Nice post John! But one has to be careful not to find themselves in the gray "middle of the middle"; consider the debacle of K-mart which was in the "middle of the middle" between Target and Walmart.

Thanks Professor the nice post.

I have some points to share with.

Recession is an opportunity for stock taking!

Like we have weekdays and holidays, businesses do have booming times (hectic weekdays) and recession times (holidays) and hence they cannot be avoided. We can claim to provide 24x7 business/service but surely businesses would prefer to have some stock taking and breathing time. If one were to find peace with this statement, then managing recession will become a child’s play.

Recession times are best times for evaluating business, products and services; markets, processes; people, practices and performances. Well. It is a complete executive master check up for business

It is time for sorting out, systematizing and standardizing. Of course, we may need a bit more of self-discipline.

It is time for making sure that we add value through better communication with the key stakeholders. Only then we can deliver results. Investing in relationships and conducting our business with integrity are only needed in these testing times. Surely our business can gain perspective to prepare itself to handle the best of times to follow recession.

Are we ready?

Hello Professor,
I find your use of Tesco as an example of a successful retailer interesting in the middle market. I am covering the company's US expansion in southern California. The operation seems highly confused. They plop their stores in markets well served by other grocery stores where the communities are primarily composed of "Kraft" families; mom and dad aged 21 to 54 with at least 2+ children under the age of 18 living at home. But they stock their store with pre-packed 2-pack Idaho baking potatos suitable only for empty nester meals. Meat portions in the refrigerator case are small and twice the price of major chains in the same neighborhoods. So this does not seem to fit a "middle" strategy. Tesco here is acting more like 7-11 or AM/PM Convenience Stores meets Smart & Final warehouses. It is a very mixed message and if I don't get it I'm certain others do not. I facilitated US expansion plans for many years at companies such as Procter & Gamble, Kraft, Entenmann's Bakery, Fererro USA and many more. Speaking with Tesco's US store and regional managers they are extremely tight lipped and unwilling to discuss or describe the concept unfolding here.

I see your political wisdom. Question on the business side, I guess you were describing traditional business, what if you're offering Internet-based service for free, how do you beat one way or another of your competitors or at least not letting them eat you alive, with limited resources as well as opportunity cost, what viablie marketing strategy that an entrepreneur needs to sink his teeth into?... Could you touch on that or along that line?

Many thanks.

Interesting viewpoint. Seems like a viable strategy for a firm thats grown beyond its niche or low-cost positioning, or is unable to find a foot-hold in either. For one, you need some of the capabilities of both ends of the spectrum.

Secondly, as you've sort-of pointed out, maintaining a consistent definition of the 'middle' itself is a slippery issue. In fact, it might just be by chance that firms that seem to succeed in the 'middle' do so. Post-facto views of success are not necessarily the result of intended strategy; nor might they be repeatable.

Is there a strong possibilty that in the quest for controlling the middle market, one would be tempted to overpromise and under deliver to the consumers, thereby ending up "being controlled" by the middle market ? Instead of merely trying to appeal to the "middle class values" and mutating our products, services or promises accordingly, one should first genuinely believe in their values and aspirations and then offer innovative and unique products exclusively made for this market. Otherwise, it would just be another case of strangers coming up to you and saying,"Sorry I neglected you for a long time but now I am in trouble and need you to bail me out, so tell me what you want and I will cook up something from yesterday's leftovers for you." No self-respecting customer, middle class or otherwise would fall for such a sales pitch. Or will they ?

Raj Bose
Faculty - University of Phoenix

significantly, business as the name implies is critical crucial in all its area and needs cogent skills and ability to make reasonable returns.......

Hi, I am from Malaysia and is interesting topic to talk about.
Personally I have seen amny of the palm oil related industry with many of them in the 'mid-size' is collapsing.
To borrow what Michael Porter said about the competitive forces is that they are squeezed in between two ends.
On the one side is the globalisation of the industry where the big players with huge amount of capital resources and forbidable marketing outlets are coming in.
On the other side is the 'low-size' family run business that survive on the low cost nuche.
What is key about Camry and the example shown by John Quelch is that each posses the unique selling proposition that makes it work.
The closest example that I can think of the mini-market that spread over the Malaysia is one mid-size companies that survived well. But the key to the sucess is more of the unique position that the customer perceived as.
It can't compete against Tesco and the cheap traditional sundry shops but it is marriage of the two, offering price of the traditional sundry shop and same time comfort of the super market.

