Page 249 - ENTREPRENEURSHIP Innovation and entrepreneurship

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242 ENTREPRENEURIAL STRATEGIES

cookies and crackers was moving out of the home and into the facto-
ry. They then studied what commercial bakers needed so that they
could manufacture the product their own customers, grocers and
supermarkets, could in turn sell and the housewife would buy. The
baking ovens were not based on engineering but on market research:
the engineering would have been available to anyone.
The specialty market niche has the same requirements as the spe-
cialty skill niche: systematic analysis of a new trend, industry, or mar-
ket; a specific innovative contribution, if only a “twist” like the one
that converted the traditional letter of credit into the modern travelers
check; and continuous work to improve the product and especially the
service, so that leadership, once obtained, will be retained.
And it has the same limitations. The greatest threat to the special-
ty market position is success. The greatest threat is when the special-
ty market becomes a mass market.
Travelers checks have now become a commodity and highly com-
petitive because travel has become a mass market.
So have perfumes. A French firm, Coty, created the modern per-
fume industry. It realized that World War I had changed the attitude
toward cosmetics. Whereas before the war only “fast women” used
cosmetics—or dared admit to their use—cosmetics had become
accepted and respectable. By the mid-twenties Coty had established
itself in what was almost a monopoly position on both sides of the
Atlantic. Until 1929 the cosmetics market was a “specialty market,”
a market of the upper middle class. But then during the Depression it
exploded into a genuine mass market. It also split into two segments:
a prestige segment, with high prices, specialty distribution, and spe-
cialty packaging; and popular-priced, mass brands sold in every out-
let including the supermarket, the variety store, and the drugstore.
Within a few short years, the specialty market dominated by Coty had
disappeared. But Coty could not make up its mind whether to try to
become one of the mass marketers in cosmetics or one of the luxury
producers. It tried to stay in a market that no longer existed, and has
been drifting ever since.