Mastering Brand Differentiation in the Competitive Entertainment Business
In the dynamic world of location-based entertainment (LBE), competition is rapidly heating up. As an operator, distributor, or supplier in this field, you are likely facing an increasingly tough battle to maintain your pricing and margins. In such a competitive marketplace, how can businesses stand out? A key lesson can be learned from Mike Cessario, co-founder and CEO of Liquid Death, a company that has witnessed extraordinary growth by mastering the art of branding.
It’s Getting Hot in Here
Liquid Death’s journey is nothing short of remarkable. From generating $50 million in 2021, their revenues soared to $130 million in 2022, with expectations to double this figure in 2023. This success story becomes even more intriguing when you consider their product: expensively priced canned water. Their valuation hitting $700 million in a recent funding round in October is a testament to their branding prowess.
Know Your Customer
The secret to Liquid Death’s success lies in their approach to understanding and catering to their core customer. They entered the overcrowded bottled water market and made a significant impact by not trying to appeal to everyone. Instead, they focused on a specific demographic, crafting a bold and aggressive brand identity that resonated deeply with their target audience.
This strategy highlights a crucial gap in the LBE sector, particularly in the realms of arcades and family entertainment centers. These venues often feature similar games and attractions, lacking distinctive branding. Liquid Death’s strategy underlines the importance of investing in a strong brand, especially when the product offerings are as ubiquitous as water.
Case Study: FunLab’s Brand Diversification
A shining example in the LBE space is FunLab in Australia. They have excelled in brand building by creating multiple brands that appeal to different customer personas. Their investment in evolving these brands has been substantial but fruitful. The creation of specific brands for each type of activity, such as Strike for bowlers and Archie Brothers for the carnival crowd, has proven to be a successful strategy.
Go Narrow
FunLab’s approach of segmenting their offerings, rather than trying to be a one-stop-shop for all entertainment needs, has paid off. Their acquisition by TPG for $250 million in 2020 for 40 locations is a clear indication of their success in market segmentation and product/market fit.
The Common Challenge
However, many in the FEC or arcade business might find themselves in a predicament. With similar games and attractions across different venues, differentiation becomes a significant challenge. Even unique aspects like specialized prizes or high-quality food offerings may not be enough to stand out in a market saturated with similar offerings.
Upcoming Masterclass for Differentiation Strategies
To address these challenges, I will be holding a free Go-to-Market Strategy Masterclass on January 9th. This session is designed to provide valuable insights for suppliers and business owners on differentiating their offerings. Participants will learn to research competition, identify core competencies, segment the market, craft unique messages, and uncover distribution opportunities to scale their businesses profitably.
In the competitive landscape of location-based entertainment, standing out requires more than just offering a variety of attractions. It demands a deep understanding of your audience, a clear and resonant brand message, and a willingness to focus on your unique strengths. The journey of Liquid Death and the strategies employed by FunLab offer compelling examples of successful brand differentiation. By attending the upcoming masterclass, you can gain valuable insights and strategies to help your business not just survive, but thrive in this challenging market. Remember, in a world where differentiation is key, your brand’s story and identity can be your most powerful asset.