Red Ocean - Blue Ocean - What Does That Mean in Marketing?

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What do red ocean and blue ocean mean in marketing?

Imagine two scenarios: in one, dozens of providers fight for the same customers, undercut each other on price and engage in a war of attrition. In the other, a company opens up a market in which there is (still) no competition – and sets the rules itself. That is exactly what the concept of red ocean and blue ocean describes.

The terms come from the book Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne (first published in 2005, expanded edition 2015). The two INSEAD professors analysed more than 150 strategic market moves in 30 industries and reached a clear conclusion: sustainable growth comes not from harder competition, but from opening up new market spaces.

Red ocean strategy - the bloody price war

A red ocean is an existing market in which the rules of the game are known. All providers fight for the same customer base. The typical features:

• Price war: when products become interchangeable, price decides. The so-called "race to the bottom" pushes margins into the basement.
• Displacement competition: every market share you win is lost by a competitor – and vice versa.
• Imitation: successful products or services are copied, often within a few months.
• Rising ad costs: the more providers bid on the same keywords and audiences, the more expensive every acquisition becomes.

The image behind it: sharks tearing each other apart in the same waters over the same prey – until the water turns red.

A typical example from Performance Marketing: when ten providers bid on the same Google Ads keyword, click prices rise until the margin barely yields any profit. The market becomes less attractive for everyone involved.

Blue ocean strategy - out of the shark tank

A blue ocean is the opposite: a market space that does not yet exist or is not yet contested. Here you set the rules yourself. Instead of fighting against competitors, you make the competition irrelevant.

Features of a blue ocean:

• New demand: you create a market instead of dividing existing demand.
• Value innovation: simultaneously cut costs and increase customer value – Kim and Mauborgne call this "value innovation".
• No direct competition: you do not compete on price, but on added value.
• Higher margins: without price pressure you can enforce appropriate prices.

Classic examples: Cirque du Soleil combined circus with theatre and created a completely new category. Apple, with the iPhone, made the smartphone market relevant for mainstream consumers in the first place. In both cases the competition simply did not exist initially.

Three ways out of the red ocean - still relevant in 2026

What to do if you are already stuck in the red ocean? There are three proven strategies:

1. Speed as a competitive advantage

You innovate faster than the competition can copy. For every moment in which your new product or feature has not yet been imitated, you skim the market. This works particularly well with a loyal core customer base or a high-quality newsletter list through which you can market new things directly.

The downside: you have to innovate permanently. That is exhausting and expensive.

2. Engage earlier in the customer journey

Most competitors focus on the decision phase – the moment customers are ready to buy. That is exactly where the price war rages.

If, however, you place your marketing in the awareness phase (the customer recognises the problem) or the consideration phase (the customer compares solution paths), you reach potential customers before competition even plays a role. Whoever helps a customer first also gets the order later – not the cheapest, but the most trustworthy.

In concrete terms that means: helpful blog articles answering real questions. Guides giving orientation. Content that proves competence without pushy selling. That is how strategic marketing works in 2026.

3. Positioning and differentiation

Not every company can create a completely new market. But almost every one can position itself more clearly. Ask yourself:

• Which specific problem do you solve better than anyone else?
• For which niche are you the first choice?
• What can you leave out that others take for granted?

For this, Kim and Mauborgne recommend the so-called four-actions framework: eliminate, reduce, raise, create. Which factors of your industry can you cut? Which lower below standard? Which raise above? And which introduce as completely new?

Red ocean vs. blue ocean: what does that mean for your marketing?

The strategy has direct effects on your marketing decisions:

Aspect	Red ocean	Blue ocean
Focus	Capture existing demand	Create new demand
Competition	Beat competitors	Make competition irrelevant
Pricing strategy	Price war, low margins	Value-based prices, high margins
Marketing focus	Decision phase, conversion	Awareness & consideration
Content strategy	Product comparisons, discounts	Thought leadership, problem solving
Customer relationship	Transactional	Trust-based

According to an analysis by the INSEAD Blue Ocean Strategy Institute, companies pursuing blue ocean strategies have significantly higher profitability than those in contested markets – with simultaneously lower marketing costs per new customer.

Conclusion: out of the red water

Red and blue ocean are not abstract theories – they describe the reality in which every company moves. The question is not whether you are in a red ocean (most are), but how you respond to it.

The most effective lever for most companies in the DACH region: place your marketing earlier in the customer journey. Build trust before the price war begins. And position yourself so clearly that customers do not even want to compare.

If you want to know where your company stands in the red-ocean / blue-ocean logic and how to align your marketing strategy accordingly, talk to an expert about it.

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Frequently asked questions on red ocean and blue ocean

What is the red ocean strategy?

The red ocean strategy describes competition in an existing, contested market. Companies fight for the same customers, undercut each other on price and try to win market share from competitors. The term comes from the book Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne.

What is the blue ocean strategy?

The blue ocean strategy aims to open up new, uncontested market spaces instead of competing in existing markets. Companies create new demand through value innovation and make the competition irrelevant.

How do you get out of a red ocean?

There are three ways: first, innovate faster than the competition can copy. Second, place your marketing earlier in the customer journey – in the awareness or consideration phase instead of in the price war of the decision phase. Third, stand out from the competition through clear positioning and differentiation.

What role does the customer journey play in the blue ocean strategy?

The customer journey is a central lever: while competitors focus on the buying decision (decision phase), you can already address potential customers in the problem recognition (awareness) or solution search (consideration). Whoever helps earlier wins the trust – and later the order.

Is the blue ocean strategy also relevant for small companies?

Yes, especially for small companies. You do not need to invent a completely new market – often a clear niche positioning is enough to break free from the price war. Through targeted content strategies and early customer engagement in the customer journey, SMEs can also implement blue ocean principles.

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Sources

1. Kim, W. Chan & Mauborgne, Renée (2015): Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant. Harvard Business Review Press.

2. INSEAD Blue Ocean Strategy Institute (2024): Blue Ocean Strategy - Research & Frameworks. https://www.blueoceanstrategy.com