Capitalize on Healtheir (Greener) Markets

Greg E. Stine
02/04/2005

One of the branding principles I speak about often is that if you are a market leader, you will probably always have a huge advantage over your competition. And if you are NOT a market leader, become one by finding a narrower category of products or services where you can excel – and lead that category.

The opportunity for creating new markets is appearing in various industries and has a common theme: health. As the baby-boom generation ages and begins feeling mortal, health issues will continue to play an ever growing role in many of the products and services sold in this country.

(For more on the underlying branding principle read the article: Branding Truth #2: The First Brand Advantage.)

A smart focus on health by Subway and proponents of Green Building practices and products is changing the landscape of a two major markets.

Subway®
One of the most brilliant marketing campaigns of the past few years has been pulled off by Subway. Prior to 2000, they were minor players in the fast-food market, far behind market leaders like McDonalds, Wendy’s, and Burger King. Even though in 1990 they had over 5,000 locations worldwide, what hope of gaining market share did Subway have competing as simply another fast-food company? Not much without a different and bold strategy.

If you have read or heard me speak on the subject, Subway has since done exactly what they needed to do. They created a more focused (narrower) category and made themselves the market leader – healthy fast food.

I first realized the brilliance of this campaign months after it began (duh). You probably noticed the “Jared” commercials that began airing in 2000. My initial reaction was that they seemed like annoying Weight Watchers ads. Months later that I was in a shopping mall food court with my kids trying to decide what to eat before a movie when our youngest suggested, “Let’s eat at Subway…that’s healthy fast food.”

By refocusing of their branding and running a bunch of dorky commercials, Subway now has McDonalds, Wendy’s, and Burger King chasing them. In the year 2005, the Subway chain entered its 40th year of operation and is the world’s largest submarine sandwich chain with more than 22,000 restaurants in 81 countries.  As a matter of fact, Subway now operates more units in the US and Canada than McDonald’s® does!

By creating this new category and being committed to lead it, Subway has already won. As the market for healthy fast food grows, so will their overall volume.

With a quick review of my nine branding principles, look how well Subway now measures up. Below are Subway’s grades according to these nine branding principles:

1. Focused brands are more powerful than diffused brands. (A)
2. The first brand in a category has a huge advantage. (A+)
3. Keep it simple-one big idea is best. (B+)
4. Don’t neglect PR-it's a great way to build a brand. (They even got Jarred on Jay Leno! - B)
5. Be consistent and patient-building a strong brand takes time. (We’ll see, but they’re off to a great start - B)
6. Avoid sub-brands at all costs-short-term success doesn’t offset weakening strength in the long-term. (No sub-brands here - A)
7. Quality is important, but not as important as the perception of quality. (Again, I think they are doing well here - B+)
8. Somehow, someway, you have to be different. (The Jared campaign made sure this was true - A+)
9. Put your brand definition in writing, otherwise you'll get off course. (?)

Unless they get bored with their branding/marketing campaign or make some major mistakes from the operations side, Subway will be the leader in healthy fast food for some time.

Green Building
Another emerging health trend I see in a completely different industry is the growth of “Green Building” products and practices. Green Building offers homeowners durable, healthy and longer-lasting homes by using green products—which in some cases cost the same as traditional products.  (To learn more about Green Building, visit the website of Build It Green.)

Whether for altruistic or profit motives (or both), many in the supply chain within the construction industry are benefiting from this new emerging market, especially on the West Coast. Manufacturers are creating products that are healthier for the environment, the workers who handle the material, and the people who will eventually live in the home.

A couple of examples of green products are Johns Manville’s formaldehyde-free insulation, a product that doesn’t outgas formaldehyde vapors in the home, and Trex decking, a product made from partially reclaimed wood and plastic. Trex is also healthy for the installers who handle it, the homeowners who walk on it, as well as the environment because it conserves natural resources.

Retailers like Truitt & White in Berkeley are also beginning to notice that Green Building can give them a competitive advantage over retailers offering only traditional building products. This way they distinguish themselves by offering training and education about green products to their builder customers.

Builders too are benefiting by building and promoting green practices. While some building markets haven't caught up with the trend, other markets are going green in a big way. Seattle, Wash., Portland, Ore., the San Francisco Bay Area, Boulder, Colo., and Austin, Texas, are just a few metro areas where green building is erupting as a real market force.

With many of our clients in the residential building industry, I can see that the green building concept will shake up some major markets before long. There are already companies gaining or losing big chunks of market share because their product is or is not a green product.

The green building concept is not well known in most marketplaces as a healthy concept (especially when compared to losing weight or low carbs) and it will be interesting to watch how it evolves over the next few years. Is “Green Building” a simple enough concept that consumers will be able to identify it with healthier homes? I think so. If I’m right, there will be a number of companies that will become market leaders of a very valuable new health-driven market category.

What about your company and industry? How will our aging and increasingly health-conscious population affect what you do?

Is there an emerging, health-focused market just waiting for you to be its leader?

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