Jay Parkhill March 25th, 2008
Harvard Business School’s Working Knowledge newsletter is one of my favorite regular reads. This recent article teases apart market segments in a smart way.
Per the article, most people tend to think of markets as a trade-off between the high-margin, low-volume top end and the low-cost high-volume structure at the other end.
Author/professor John Quelch says that this ignores the substantial middle section of the market. In the automotive world, he points out that this is where the Ford Taurus and Toyota Camry live- mainstays of each company’s product lines.
My question is- what is the best way to fill this market? Ford is too old a company to be a meaningful example. Toyota has moved upmarket from the high-volume end over the past 30 years but still has such a "value" imprimatur that it had to introduce Lexus as a new brand to capture the premium market.
If I have an idea for a company and would like to play in Prof. Quelch’s "midfield", am I better of starting with a premium product and gradually moving the price point down, or starting at the low end and working up?
Is controlling the midfield a reasonable goal at all, or does it require too much luck and carry to much risk of losing focus?Tags: business models, Markets