Overcoming Perceptual Barriers

Mobility barriers are what stop firms moving from one strategic group to another in an industry. The concept of strategic groups and mobility barriers has acute relevance to firms trying to move into newer product categories or businesses within their own industries. Such strategic moves have to be carefully mapped in terms of opportunities that a firm can capitalise on, and internal competencies it can leverage.

But I believe there's an added perspective to such moves. What about the relevance such moves have from a consumer's perspective? Maybe internal competencies and opportunities that exist justify such moves. But will the consumer be as forthcoming? Would there arise perceptual barriers that put a spanner in the works?

I believe so. Let me demonstrate. In India most car majors entered the market either with small cars or sedan category cars. Over time, they moved to other strategic groups within the industry. The small car players graduated into sedan categories and vice-versa. As I mentioned, the added important consideration here is about consumer perceptions that follow such moves. Do consumers look at the car majors that graduate into sedan categories in better light vis-a-vis the ones that move down from sedans into small cars?

Let me first term the consumer driven barrier that encourages or discourages strategic moves as perceptual barriers. Which of the two moves face greater mindset barriers? I believe the 'small to sedan' move encounters greater perceptual barriers as compared to the 'sedan to small' move. That is, perception wise, consumers are more acceptable of sedan-to-small car category moves. A car major that's entered India with a sedan category car and subsequently moves into the small car category faces greater acceptance among consumers. Even to the extent that consumers may be willing to ascribe a premium on such small cars. For example, Toyota entered India with sedan category cars. It now intends to bring in a small car. I believe Toyota's small car will be awaited and then accepted more wholeheartedly. Not so for a major like Hyundai, which currently is extremely popular in the small car category, but has never found acceptance for its sedans. Consumers in India are unwilling to accept Hyundai as a sedan. However, they will continue to extend their patronage in the small car category.

Perceptual barriers, I believe are as critical as mobility barriers when it comes to strategic moves within an industry. Breaking a perceptual barrier is as important as overcoming mobility barriers. Else, a company may come up with a new product, but acceptance wouldn't necessarily be forthcoming.

Which means products, but no buyers. And the blame's not on products, but on perceptions.


Do customers in a country like India consider Hyundai/Toyota as a brand while making the purchase, or do they consider their cars while making a purchase.

Considering car buying is a high involvement cognitive process, and in all possibility will have a lot of say of the woman in the house(if at all), will the consumers be influenced by the perpetual barriers?

Is there a perpetual barrier at all?
NJ said…
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NJ said…
It is indeed very difficult for brands to break this barrier particularly when there intends to be a brand extension.
For example, Ponds when came up with a toothpaste faced a great dissonance in the minds of customers leading to a failure.
It is often seen that creating an altogether different brand results in better results than otherwise.
For example : VW, Audi, Skoda !!!

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