Blue Ocean Strategy: Third-Tier Noncustomers

Continuing in our series on reaching beyond existing demand, our focus shifts to Third-Tier Noncustomers. Once featured, each entry is then accessible through the Blue Ocean Strategy Basics section of this site.  For an overview of Third-Tier Noncustomers, we turn to pages 109 — 110 of the book Blue Ocean Strategy (co-authored by Professors W. Chan Kim and Renée Mauborgne):

The third tier of noncustomers is the farthest away from an industry’s existing customers. Typically, these unexplored noncustomers have not been targeted or thought of as potential customers by any player in the industry. That’s because their needs and the business opportunities associated with them have somehow always been assumed to belong to other markets.

It would drive many companies crazy to know how many third-tier noncustomers they are forfeiting. Just think of the long-held assumption that tooth whitening was a service provided exclusively by dentists and not by oral care consumer-product companies. Consequently, oral care companies, until recently, never looked at the needs of these noncustomers. When they did, they found an ocean of latent demand waiting to be tapped; they also found that they had the capability to deliver safe, high quality, low-cost tooth whitening solutions, and the market exploded.

This potential applies to most industries.

[Image via James Gordon.]