Wednesday, December 15, 2010

Food Revolution Market Entry Strategy

It occurred to me that I did not fully address FR’s market entry strategy in my previous post. Traditional wisdom says that when a newcomer attempts to take on a well entrenched incumbent, the newcomer should initially focus their efforts on gaining a strong toehold in a market niche, ideally one that is not well served by the incumbent.

Going by that logic, Jamie should have picked a school district where the parents were already reasonably health conscious, whose kids did not eat at the school cafeteria because the offerings were unhealthy and it would have been preaching to the choir to talk to these parents about the importance of healthy school lunches. This would have been a great slice of the market to go after because:

(a) Barriers to entry would have been lower - he would have enjoyed widespread parental and potentially educator and administration support

(b) Results would have been relatively easy to show (say the percentage of students bringing lunch from home went down from 50% to 10%, it would have been an impressive statistic)

(c) Given the correlation between income and healthy heating habits, these schools would have been located in wealthier neighborhoods where fundraising to support his goal would have been easier

However, Jamie went after the “fattest city” in the “fattest country” in the world - Huntington in West Virginia in the US - irking many people right off the bat with that characterization. I speculate he may have chosen this market entry strategy for a couple of reasons:

(a) Forgive my cynicism in listing this as #1, but the drama makes for good TV. Think back to the tear-jerker episodes where he interviews the overweight families and takes them to the doctor who tells them their daughter will die before the parents if she doesn’t lose all that extra weight... To be fair though, if a TV show was generating your paycheck, helping you sell more cookbooks and gear, and making you a celebrity while you’re at it, this is a pretty astute and strategically sound decision. People who are not in nearly as bad a situation will see it as if-they-can-do-it-we-can-do-it. Works either way.

(b) If the goal is to make something widely adopted, it’s a much more compelling story with a greater impact if it was applied on the worst possible case, and that case was turned around to produce results. It’s a combination of couple of Cialdini’s principles of persuasion. A greater authority is conferred upon Jamie if he succeeds with the “fattest city” making it much more likely his suggestions will be accepted elsewhere, and people in a similar situation will see it as social validation.

(c) It nips arguments such as “they could do it because they lived in a wealthy school district that was not in a cash crunch” type of arguments in the bud.

(d) In some ways, raising money from the administrators of the local hospital is a shrewd move in that it forces the more educated, health conscious section of the Huntington community to commit to effecting a change in their community. It also enhances their public image in the minds of those who view the hospital as benefiting financially from the poor health of those living in the community.

Overall, I can see why FR adopted the latter strategy when theory says the former might be the way to go. Goes to show that theory and practice are not always congruent, but there’s a good reason behind it in this case at least!

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