Mcdonalds amazes me. Everywhere I go, they seem to be running rings around their competition.
Only yesterday , I passed through Lithgow NSW, which always boasts a line of cars through drive through. But yesterday the line was out to the road. Dine in was also overflowing, with patrons driving around the car park waiting for an opening; an available space.
Meanwhile, over the road, at competitor one, their traffic was a little slower. Their car park was half full, at most. Other nearby competitors were the same.
Fast food was a new category
I used to believe, incorrectly, that McDonalds created the fast food category. Well, indeed they were not actually the first in fast food , however, they were one of the first , among a handful of startups in the early 1950’s. So, my early theory that McDonalds were the creators of fast food was wrong.
McDonald’s was an early entrant
However, McDonalds did start in the early days of the fast food category. In 1955, most places serving food in the United States were known affectionately as diners. They had plates, cutlery and (if the movies are anything to go by) girls on roller skates to serve the food. Looking back, I’m guessing workplace health and safety wasn’t quite the legal minefield it is today!
Fast food competitors
Although Kentucky Fried Chicken had history as a cafe, their first “fast food” franchise was in Salt Lake City, Utah, in 1952. Then Burger King started in Miami, Florida, in 1954. Some sources say this was even earlier but perhaps under a different name and business model.
McDonalds started in 1955, in San Bernardino , California. Perhaps not the creator of the fast food category but among the first. Indeed the first we know of in California.
What about Subway?
Legend has it that Subway started as “Pete’s Sandwhich Shop” in 1965, 10 years after some of the early entrants to fast food we mentioned above. Then, in 1968, they re-branded to Subway. Indeed, Subway, at least in Australia has grown quickly. Subway positioned itself in a whole new category; healthy fast food. I recall in their ads, they even showed rapid weight loss of someone on the “Subway diet”. In case you don’t believe my assessment of their brand positioning, look at their napkins, where they include their carefully chosen company name of “Doctor’s and Associates Inc”.
Al Ries and Jack trout wrote a book about positioning, where they discuss how people think about brands. They discuss our organisation of brands into categories and suggest most people can only hold 7 brands or less in their minds , for any particular category. Which brands do you think of when you think of fast food?
What is the consideration set?
For me, McDonalds tops the list and while it may not top your list , I imagine it would at least be among the first brands you think of when you hear the words fast food. Any brand you would consider for purchase, in a particular category, is known as the consideration set.
I understand I have relied heavily on this one example of fast food. What about “other industries? Think about the dominant player in any other industry. Were they the first? Or among the first?
Social media was new
Facebook wasn’t the first social media website but it was anon the first. Social media was’ a new category, with only a handful of players.
Disruption creates a new category
Perhaps you are still not Convinced. Recently, we have seen businesses disrupt entire industries, sometimes with thousands of competitors. This is true, however, in doing so they have created a new category or tagged along as an early entrant.
What if Uber was a taxi company?
Uber didn’t start a transport or taxi company. Instead, they created a ride hailing service. What difference would it have made if they lauched as a taxi company? They might have created an efficient and successful local taxi service and competed in an already saturated industry.
How Airbnb found new clients
Airbnb did not launch a new hotel or a booking service for existing hotels. They created a whole new category where anyone with a spare mattress could rent it out for some pocket money. Imagine how different Airbnb would be now, if they used their software to become another hotel booking site, competing in an ocean of hotel booking sites.
Define your winning category
Creating a new category or entering early into that category is a marketing secret that many overlook but it’s such an important foundation for some of the outstanding success stories we know and love.
Before you start tinkering with your product, service or positioning, take a step back. What category does your business compete in now? What category could you switch to, which would make the world of difference for your brand.