I agree with Tay Kein Boon.Its realy difficult to profitably target the middle market in the developing countries as the middle market is very slim since we have two obvious extrems of Premium or low.The middle market is emerging though, but I dont see it been very active in the near future in this part of the globe.Please it would be nice if we can gain insights as to how the middle market can be effectively optinised in the developing/underdevloped countries-John please help!

John, I would argue that in soccer a strong midfield only can make a difference when attack and defense are as good as the opponent's. Strong midfields often make unattractive games!
Taking the analogy to consumer markets: midfield players can do well in unexciting, commodity type markets. Once lifestyle comes into play it's much harder to excel in the middle market. Take the example of British Marks & Spencer's, doing well in commodities like underwear and men's shirts but poorly in ladies fashions. In Holland we have HEMA, being succesfull in basic fashions and hardware with good quality and excellent design. Another example is IKEA, strong in home products with excellent design and reasonable quality appealing to a broad spectrum of lifestyles. To some people even cars are a commodity rather than a specialty!

Dear John Quelch
Your invitations are an eye opener to what I know but cannot ordinarily communicate because of wide sectoral engagements in the business cycle. Once more thanks again.
I like the football analogue used in the pedagogy of the first essay. I perceived a manifestation of the truism in the very foundations of successful entrepreneurship a common vision in the markets for all, whether by a dream or bigger picture in the sky, that wouldn't really matter as the sharpness is the same in the brain. TEAM WORK and effective communication for better attainable results. The markets are segmented largely between Money & Commodities markets.Therefore transpiring businesses with particular attitude over established norms and standards have to leverage the optimistic boundaries of the activity in the sphere of buying or dealing in shares. Particular role players e.g energy companies investing securities and bonds of automakers have duty bound to ascertain clean technology, consumer satisfaction, customer relationship management.... Having hierarchies in the market economies for control and accountability for transfer of resources and technology then middle market men the aspiring owners or large share holders are strategist of corporate finance and personal investing allows decision making ability. Because financial institutionalism and the need for equilibrium exchange rates, advanced countries tend to regard globalisation as means to universalize potential individuals in the international financial economy. Defined and well governed structures in financial institutions, regulatory regimes with low interests rates provide and satisfy the elasticity of supplies and demand. South Africa an excellent example of how motor vehicle sales gained confidence because of Fontainebleau and varicolored ability to meet international standards in the vehicle manufacturing and sales therefore local people with dealerships are making money because of compliance. Adoption of a common policy by auto makers leaves models that have intrinsic value of sameness by standard of course the GM, ROLLS ROYCE, MERCEDES BENZ OR FORD would consider decentralizing and outsourcing their marketing, production to potential geographic zones. Law enforcement agencies, Global leaders, Public officials, Corporates Civil Society organizations and Media houses then provide the services of bulk buying and advertising.

I've never seen a company get so spectacularly out of touch as Starbucks has done.

The fundamental problem they are facing is this:

INSIDE OUT, rather than OUTSIDE IN.

Everything they do is inside out. This article talks about trying to get away from a mass experience and then in the next paragraph talks about things like 'mass segmentation'.

Wake up folks! If you don't want to be mass market then don't act mass market.

The company expanded rapidly by implementing and executing on (very successfully) a formula and system. Then they began to complicate it, based on management's concept of what the customer wanted.

I don't think the people running the show honestly know how the customer FEELS (emotion) and are probably themselves not FEELERS.

How can you speak of an experience in terms of segmentation, spreadsheets, and charts?

The company needs to simplify by focusing on its customers, hiring much better than it does at the front line, educating them in the SIMPLE, EMOTIONAL drivers that are shared by all human beings and providing their staff not with reams and reams of SOPs but a simple emotional playbook for different types of customers.

Either that or mediocrity. I suspect it will be the latter.

Nick