There is a small town in the southwest about 70 miles from a major city. Almost everyone in the town has been to the big city at one time or another and sampled the hot dogs from the many carts there.

The people developed a taste for hot dogs.

But there were no hot dog carts in their small town, and 70 miles is too far to drive for lunch.

Then one day a local guy recognizes the opportunity, buys a beat up old used cart, and starts slingin’ dogs at the local courthouse square. He has the only hot dog cart in a town full of hot dog craving people.

He serves an average pork/turkey blend hot dog with the basics – ketchup, mustard, relish, onion. He has a sign that says “Hot Dogs 4 Sale” written in black marker on a piece of cardboard.

Nothing special but he’s the only game in town.

Who wins?

The guy with the only hot dog cart, of course. It allows him to take advantage of the unmet demand, and since he’s the only one, he can charge whatever he likes. People will either buy from him or go without.

He’s slammed with customers every day. He’s having a blast.

But then a second hot dog cart comes to the town. And soon after that, one more. There are now three people slingin’ dogs in the town.

Now who wins?

Certainly not the guy with the first cart. He now has competitors and very quickly find himself in a price war with the newcomers. Not so much fun anymore.

A month later, a fourth cart owner shows up in town.

She sells a premium all beef hot dog from a sparkling clean cart with a tiki theme. She has a grass umbrella. She wears a Hawaiian shirt and a lei and always has a fresh flower in her hair. She plays island music and her signage is professionally made.

Before she opened for business, she invested in a custom logo from a professional graphic designer so as to make a great first impression – and to establish her brand in the minds of the townspeople from day one.

Her logo is on all her menus, fliers, and marketing materials.

She interacts with her customers, asking them what products they would like to see on the cart. She makes them feel special by stocking the unique condiments that they occasionally request.

She also volunteers to sell hot dogs at a fund raiser organized by the local Parent Teacher Organization to buy new computers for the grade school.

She donates all her profits for the day, and the event establishes her reputation as a caring member of the community, which goes a long way in the small town. The fund raiser also gives her exposure to people who would never have seen her otherwise and she hands out over 100 fliers advertising her private party catering service.

She quickly earns a reputation as “THE BEST HOT DOG CART IN TOWN”. The local paper says so in an article that they wrote – in response to a press release that she sent them.

In short, she becomes a master of product differentiation, marketing, and lead generation. She treats her customers better than the competition, and her refusal to act like a faceless factory allows her to charge 50 percent more than the competition.

Now who wins?

And who are you?

-Steve