Being the (second) best

The benefits of employing a “Pepsi” strategy for your small business

Go to most small business seminars, or read any motivational sales book, and there’s one theme that will be consistent – you can grow your small business to be the biggest in your market if you shoot for the stars!

I’m all for aiming high…but what if there was a proven strategy you could use to accelerate your growth and become a strong second choice for your customers in your chosen market. The number 2 coffee shop. The second busiest accountant. The number two web-based SEO consulting firm.

Taking a Different View – The “Alternative” Strategy

There are many examples of famous brand name companies raking in profits by deliberately trying to be the second choice in a given market, using an “alternative” strategy.

Pepsi sells billions of dollars in cola every year, thanks to their strategic decision to stop fighting with Coke over who was number 1 in the cola business. Coke was the original cola with the highest sales in the business. Rather than continue to fight toe to toe with the established leader, Pepsi let Coke have that territory, and turned their focus to cola buyers who didn’t have an established cola preference yet – teenagers.

They changed their marketing strategy to use pop icons like Michael Jackson (hey, it was the 80s), which was a distinct alternative to Coke’s use of Bill Cosby to support its more traditional image.

The result was that Pepsi became everything Coke couldn’t be – a youth-oriented cola with a strong hold on a growing market. In doing so, Pepsi became the top alternative choice to Coke. If you were one of the people who didn’t want a Coke, there was a very clear second choice for you to try – Pepsi.

It happens in all kinds of businesses…

There are plenty of other examples. Burger King is deliberately positioned as the alternative to McDonald’s – they cook their burgers differently, and market their food more to the male young adult segment of the market, instead of to kids and families as McDonald’s does.

It’s also worth noting that it’s not necessary to be the opposite of the market leader in everything to be an alternative. Pepsi is sold in the same stores and usually for the same price as Coke. The “alternative” component of their offer to customers is mainly in their marketing and their target market.


It works in your business too

Who is the number one business in your chosen market? What is it that they offer to the market that has put them on top?

If you want to play the game like Pepsi and other successful “alternative” businesses, then let other businesses compete with the market leader on their turf.  You focus on the huge part of the market that chooses not to deal with the market leader. Be what the leader can’t be. Find the alternative territory where a client demand exists.

There are many factors on which you could base an alternative offer, including:

  • Type of client being targeted
  • Level of service offered
  • Geographic trade area
  • Price point
  • And many others

It’s also a well recognized fact that in most businesses, there’s money in being number 1 and number 2 in any market, and not much money leftover for the rest of the pack.

So if you are one of the pack in your current market, you have a lot to gain by breaking away from the pack and taking up the number 2 position in your market.


Where there’s a leader, there’s an opportunity

As business people, we are often taught that to be as successful as the leader in any market, we should emulate the approach that made them successful.

The reality is that market leading businesses are very good at something, but can’t be good at everything. There may be a great opportunity for competing agents in taking up an alterative position rather them mimicking the leader’s marketing tactics.

Coke’s firm grip on tradition gave them the lead in the cola business, but also left a huge opportunity on the table for Pepsi to lock up number 2 by targeting younger customers.

What opportunities is the market leader in your market leaving on the table for you to lock up?

Will Dylan is a corporate marketing manager and author of “Small Business, Big Marketing”, one of the web’s most popular ebooks on small business marketing. It can be downloaded at no charge from

About Marie

I started Elite Edge at the end of 1999 and I am still as passionate about marketing today as I was then - probably more so because I consider myself very lucky to do a job that I love every day! My area of specialism is strategic planning but like most people these days, I wear many other hats too!
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