Knock Yourself Off For Maximum Market Penentration

The word “knock-off” has a negative connotation in the business world. We associate that with people copying others’ ideas and products. Generally speaking, this is true. But it is not always a bad thing.

Think about this statement for a moment: There are 14 car companies in the entire world. But somehow there are a combined 54 car brands with vehicles in production (as of the fourth quarter, 2019.)

If you’re wondering how that’s possible, there’s a straightforward explanation: Those 14 car companies control the manufacturing of all 54 brands. General Motors and Volkswagen alone manage 17 different brands, some of which directly compete against one another. So when you’re in the market for your next supercar, and you’re debating between a Porsche or a Lamborghini, you can rest easy knowing that either way Volkswagen is getting your money…a lot of it. These are not necessarily “knock-offs, but often they are very similar cars, made on the same manufacturing line, with just a few different options. Since they are knocking off themselves, this is a smart business strategy to expand their footprint in a given market.

Do you want to book a hotel or flight? Looking for the best deal? Don’t worry. Expedia Group has you covered. In their mission of becoming the leading online authority for everything travel-related, their brands include Expedia, Orbitz, Travelocity, and Hotwire, to name just a few.

While this blanket (borderline monopolization) may seem to be an unattainable concept to a small-to-medium sized business, it’s by no means out of reach.

In the simplest terms, creating a successful multi-brand portfolio is as easy as targeting a specific segment and dissecting its many needs.

Think of laundry detergent as a simple example and consider these four brands and what they do.

Tide, a complete family detergent

Era, a stain fighter

Cheer, protects colors

Gain, touts clothes that come out smelling clean

All four of these bands are owned by Procter and Gamble. The advantage of this multi-brand portfolio is that it allows the company to cover all of the different needs of a larger segment. Plus, it allows them to cover more shelf space in the stores.

In our world, one of our markets is direct mail for the Real Estate Investment space. Some of our clients use a strategy of self-competition regularly. Investors will often mail different postcards with competing messages, looks, or options to the same list. Their goal is to cover all of the potential needs or hot buttons of a given prospect. For example, say an investor is targeting both sellers with distressed properties and also sellers who are in foreclosure. Since they are not sure of the motivation of the seller, they’ll send two mailers to the same prospective seller: one with their name and the other with the name of their partner. Both mailers will have different messages and stylization with the same end goal of getting them to pick up the phone. This also gives them a better chance of success from a pure numbers game. If a prospect gets five postcards in the mail all offering to buy their house, if two of them are from the same person, that person just doubled their chance of the prospect calling them. It is a similar concept to controlling more shelf space.

This self-competition model can work in just about any industry. Virtually every business has the ability to segment. A product based company can have a high-end line and a discount line of the same type of product. You can actually brand them with totally different names so the consumer doesn’t even realize they are from the same company.

The next time you are trying to figure out how to expand sales, think about how you can knock yourself off to expand your footprint in your market.