2.1 Define and Conquer
An early call to war draws 30 million commuters into a daily battle, a clash not for personal space in the HOV lane, but an even more epic confrontation: the battle for the very soul of coffee, waged between Starbucks and Dunkin’ Donuts every morning.
Imagine Dr. Frasier Crane, the effete psychologist from the long-running NBC series Frasier, facing everyone’s favorite donut denizen, Homer Simpson. This fantasy match is not just for the supremacy of scones over donuts-or cappuccino over American drip-it’s a battle for tribal identity. The prize isn’t just market share; it’s the mother lode of influence: cultural currency.
Sure, it’s a currency that neither Homer Simpson nor Frasier Crane will be able to take to the bank, but just like each one of us, both are willing to take their lumps to earn it. Cultural currency is the amount of clout an individual has within his or her tribe, and it’s earned by bringing something of value, typically information or status, into the tribe. Back when tribes wore animal skins and carried spears, a tribe member’s cultural currency was in direct proportion to the size of beast he brought home to the campfire. A great hunter would be rewarded with his choice of women, or a great warrior with land.
Old standards of cultural currency like attractiveness and physical strength still hold huge value, but as Homer Simpson has shown, physical or intellectual prowess isn’t everything. Each tribe defines its own cultural currency, be it speed and agility on the basketball court or a large collection of (otherwise useless) strength points in an online role-playing game.
Corporations have a term for cultural currency. They call it “brand equity.” Companies that hold influence over the tribes they serve carry greater brand equity than companies that don’t. The problem is that companies are often confused, knowing neither which tribes they really serve, nor where the tribes they serve are going. That’s why cultural forecasting has become so very important.
Dunkin’ Donuts misread Starbucks’ early success as a direct threat to their way of doing business, so they began introducing new products. Starbucks did the same, attempting to move in on what Dunkin’ Donuts did best. After a hard-fought but ultimately pointless battle, both companies improved their brand equity and their sales, not by copying their competitor or challenging the competitor’s market share, but by focusing on what their key constituencies wanted. Status-seeking aficionados of authentic coffee love Starbucks. Pretense-loathing, utility-centered coffee drinkers are Dunkin’ Donuts patrons. Both tribes love their morning buzz, but they see coffee, and their relationship to it, differently. The artisanal Starbucks fan sips his cappuccino to define who he is. The utilitarian Dunkin’ Donuts patron drinks his to stay awake and wash back his baked good.
Lest a cup o’ joe seem trivial, know that in ethnographic (marketing research of behavior) studies, Dunkin’ Donuts learned that customers passionate about their brand took great umbrage at Starbucks’ high prices and the implication that coffee can be ordered in over 19,000 different ways. They eschew the priciness and variety at Starbucks, so they order from the straight-shootin’ Dunkin’ Donuts to confirm their worldview. Thus, when Dunkin’ Donuts realized there were as many (if not more) Homer Simpsons than there were Frasier Cranes, they embraced their tribe and their once-threatened business model improved. Now as McDonald’s enters the coffee drinks market, demand for (and consumption of) coffee drinks grows, even as the ability to distinguish them diminishes.
Still, if Frasier wants to order a cappuccino at Dunkin’ Donuts, he can. And if Homer wants an American drip, he can get one at Starbucks. Why? Because tribes cross borders and both Starbucks and Dunkin’ Donuts know that. Sure, Frasier is a dandy-ish, blue-state psychologist, but his red-state, utilitarian father still exerts tremendous influence over him. The tattered old easy chair he planted in the middle of Frasier’s living room is hard to conceal, and you can bet Frasier would prefer his blue-state friends not look in his refrigerator for fear that they’ll find a six pack of his dad’s Hamm’s beer. Likewise, Homer continues to argue with his intellectually superior leftist daughter.