Off-beat vs herd mentality

We hear, read and witness a new launch every other day now. While some introduce completely new, exciting offerings (if not breathtaking); some choose to launch rehatched versions of their sometimes best selling, and sometimes slow moving models. But what goes on behind launching each of these offerings; what’s the thought process; what’s the game plan? Though, it’s impossible to get it entirely spot on, unless of course I were a company insider, here’s an attempt to make sense of some product strategies.
There are largely two ways of going about deciding a new product– a) Let’s call this one herd mentality - dive into a segment which has been witnessing great growth in the recent past – double digit, triple digit growth rates and the like – backed up of course with million page market research report indicating (actually shouting) that the concerned product category has immense potential, and will continue to grow for… well, ever.
And b) The ‘off-beat’ approach - enter virgin territory; create a new niche; spawn a new segment; etc etc…
But both approaches have their set of problems.
‘a’ for instance is a crowded place (remember ‘herd’); the competition here is intense; under cutting the only mantra; better value-for–money proposition, a prerequisite. So, if you are Hero Honda, Bajaj Auto or even TVS, it’s okay to take this approach. After all, the three have had reasonably good numbers by their sides, as well as success, at some level or the other. As a result are better equipped both mentally and financially to take a hammering if their products were to fail.
We have seen the three at it as well, and pretty often. Bajaj tried to knock off Hero Honda in the 100c segment, Hero Honda on the other hand tried the same on the former in the 150cc plus segment. As for TVS, it tried to outdo both in both these categories. The outcome though is been more or less the same on both counts – HH continues uninterrupted in the 100s while Bajaj and TVS have had to make do with relatively smaller, but sumptuous helpings. While in the 150cc plus, Bajaj is still king, with TVS and HH managing just about okay sales.

However, if you were a new entrant to the market, or have been battling miniscule sales, much like Suzuki and Yamaha respectively, and obviously Kinetic, it’s best to take the ‘off-beat’ approach.
Here’s how it helps. Creating a new segment, or a sub segment, first, takes the competition away. It also helps the maker get noticed, as it gives the company something new and different to harp about. All the manufacturer has to do then, is to convince buyers, the new product category actually makes sense for him. We have seen a few examples of this ‘Off beat’ approach, and I’ll list them for you in the subsequent posts.