The Blue Ocean Theory : How to Create Game-Changing Products in Saturated Markets

Hey there, marketing enthusiasts!

In this edition of The Beanstalk, we're diving into the heart of what makes marketing truly effective: the product!

Without a great product, all the flashy ads and persuasive communication tactics in the world won't keep customers coming back for more.

But here's the catch: creating innovative products isn't easy. Most companies spend years developing new products, and even then, it's often just a minor tweak to an existing line. This leaves consumers feeling unsatisfied and eager to switch to other brands.

And let's not forget the competition. Today's market is more saturated than ever before. For every product out there, there are likely ten clones vying for attention. This situation is only going to get more challenging as time goes on.

In other words, marketers are in a serious dilemma: we want great products, but it's not easy to think of new ideas in this day and age!

Or is it as difficult as it seems?

Cue the Blue Ocean theory—a revolutionary approach to generating product ideas that actually work. This theory encourages you to think outside the box, creating products that stand out in a crowded market.

WHAT IS THE BLUE OCEAN THEORY?

Back in 2005, professors W. Chan Kim and Renée Mauborgne introduced the Blue Ocean theory, a game-changer for marketers looking to carve out new opportunities in their industries. Here’s how it works:

The goal of a Blue Ocean strategy is to discover and develop “blue oceans,” which are untapped, uncontested market spaces with high potential.

In these markets, demand isn’t something you compete for—it’s something you create. This means there’s less competition, lower costs, and massive growth potential. Imagine entering a market where you are the pioneer, setting the standards and defining the rules. It’s a shark-less ocean where safe navigation is possible, at least until other companies enter the same market.

On the flip side, the theory also helps you avoid “red oceans”—oversaturated markets where competition is fierce, and growth is stifled. In a blue ocean market, your brand naturally garners more attention, faces fewer risks, and most importantly, enjoys increased revenue.

Oh, and did I mention that competition becomes irrelevant? It’s like finding a hidden treasure chest where you can claim all the riches without anyone else trying to take them from you.

Take Cirque du Soleil as an example. They didn’t just create a new show; they redefined the entire circus and theatre experience by blending elements of both. The result? A $1 billion annual revenue for the brand. To put that in perspective, all Broadway shows combined bring in about $1.5 billion each year.

This is what happens when you create a blue ocean market—you open up new possibilities and capture a significant share of the market without the intense competition.

Here's the Blue Ocean strategy, broken down into its four main actions:

Step 1: Eliminate

Seriously, take a moment to think about it: Are these features really meeting a genuine need for your customers, or are they just there because it’s always been done this way?

The goal here is straightforward but crucial. Take a close look at your current product features and identify those that no longer serve a functional purpose or add value for your customers. Once you pinpoint these, it’s time to remove them.

Why? Because by cutting out unnecessary features, you’re not just simplifying your product — you’re also reducing production costs. This, in turn, makes your product more competitive in the market.

But how do you actually go about identifying which features to eliminate?

One effective approach is to conduct consumer surveys. These surveys can help you understand what your customers truly want and, more importantly, what they don’t care about. By focusing on what your consumers value, you can make more informed decisions about what to keep and what to remove.

Take Southwest Airlines as a prime example.

In 2019, they discovered through customer feedback that passengers prioritized cheaper flights over in-flight meals. So, they made a bold move — they eliminated meals on their flights, which significantly reduced their costs.

This decision might seem surprising because for the longest time, in-flight meals were considered a staple of air travel. Yet, Southwest dared to challenge the norm and remove them.

The result? They created a more streamlined service that benefited both the company and its passengers for years to come.

Step 2: Reduce

Just like in the first step, we need to clear away the clutter that’s distracting us from focusing on what truly matters in our products. This brings us to the second step: reduce.

Here, it's all about cutting back on features that are over-designed, overcomplicated, or over-engineered.

The main difference between this step and the Eliminate step is that some features identified here may still bring value to consumers, however, they're not worth the trouble in terms of inflated costs to the brand.

Take a close look at your products and identify which features are performing well beyond what's necessary compared to your competitors. Ask yourself: are these over-the-top features really providing significant value to your customers, or are they just inflating your costs?

If you need a great example of a brand that smartly simplified its products, it's Ikea.

Instead of going the conventional furniture brand route of selling products pre-assembled, Ikea reduced their need for manpower assistance by getting customers to DIY.

In one swift move, they not only reduced overall costs for both the customers and themselves, but they also gave customers a unique experience that they just can't find in other furniture shops.

Step 3: Raise

Now that we've streamlined our products by removing and reducing all the unnecessary and overcrowded features, the next step is to focus on adding new features.

But we’re not just adding any features—we’re looking to include those that will significantly enhance the value for our customers.

But how do we figure out which features will add the most value?

There are a couple of effective ways to approach this.

First, you can benchmark your products against the best in the industry. Take a close look at what top-performing companies are doing and identify areas where you can improve or innovate.

Alternatively, you can go straight to the source—your customers. By asking them directly what they value most, you can gain valuable insights into what changes or additions will make your product more appealing.

Let’s consider an example.

Suppose you have a range of sunscreen products. One of the most critical factors for customers would naturally be the level of UV protection your products offer. Once you’ve identified this as a key feature, your goal should be to enhance it beyond the standard that is currently available in the market. If SPF 30 is the industry norm, you could aim to develop sunscreens with an SPF of 50. This improvement would immediately set your product apart from many others, giving you a competitive edge just by enhancing this one feature.

However, it's important to remember that while this step will help you stay competitive within your industry, it alone won't make you truly stand out.

To achieve that, there’s one more crucial step you need to take...

Step 4: Create

Finally, this is where the real magic happens—create something new that your industry hasn’t seen before. This step is all about introducing features that completely differentiate your product from the rest.

This is where the real transformation begins. It’s about introducing innovative features that haven’t been seen in your industry before.

But how do you come up with these groundbreaking features?

The answer lies in a simple yet powerful process called customer mapping.

Customer mapping involves carefully outlining every step of the customer journey. This starts from the moment they recognize a problem they need to solve, continues through their search for a reliable solution, and even extends to how they experience and review the product after purchase.

Imagine it as a detailed roadmap of your customer’s experience.

It can look something like this:

The more meticulous you are in mapping out this journey, the more opportunities you uncover for your brand to differentiate itself from the competition. Every little detail can inspire a new feature that sets your product apart.

Take Uber, for example.

Uber's founders used customer mapping to identify a major pain point: people were frustrated by how long it took to hail a cab.

For years, taxi services assumed customers were content with waiting as long as they were paying a reasonable fare. But Uber saw an opportunity to change that.

They revolutionized the industry by offering a faster, more convenient way to get a ride—and the rest is history.

CONCLUSION

New product ideas don't always emerge from sudden 'Eureka' moments. To rise above the competition, the best strategy is to become a pioneer in an uncharted market, unlocking unique growth opportunities. This may sound easier than it is, but it’s essential if you want to create the next big thing.

By following these four steps, you can significantly increase your chances of discovering a blue ocean market—a space where competition is minimal and the potential for success is high.

To do this, think about unexplored areas where you can create value and growth. Consider what your brand does well, what your competitors are doing or not doing, the benefits and offerings you compete on, and most importantly, what unique value you can provide to your customers that no one else can.

So, take a moment to reflect: Is your brand currently navigating in a blue ocean, where competition is scarce, or are you in a red ocean, crowded with rivals?

FREE RESOURCE

If you're ready to start customer mapping today, here's a simple and easy-to-use template to get you started.

It’s designed to simplify the process, helping you understand your customers better and tailor your strategies to meet their needs.