Exclusivity marketing is becoming a strategy more businesses are adopting. By adopting the strategy to create an environment of exclusivity for their consumers, they create "the modern-day velvet rope" for their VIP clients and customers.
"The most important investment you can make is in yourself" -Warren Buffet
Creating a Unique brand Club
In an age of growing multi-service Tech companies, establishing your brand identity can seem daunting. For example, deciding what products to produce, what products should be staples for your brand, and so on.
However, you don’t need to provide your target customer base with many goods/services. What is necessary is providing your customers with quality. The market does not need another inexpensive producer/retailer or distributor.
The way you go about marketing a clothing brand for example, requires thoughtful strategies and tactics that are not boring or unmemorable. Creating a lasting impact in brand recall is the hack to building a long-term following and fan base for your business.
Consumers want to be a part of a unique club that receives the best value for their dollar. Essential business principles state the more something is scarce, the greater its value. Not only that, but it allows you more opportunities to put more time and energy into developing a product or service.
Start-up companies should consider the benefits of narrowing the product lines or services—the opportunity to concentrate more resources (time & capital) into creating something everyone wants. Although only a few can get rather than, some everyone can have, but no one wants.
Exclusivity Marketing: Pepsi or Coke
Brands act as badges of credibility or declarations of identity. I prefer Pepsi, while my Aunt prefers Coca-cola. Is that because we have different tastes, or could it be a result of marketing from the 90s that declared Pepsi was for a “New Generation”? So, could my choice of Pepsi be less about taste and more of a declaration of my age?
Whatever the case, we often support brands for more than what the immediate utility of said product or service provides. Everyone wants to be unique or special, and one of the ways companies can do this is through the practice of Exclusion. There are many ways to make use of the notion of Exclusivity:
- You can set the price of your product or service high, which acts as a monetary process of elimination and limits access to one’s product or service to those who can afford it or desire it.
- You can limit the number of items or the time a service will be available.
- You can limit your product line to a few items (a clothing company focusing on producing just T-shirts and socks rather than suits, sportswear, and casual wear).
Here are a few companies and brands who have implemented the strategy of Exclusion or Exclusivity and how they do it.
Vista Equity Partners
We'll start with a company whose founder and CEO is the wealthiest black person in America. No, not Ye, not Michael Jordan or Oprah. And it's not Tyler Perry, either. Instead, I'm speaking of Robert F. Smith, whose private equity company invests "exclusively" in enterprise software.
This allows for the firm to go in and purchase companies that have value, regardless of the company's volume, but could use improvements, and they can strengthen and grow the company while maximizing its resources.
Yecosystem
Kanye West/Ye's new 'Brand Community,' the Yecosystem, is based on Exclusivity. In doing so, Kanye wishes to create communities in which goods and services are solely provided by one Brand—inadvertently grouping people based on consumer preferences.
Kanye most likely recognizes the rise in demand to 'belong' or the growing ideological polarization in the 21st century. Not everyone wants to join a street gang or college fraternity, but everyone wants to belong to something.
It is human nature to want to be accepted into social groups, and it's no different in commerce. To be critical or to be a part of an Exclusive group is something most people desire throughout life. So labels and classifications are a natural part of Identity.
While Kanye's Yecosystem may seem a bit occultist, it isn't much different from how diehard sports fans are about their favorite teams or how the town of Herzogenaurach in Germany was staunchly divided for 70 years by the Adidas and Puma rivalry. "There are restaurants and bars only frequented by Puma Employees and others by Adidas Employees."
An effect on what fashion branding became after Yezzys emerged as a premiere clothing and footwear design brand will go down in the history books.
Trader Joes
Much of the grocery chain Trader Joe's success is due to its executive's understanding that giving customers more options doesn't translate to more sales. Barry Schwartz argues in his book "The Paradox of Choice" why less is more and giving consumers more choices can create a state of paralysis rather than satisfaction.
Learning from Tech Giants
Here is something to keep in mind, and that is how the dynamic of Exclusivity will evolve. A prime example is a variety of sectors Tesla is delving into and Amazon with its cloud services. One might imagine that one day consumers will be able to go to one giant corporation for all their tech needs and services.
Even Apple has used the Exclusivity principle by making their products only work with their products & services. A genius move that enabled Apple to compete in a world dominated by Microsoft. Being an iPhone owner is like being a part of a VIP tech club, and I'm sure that's how most customers feel.
Oligopoly Exclusivity Marketing: Apple's Dominance
When people began buying I products from Apple, it created a “Biopoly” or Oligopoly. Once you purchased an iPhone, iPod, etc., you were “All Money In.” You couldn’t simply download music from Limewire or Napster; you had to have iTunes, forcing consumers to return more than once. You either have an iPhone or Android, and being Number 2 in a market or industry dominated by two companies isn’t a bad place to be.
"Specializing too narrowly causes systematic problems and is now considered old-fashioned by top tech companies," Jodi Cook argues. But this is about large companies with lots of capital and people available to carry out a wide array of tasks.
As the great investor Warren Buffet suggests, stay within your competence circle. If you are great at making chocolate chip cookies, no rule says you must sell cupcakes and other pastries to grow your revenue. You can sell more cookies or raise the price without disturbing the reputation you have built for your brand (as millennials say) by 'doing too much.'
Startups and small business owners can benefit from this growing demand for Exclusivity by focusing on providing their consumer base with Quality. In contrast, large-cap companies provide the quantity to the masses.
There is a saying: "don't put all your eggs in one basket." Well, build your basket with Bamboo and not hay. Then, you might save some travel time.
Bibliography
- Circle of Competence: How Warren Buffet Avoids Failures. Abhishek Chakrabrty. Coffeandjunk.com
- Why being a jack of all trades is essential for success. Jodi Cook. Forbes.com 2021
- Rapper Nipsey Hussle and the $100 Mixtape. Natalie Robehmed. Forbes.com 2013
- Kanye West wants to build his own Mini-city called the Yecosystem. Cheynne Roundtree. Rollingstone.com 2022
- Puma and Adidas rivalry has divided a small German town for 70 years- here’s what it looks like now. Hannah Schwar. BusinessInsider.com
Tags: oligopoly market, what is exclusivity in marketing, exclusivity marketing, marketing exclusivity, what is oligopoly in marketing
