Becoming a Hidden Champion in Niche Marketing

They are brands you don't recognize, yet they have global market shares greater than 50%. This article describes the concept of "Hidden Champions" and gives examples of companies achieving this classification.

 

Kotler and Simon popularized the concept of “Hidden Champions” in Marketing Strategy. These companies are relatively unknown to the public but have global market shares greater than 50%. They are profitable niche players, by focusing on segments whose needs they can best meet.

 

Characteristics of "Hidden Champions"

• Lower brand recognition
• High degree of customer satisfaction
• High customer retention (less emphasis on customer acquisition)
• High profitability

 

Examples of Hidden Champions

Sensata Technologies is a leading supplier of sensors and controls. Few people know about this major company, even though its products impact the automotive, appliance, aircraft, industrial, military, heavy vehicle, heating, air conditioning, data, telecommunications, recreational vehicle and marine industries. In a decade, it has become a billion dollar company with a strong niche.

Kohler is another example of a hidden champion. The company is a midsized company expanding globally. But its focus remains not on being a meandering conglomerate, but a faucet manufacturer focused on consumers first and their desires for attractive and functional faucets. Unlike competitors focused predominately on market share and price competitiveness, Kohler focuses on the consumer (her appetite for design, technology and service) and is noted for its excellence as a result. Many consumers may not even know about Kohler, but plumbers as primary purchasers do because Kohler fulfills their needs.

 

Reasons why this is a winning marketing strategy for some companies:

• Difficulty in building brand name recognition in mature markets
• Inability for companies to serve every market segment
• Focus on continuous innovation, best service and customer value, instead of marketshare and influence
• Top management stays in direct contact with customers
• Potential for customer delight and being closer to the customer than mega-competitors

 

Sources consulted: "Kotler: On Marketing" & "Hidden Champions" by Hermann Simon

This content was provided by SIS International Research. Visit the company website at www.sismarketresearch.com.