Who Ate My Lunch? Not Serving Adjacent Market

When mobile communication came into Nigeria, MTN was the only player for a number of years. As a result, they determine the price of their products: from the sim card to the airtime. They were literally a monopoly. Any player coming into the market must either play second fiddle or try to meet a need that they were not meeting.

Before Glo Mobile got into the ring, MTN came in catering to the rich. Having mobile phones, then, was more a rich person’s exclusive preserve. A sim card then went for 20,000-30,000 ($200-$300 at the then exchange rate). The poor and middle class were left out of mobile phone use. Anyone who wants to use it must rent the phone for calls from call agents who were making a living from it.

Glo Mobile needed to come up with a better strategy to get into the mobile telecommunication market which is dominated by MTN. What they did I believe is the most innovative strategy they have done since. Their strategy nearly sent MTN out of the market. If they had planned that strategy with also having one of the best services, they would have taken over the market from MTN.

And they did come up with one. They came in with a cause as an advocate for the poor and middle class. They positioned themselves as heroes of those people who were unable to buy a sim card. They were standing with the poor and middle class. That was a market that MTN left unserved.

Glo Mobile crashed the price of a sim card to N100 ($1 at the rate of exchange then). People responded. They started buying Glo Mobile sim cards. Many people even threw away the MTN sim card that they bought then. Glo Mobile came into the market with a big bang.?However, if their service equaled their positioning, they would have shifted the market.

MTN quickly responded and dropped their price while maintaining high-quality service and customer care which Glo Mobile lacked. As a result MTN still maintained its market share. People who threw away their MTN sim cards had to get them back when they realize Glo Mobile services and customer care were not as top-notch as MTN. But they did try to shift the market and eat MTN’s lunch.

The best way for companies who want to enter a new market can do so is to get through the unmet needs of clients. It is said that every solution creates a series of problems in its wake. And if the company doesn’t take notice of those new problems that it has created, it opens itself to be blindsided in the market.

All most companies need is a foot in the market and they will completely bring about a shift in the market. It’s easy to launch an aggressive takeover of a market when you have a firm foot in the market. If companies don’t continually empathize with their customers, they will leave room for another company to get into that same market and eat their lunch.

That was exactly what happened to Nokia in Nigeria. Like MTN, their products were expensive for most people to purchase.?Unlike MTN, they didn’t have a system in Nigeria to respond fast. They were very much happy with their cash cow. It was bringing them all that they needed. They became blind to the needs of the people. Furthermore, because of the success of their cash cow, they become arrogant towards other customers. Instead of taking the complaints as feedback, they see it as criticism. They would have gained insights from those complaints to better serve their customers. Or even create new products to serve those needs.

When a company loses touch with its customers, the relationship becomes transactional. The cash cow gives it a form of security that it uses to take everyone for granted. However, companies that continually stay in touch with their customers, interviewing and observing their customers to uncover needs that are not being met, will have a transformational relationship with them.

It’s easy to shift the market from under a company that has transactional relationships with its customer, but harder with a company that has transformational relationships. That is because the connection in the later relationship is deeper and working unlike the former.

When I consult for clients who want to penetrate a market, my advice has always been to empathize with the target customers to know their complaints, pains, and unmet needs instead of focusing on the dominant player. That will require being flexible with your offering. Your offering should aim at helping those with needs not being met. Get your feet in the door and grow from there then take on the dominant player head-on. You won’t last in the market when your strategy is to take on the dominant player head-on especially if you don’t have the people and finances to wage a protracted war against them.

That was the mistake Glo Mobile did. They take on the dominant player and competed based on price and not on service. When their competitor also followed and lowered their price, the competition moved to service and customer experience where they lost out.

Techno, on the other hand, had a different strategy. They came in serving a market that Nokia wasn’t serving. Techno’s strategy was to target those customers that Nokia had left behind, excluded from the mobile phone race. Nokia didn’t see them as a competitor. They grew and flourished in that market. Their product wasn’t top quality but they served the market with a lower-priced phone anyone can buy. Most Nigerians had two phones; one will be Nokia and the smaller one a Techno.

After Techno has established itself in that market, it then launched into the market Nokia was serving. As it gained credibility with the low-end market, it kept improving its product. They got used to its product. When it was ready to launch into the high-end market where it takes on Nokia, it already had become a household name in Nigeria. It was easy to take over the market from Nokia when they came in with touch-screen phones that were flexible and easier to use than Nokia phones.

The lesson here is that when you are launching into a market with a dominant player ensure that your strategy is focused on meeting the unmet needs of the market and then building your customer service and experience. Most dominant players are arrogant, to eat their lunch creates a customer service and experience that is memorable.