What did Howard Schultz do? In an incredible burst of business creativity, he opened a coffee shop that specialized in, of all things, coffee. In other words, he narrowed the focus.
I remember very well the chaos which i saw when I entered in a Nigerian shop in Dublin. You can find everything, from packaged food, toilet paper, car tires and laptops.
So what can you find to eat in a delicatessen? Everything. Soups, salads, hot and cold sandwiches, three types of roast beef, four types of ham, five types of cheese. Hard rolls, soft rolls, hero rolls, three types of pickles, four types of bread, five types of bagels. Potato chips, pretzels, corn chips. Muffins, doughnuts, cookies, cakes, candy bars, ice cream, frozen yogurt. Beer, soda, water, coffee, tea, soft drinks of all varieties. Newspapers, cigarettes, lottery tickets. Every decent delicatessen prides itself on carrying everything.
What did Fred DeLuca do? He narrowed the focus to one type of sandwich, the submarine sandwich. Good things happen when you contract your brand rather than expand it. The first stroke of genius in DeLuca’s case was in coming up with the name. Fred DeLuca called his chain Subway, a great name for a store that sold just submarine sandwiches. It was a name that no consumer could forget.
The second smart move concerned operations. When you make only submarine sandwiches, you get pretty good at making submarine sandwiches.
Good things happen when you contract rather than expand your business. Most retail category killers follow the same five-step pattern.
1. Narrow the focus. A powerful branding program always starts by contracting the category, not expanding it. 2. Stock in depth. A typical Toys “R” Us store carries 10,000 toys versus 3,000 toys for a large department store. 3. Buy cheap. Toys “R” Us makes its money buying toys, not selling toys. 4. Sell cheap. When you can buy cheap, you can sell cheap and still maintain good margins. 5. Dominate the category. The ultimate objective of any branding program is to dominate a category.
When you dominate a category, you become extremely powerful.
And in order to dominate a category, you must narrow your brand’s focus. Why then do so few marketers want to contract their brands? Why do most marketers want to expand their brands? Because people look at successful companies and are led astray. They assume that companies are successful because they are expanding. (Starbucks, for example, currently is busy getting into everything from ice cream to bottled drinks to tea.)
But let’s focus on you for a moment. Let’s say that you want to be rich. Now ask yourself: Can I get rich by doing what rich people do? Rich people buy expensive houses and eat in expensive restaurants. They drive Rolls-Royces and wear Rolex watches. They vacation on the Riviera. Would buying an expensive house, a Rolls-Royce, and a Rolex make you rich? Just the opposite. It’s likely to make you poor, even bankrupt.
If you want to be rich, you have to do what rich people did before they were rich—you have to find out what they did to become rich. If you want to have a successful company, you have to do what successful companies did before they were successful.
As it happens, they all did the same thing. They narrowed their focus.
Good things happen when you narrow the focus.
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