Positioning MediaMarkt: WOW or copy of CoolBlue?

On November 12, 2018, MediaMarkt Netherlands announced its new positioning: Always looking for the WOW for you. In the press release, the brand shares its insight that selling just a product is not enough; it’s about the total solution. The services and solutions are referred to in the press release, in true English style, as services and solutions and are the new lifeblood of the company. The new brand positioning was developed together with J. Walter Thompson and is, according to them, the biggest change MediaMarkt Netherlands has made so far.

Oh, and they made a commercial for the launch. So much for summarizing the press release. What do we think of this positioning?

MediaMarkt Positioning Copies Away

In short, MediaMarkt seems to have thought; better well stolen than poorly invented. Because literally everything seems 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-to-one. That’s not ‘new’, right?

CoolBlue Positioning

CoolBlue’s “everything for a smile” has been (partly) responsible for the success of the Rotterdam webshop for years. CoolBlue has long put its customer service at the center and used to literally say: “With us, you pay a bit more for the very best service.” In recent years, revenue has grown by leaps and bounds, and the blue boxes, trucks, and even invoices with funny texts are probably known to everyone. The company now has several stores and seems unstoppable. CoolBlue’s positioning is certainly an important factor in this.

And MediaMarkt seems to want to share in that success.

By the way, the commercial the company opens the campaign with is very similar to the hilarious Dollar Shave Club commercial from about 6 years ago. Also a success story, the club sold itself 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 by or simply stolen? As far as we’re concerned, the latter, both regarding the positioning and the commercial. But that’s purely about originality. Objectively speaking – as objectively as we can be as outsiders – is it a good move?

MediaMarkt Brand and Positioning in Strategic Perspective

The textbook result of a competition strategy based on price is simple: a race to the bottom. If the products are the same, lowering prices is the only way for many companies to increase market share. The various market players keep lowering their prices until there is no profit left for anyone.

MediaMarkt was already very good at this when it entered the market and has undoubtedly only gotten better over the years. With the enormous German sales market already secured, 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, partly because of that, rapidly gained market share. That purge is probably complete after the recent bankruptcies of Dixons and Kijkshop; I would only spontaneously name BCC myself. A Google search adds Expert to that list.

MediaMarkt in Competition Matrix

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

The vast majority of the market is traditional/conservative and mainly product-oriented. Because products are interchangeable (commodities), competition, like MediaMarkt, is mainly on price. CoolBlue is progressive and puts everything into service. The big blue competitor (with an orange logo) has positioned itself very successfully and is reaping the benefits.

Another factor in the traditional market is location, and if I shoot from the hip, I would say this is the only reason there is still traditional competition for MediaMarkt outside local niche players such as audio and TV specialists, computer specialty stores, and the like.

MediaMarkt Repositioning: Necessity or Hopeless?

First of all, there is the way MediaMarkt talks about its new brand positioning. The CEO firmly states that personal contact through stores and online is distinctive, but that is outright nonsense if you look at CoolBlue for even a second. MediaMarkt’s Chief Digital’s story is not much better when he proudly says they will no longer sell laptops but a carefree first day at 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 headline, but these open doors seem to contradict that immediately. Is it all marketing babble to sell a ‘must-have’? We think so. The company has realized through declining margins and/or sales that its strategy has brought brand awareness but not sustainable distinctiveness. And what always seems the easiest solution? Do what the market leader does.

MediaMarkt: Follow the Leader

But a ‘me-too strategy’, not to be confused with the hashtag of course, never claims market leadership. First of all, because it doesn’t make it easier to choose your brand but rather harder. MediaMarkt follows CoolBlue. So why wouldn’t I just choose CoolBlue? Secondly, the organization has been price-, market share-, or margin-oriented for years; you can’t just turn that around overnight. No matter how much you invest in internal culture change processes.

MediaMarkt’s new positioning will in practice amount to: Like CoolBlue, but cheaper. And with that, they completely miss the mark.

Reality of MediaMarkt Positioning (Speculation)

MediaMarkt and consultant J. Walter Thompson faced a big challenge. Market share, profit, or something similar is under pressure, and the parent company demands (we think) action, so what do you do? The senior employees of MediaMarkt Netherlands were probably not hired because they are such customer-oriented thinkers; they were good at margins and purchasing volume. So they hire a consultant but at the same time look at CoolBlue.

The consultant gets to work but quickly senses that the course is already set: we want what CoolBlue has. They undoubtedly go through their content-strong process, but because everything is continuously compared to CoolBlue, creativity is impossible: everything is reactive. No wonder even the commercial becomes a well-produced but copied piece of homework. A shame, but ‘crying all the way to the bank’ must have been the thought.

But the reality is also that MediaMarkt is a huge company, with large stores in prime locations and high brand awareness. Will the company go under? No. Numerically, the company could win the battle with CoolBlue, but we don’t believe the established culture allows a victory without much more drastic measures. To illustrate: would a customer-oriented delivery person apply at MediaMarkt or CoolBlue? I suspect CoolBlue. And if you think there are enough customer-oriented delivery people for two companies, you should reconsider. You haven’t even looked at PostNL’s delivery people!

In short, we think MediaMarkt’s new positioning is mainly superficial and will not 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…