Being inclusive within your market category with your direct competition is one of the most important things you can do as a brand, and yet, nearly every company in every category ignores it.
It doesn't make sense to help a company who is syphoning profits from your market share directly… until you start talking about the companies who are syphoning profits from your market share indirectly. Working collectively with your direct competition can save your market category from tanking due to the indirect competition rising. Allow me to explain an example of this:
The California Milk Processing Board singlehandedly saved the milk industry. In the early 80's they developed an advertising campaign saying, "Milk, it does the body good".
Consumers already knew that milk was good for the body but that didn't stop the sales from slipping. Science would also come in and say that milk wasn't as good for the body as they originally proclaimed. Profits in milk started to take a classic dip as more progressive breakfast beverages became widely available.
Then Goodby, Silverstein and Partners created the Got Milk? campaign which raised the profits for the entire milk industry. This campaign would run for two decades peaking the sales of milk, confirming the success of the milk campaign. This advertising campaign saved the entire milk industry.
All of the milk farmers and processors decided to work together and realized that it shouldn't convince consumers to choose their milk over the other milks. They decided that they should instead increase the desire to drink milk instead of say cranberry juice or a sports drink, and even soda. With this mindset, profits for the entire milk industry increased. Sales for milk only slip when people start choosing other beverages. Realizing this and then working together collaboratively created the demand for milk.
The sales for milk has been on a steady decline for about a decade now. There are a few reasons for such. They stopped creating the demand for milk with their Got Milk advertising. Milk Life, the new advertising milk campaign, isn't creating the same desire to remind consumers to buy milk. They should continue the Got Milk campaign with newer ideas, and then create that same demand for chocolate milk.
To expand their Milk revenue further, they should also consider horizontal segmentation by offering other varieties of milk, such as dark chocolate milk. Currently, there are so many different varieties of milk now that the market is oversaturated. The only way to overcome the milk sales decline is to create the demand and desire for the milk category - taking the attention away from the milk 'imposters'.
Tell me, can you think of any company who has RECENTLY done something like this with their competitors? I'll wait...
Today's Lesson: Work with your competitors to create the demand for your category.