Positioning MediaMarkt: WOW or a copy of CoolBlue?

Oh, and they made a commercial for the launch. That’s the summary of the press release so far. What do we think of this positioning?

Positioning MediaMarkt copies everything

In short, it seems that MediaMarkt thought; better well copied than poorly designed. Because everything seems to be copied from CoolBlue or another successful customer-oriented organization. MediaMarkt calls it a new brand positioning, but the brand is going head-to-head with CoolBlue one-on-one. That’s not really “new”, is it?

Positioning CoolBlue

CoolBlue’s “everything for a smile” has been (partly) responsible for the success of the Rotterdam-based webshop for years. CoolBlue has had its customer service at the center of its business for years and used to say literally, “You pay a little more for the very best service with us.” Over the past years, revenue has been growing in leaps and bounds and the blue boxes, trucks, and even invoices with funny texts are probably familiar to everyone. The company now has several stores and seems unstoppable. CoolBlue’s positioning is certainly an important factor in this success.

And it seems that MediaMarkt also wants to benefit from this success.

By the way, the commercial with which the company opens the campaign looks a lot like the hilarious Dollar Shave Club commercial from about six years ago. Another success story, the club was sold for a billion dollars to giant Proctor & Gamble. But you don’t have to take our word for it, see for yourself:

https://youtu.be/Ilk_KPHMJjQ

Inspired or simply copied? In our opinion, the latter, both in terms of positioning and the commercial. But that’s just the lack of originality. Objectively speaking – as objective as we can be as an outsider – is it a good move?

Merk and positioning of MediaMarkt in strategic perspective

The textbook result of a competitive strategy based on price is simple: a race to the bottom. If the products are the same, price reduction for many companies is the only way to increase market share. The various market players keep lowering their prices until no one can earn a living anymore.

MediaMarkt was already very good at this when it came, and has undoubtedly become even better at it over the years. With the huge German market already within reach, it was child’s play at the time to challenge the Dutch market. MediaMarkt managed to put several white and brown goods stores out of business, and thus rapidly gained market share. That devastation is probably complete after the recent bankruptcies of Dixons and Kijkshop, I would only mention BCC spontaneously myself. A Google search adds Expert to that.

MediaMarkt in competitive matrix

If we were to place the current market in a competitive matrix, it would look like this:

The vast majority of the market is traditionally/conservatively oriented and mainly product-focused. Since products are interchangeable (commodities), they compete, just like MediaMarkt, primarily on price. CoolBlue is progressive and focuses entirely on service. The big blue competitor (with the orange logo) has successfully positioned itself and is reaping the benefits.

Another factor in the traditional market is location, and if I were to hazard a guess, I would say that this is the only reason there is still traditional competition for MediaMarkt outside of local niche players such as audio and TV specialists, computer specialty stores, and the like.

Repositioning MediaMarkt: necessary or hopeless?

Firstly, there is the way in which MediaMarkt talks about its new brand positioning. The CEO asserts that personal contact through both physical stores and online is what sets them apart, but this is utter nonsense when you take even a second to look at CoolBlue. The story from MediaMarkt’s Chief Digital Officer is no better, as he proudly talks about how they are no longer selling laptops but a worry-free first day of school. Nice slogans, but not new and certainly not distinctive, an Apple store does that better on every front.

“From a shouting brand to a listening brand,” they proclaim, but these clichés seem to contradict that statement. So, is it all marketing talk to sell a “must-have” product? We think so. The company has realized that its strategy has provided name recognition but not sustainable differentiating power due to declining margins and/or sales. And what always seems to be the easiest solution? Doing what the market leader is doing.

MediaMarkt: Follow the leader

Reality of MediaMarkt’s positioning (speculation)

MediaMarkt and advisor J. Walter Thompson had a tough challenge on their hands. Market share, profits or something similar was under pressure and the parent company demanded (we think) action, so what do you do? The senior employees of MediaMarkt Netherlands were probably not hired because they were such customer-oriented thinkers, they were good at working with margins and procurement volume. So they hire an advisor, but at the same time, they look at CoolBlue.

The advisor gets to work but quickly realizes that the course has already been set: we want what CoolBlue has. They go through their undoubtedly strong process, but because everything is constantly compared to CoolBlue, creativity is impossible: everything is reactive. It’s not surprising that even the commercial is a well-produced but copied piece of homework. Too bad, but they probably thought they’d be “crying all the way to the bank.”

But the reality is that MediaMarkt is a huge company, with large stores in prime locations and high brand awareness. Is the company going under? No. The company could win the battle with CoolBlue numerically, but we don’t believe that the established culture will allow for victory without much more drastic measures. For illustration: would a customer-oriented delivery person apply to MediaMarkt or CoolBlue? I suspect CoolBlue. And if you think there are enough customer-oriented delivery people for two companies, you should rethink that. You haven’t even looked at PostNL’s delivery people yet!

In short, we think MediaMarkt’s new positioning is mostly superficial and won’t bring the success they hope for. Was an alternative possible? KesselKramer’s brilliant positioning of the Hans Brinker Hotel as the “worst” hotel in the world was a great success…