to get from A-to-B for under twenty-thousand dollars. Mini competes alone for the subset of those individuals who drive not because they have to get somewhere, but because they want to enjoy the thrill of the road. Individuals who want to "motor". The residue of Mini's dogged pursuit of this previously untapped market, is that it has created a movement that has garnered micro-categories for "motoring gear".

One could argue that the recent success of PUMA and Mini are due to their obvious commonalities such as design innovation and co-branding. However, the true secret to their success is that both of these companies took the time to understand their market, their potential customer base and their respective places on these two planes. By understanding their unique "tapastries of meaning" relative to the competition, both Mini and PUMA were able to create wholly new categories that they alone could dominate.