With reference to the Popchips case study, explain the concept of ‘focussed differentiation strategy’ and how it has been effectively applied.
Question 1
With reference to the Popchips case study, explain the concept of ‘focussed differentiation strategy’ and how it has been effectively applied.
The Case
Popchips was founded in 2007 by Keith Belling, a serial entrepreneur, and Pat Turpin, a former Costco snack executive. Their idea was simple: Take advantage of high-income purchasers’ growing desire for tasty, low-fat snacks. Using an innovative cooking method, they found a way to halve the fat content in potato chips while preserving flavour. Popchips has a differentiated product. But its real point of differentiation is its brand and distribution strategy. Most potato chips have mass distribution and a broad buyer base. Belling and Turpin decided from the outset to narrow their distribution and narrow their targeted buyers. They hoped that focusing on a market niche would allow their product to stand out from the bags of Lays and cans of Pringles in aisles all over America. Popchips target upper-income, health-conscious urban and sub-urban consumers. To that end, the firm has signed distribution deals with Whole Foods, Target, and, reflecting Turpin’s roots, Costco. Popchips’ marketing emphasizes social marketing and word-of-mouth recommendations. The company sends out samples to key tastemakers who tweet, blog, or recommend the product in traditional media. Ashton Kutcher, MTV’s former Punk’d host, was so impressed with the chips that he volunteered to promote them. As with Punk’d, Popchips’ advertising is similarly irreverent, with taglines like “love. without the handles.”
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