Tapped Out Your Niche? Now What?

You’ve grown your business in a healthy niche market. That’s what you are supposed to do—find a specialized product or service, develop a trusted brand, and give customers what they want.  But, what happens when your niche becomes a noose?  How can you continue to grow when you begin to recognize the limits of your existing market?

Peach State Pride, which has a chain of stores and lines of clothing devoted to the love of Georgia and Southern culture, is working hard to answer this question.  The state has about 9.7 million people who need shirts, according to the 2010 US Census.  What about the rest of the country? Derek Chitwood, Founder and CEO, along with Kari Beth, his wife and the company’s VP of Marketing, are our guests this week and they share how they plan to continue expanding their retail presence in the age of Amazon.

Find the Core

coreThe business graveyard is littered with failed attempts at brand extensions.  INC magazine has a list of the all-time most ridiculous attempts at transferring brand equity, which are certainly good for a laugh—Virgin (Airline) Wedding Dresses, Dr. Pepper BBQ Sauce, and the Evian Water Bra were my favorites.  Jokes aside, moving into any new product or market is challenging and risky.  When one adds the complexity of a new name or an entirely new customer base, the task becomes exponentially harder.

Some companies are able to do it successfully, and according to Adweek, “All successful extensions rest on the same three pillars—fit, leverage and opportunity. Research associate Edward M. Tauber, Ph.D., elaborates: ‘The brand should be a logical fit with the parent brand; the parent should give the extension an edge in the new category; and the extension should have the potential to generate significant sales.’”

Fit with the parent brand means understanding your brand’s value in the marketplace and its competitive positioning.  It means having a visceral relationship to the core of what your brand stands for in the mind of customers.  It means preserving the essence of the brand, while softening the edges and boundaries.

On the surface, Peach State Pride looks like a company that sells products for loyal, excited Georgians. But, the essence is about home.  As Kari puts it, “At the core, we want to give communities a chance to celebrate where they’re from. It’s all about that local hometown pride.”  Most everybody has a home, and this is what will allow the company to continue to grow.

Identify Natural Extensions to the Brand

Focusing on their core theme of hometown pride, the management team at Peach State Pride can see natural extensions from the product lines they’ve built and the customers they are already natural extensionsserving—expanding their online presence and moving into neighboring states. While the company has always had online shopping, the customer experience has focused on “brick and mortar to establish and build the brand,” according to Derek.  For example, they will often host parties in their stores around college football games and local events.

Moving forward, they will maintain a split focus, making the online play a more central part of their strategy.  “We are investing heavily in our online stores…The sky is truly the limit there. We’re not limited by geography; there should be no limit,” Kari says about the planned shift.  It’s natural, but also necessary with the changes in the industry. They really don’t have much of a choice.  “We know what is coming,” she moves on to say.

The other extension is a little trickier—starting to target customers that are not from Georgia.  Kari jokes, “While we feel like Georgia is the greatest place in the world. Alabama thinks that, too.”  Yet, they are planning to move into neighboring states—very, very carefully.  “In some ways, it makes sense from a business standpoint, to replicate what we’ve done. So, we’re slowly getting into it a little bit. At the core of what we do, Peach State Pride and the state of Georgia is always going to be extremely important.  I think that it’s a brand that could cross over state lines, because we sell a lot of other brands besides Peach State Pride in our stores.”  They’ve decided to dip their toes into potentially turbulent waters.

Use What You’ve Already Learned

use what you've learnedWhile Peach State Pride will be making strides in uncharted territory for them, they will leverage the expertise they’ve developed in building the business they already have.  Kari attributes the company success to three principles we’ve heard before on CEO Exclusive: know your customer, have high standards, and be nimble.

These ideas are familiar, maybe even cliché.  The trick is knowing what the company can take for granted with their new customers versus where they need to start over.  What does hometown pride mean outside of Georgia—how does that translate into products and customer experience?  Do they need to take a different approach to product development?  What do customers in other states value?  Not all the credits transfer.  Their success will depend on figuring out which ones do.

Almost all companies have growth imperative.  More money; more money; more money.  But, rapid growth has its limits. And at some point, the size of your market will become a constraint. What comes next is pivotal in the life and sustainability of your company.  For those who aspire to build a 100-year brand, this issue must be addressed effectively.

A few years ago, with careful management, the biggest risk of a failed brand extension was the embarrassment of being cited for utter stupidity.  Now, the pace of change mandates that every company have this ability to extend or shift products, customers, and focus as a survival skill.  So, now that you’ve built a great business in a great niche, what’s next?

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By | 2018-07-12T09:39:29+00:00 May 31st, 2018|0 Comments

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