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IT’S HARD TO BE A CONSUMER...
• Everything is becoming more and more alike• Conflicting claims litter the market• Pushing tiny points of difference• Competition is clouding our minds• And choice is spreading
PICK ME
WHY IS CHOICE SO HARD?
• How do you determine what is best for you?
Especially if you haven’t tried it before?
- Your own experience
- WOM recommendation
- Impulse or gut feel
- Price
- Product/Service attribute
THE IMPORTANCE OF BEING DIFFERENT• Choosing is always based on differences• These can be implicit or explicit• These can be emotional or logical• They give the consumer a reason to choose you
• Remember, a decision must still be made
So you need to differentiate yourself from others
THE IMPORTANCE OF BEING DIFFERENT
• How can I stand out from my competitors?• What is different about me?• What can I offer they cannot?• Nothing is a commodity
Ask yourself...
DIFFERENTIATING COMMODITIES
1. Identify - Chiquita Bananas, Intel
2. Personify - Michael Hill, Mike Pero
3. New generic - Xerox, Lilo
4. Change the name - Chinese Gooseberry
5. Reposition the category - Red Meat, Bank Direct
“STANDARD” DIFFERENTIATING IDEAS
• Quality
• Customer Service
• Creativity
• Price
• Breadth of Range
All look appealing, but they will rarely differentiate you.
WHAT ABOUT QUALITY?
• 1990 was the war on quality• TQM and others were the catch cry• Everybody got serious about quality• Today quality improvements are everywhere
The Bottom Line:
Quality is now a given, not a difference
WHAT ABOUT SERVICE?
• Most companies are geared up for good service• But consumers are never satisfied• They always demand more• And they compare us across industries!
The Bottom Line:
Excellent service just keeps you in the game - it’s a necessity not a difference
WHAT ABOUT CREATIVITY?
• We’ve become very creative• Consumers find it hard to tell what we are selling• Consumers base their decisions on information• But they need it from their perspective
The Bottom Line:
Don’t bury your information in puffery and vagueness
WHAT ABOUT PRICE?
• Price is often the main enemy• Being price driven actually undermines
perception of being unique• Price only works if you can maintain it over time
The Bottom Line:
If you live by price, you can die by price
COMBATING PRICE ATTACKS
• Do something special - Telecom $10 text
• Cause confusion - Telecom/Power Co’s
• Shift the argument - Price vs longevity
• Run a promotion - short term obscuring
PRE-SALE
SALE
WHAT ABOUT BREADTH OF RANGE?
• Can be cost prohibitive for SME’s• Too big is now becoming a problem• Cannot stop your competitor using the same
strategy• Especially on-line!
The Bottom Line:
B of R is nowhere near as strong as leadership, preference or product difference
DIFFERENTIATION TAKES PLACE IN THE MIND
• Minds cannot cope; we’re on overload
• Minds are unlimited; perceptions are selective
• Minds hate confusion; simplicity rules
• Minds are insecure; we follow each other
• Minds don’t change; often futile trying
• Minds can lose focus; we don’t move with you
IT ALL STARTS WITH LOGIC
• Step 1: Make sense in the context
- Arguments are never made in a vacuum
- You message has to make sense in your
category (including your competitors arguments)
- What perceptions do the consumers have
- Is your timing right
IT ALL STARTS WITH LOGIC
• Step 2: Find the differentiating idea
- What separates you from your competitors
- Remember, it doesn’t have to be product or
service related
- Use the difference to set up a benefit for your
customer
IT ALL STARTS WITH LOGIC
• Step 3: Have the credentials
- You must be able to support your differentiating
idea, making it real and believable
- No smoke and mirrors, the consumers are a
skeptical bunch
- You are in the Court of Public Opinion!
IT ALL STARTS WITH LOGIC
• Step 4: Communicate your difference
- Don’t keep it to your self, tell people!
- Better perception wins, not better products
- Give people something to latch onto, to believe in, to run
with
- NZ has a real problem with this!
**SEE MarketBOOST Step Number 2 - Incorporation
STEPS TO DIFFERENTIATION
•Being first
•Attribute ownership
•Leadership
•Heritage
•Market specialty
•Preference
•How a product is made
•Being the latest
•Hotness
BEING FIRST IS GOOD
• Being first provides tremendous advantage• First normally stays first• Can be used to create generic advantage• First is normally based on a great idea• There are many different types of ‘First’• But, sometimes….
EXAMPLES OF BEING ‘FIRST’
• Healthy First• First in the Category• Do Good First• Borrowed First
Being “First” often means just finding an idea and launching it in NZ
Being “First” often means just finding an idea and launching it in NZ
ATTRIBUTE OWNERSHIP IS GOOD
• Attribute is a characteristic, peculiarity or distinctive feature
• Become known for that attribute• Cannot be the same as competitors• Focus is the key to success
ATTRIBUTES OF CARS
BMW Driving
Volvo Safety
Mercedes Engineering
Jaguar Styling
Toyota/Honda Reliability
Ferrari Speed
Holden ????????
LEADERSHIP IS GOOD
• Most powerful way to differentiate yourself• Tell us and we believe you!• Can provide ownership of a category• Leadership is a platform• And don’t be afraid to brag!
FORMS OF LEADERSHIP
• Sales Leadership
• Technology Leadership
• Performance Leadership
• Knowledge Leadership
• Community Leadership
HERITAGE IS A WINNER
• Has the power to make your product or service standout from the competition
• Consumers normally feel secure with longevity
• You can bring your heritage forward
• Or, turn back to your heritage
• Excellent competitive weapon
MARKET SPECIALTY IS GOOD
• Specialists are perceived as experts
• As a specialist you have powerful weapons
• The ultimate is to become the generic in the category
• But, beware of too many specialists
TRUST ME, I’M AN
EXPERT
PREFERENCE IS A WINNER
• People follow the herd
• The principle of “social proof”
• Reduces the consumers risk factors
• If you’ve got it, flaunt it!
• But make sure your claims
stand up to scrutiny
WHAT ABOUT HOW IT IS MADE
• Consider how the product or service has been put together
• Can be the magic ingredient
• Dramatise the difference
• Are you making it the right way
IS IT THE VERY LATEST?
• Being “new” is a great differentiator
• Psychology is obvious; nobody wants an obsolete product or service
• Re-invent yourself
• Break with the past
IS IT HOT
• When you’re hot everybody knows
• Use “hotness” ideas from outside your category
• Don’t be afraid to boast
• Cannot be “hot” forever, so be prepared
SOME WAYS TO BE “HOT”
• Sales
• Staff
• Knowledge
• Industrial ratings
• Industrial experts
• Public ratings
GROWTH CAN WREAK IT
• Main cause of loss of uniqueness
• Problem No1 - distraction
• Problem No2 - line extensions
• Growth can, of course, occur.
You just to ensure that brands complement rather than compete
IT OFTEN REQUIRES SACRIFICE
• Giving up something can be good for your business
• Stick to your core business
• The more you add the more you risk undermining your basic differentiating idea
• When you chase another target segment, chances are you’ll neglect your existing customers
MAINTAINING YOUR DIFFERENCE
• Remember your difference
• Once contrary, stay contrary
• Be consistent
• Evolve your difference
• Don’t tinker!
• Don’t just sit there
WHO’S IN CHARGE OF DIFFERENTIATION?
• YOU ARE
• Don’t assume other people understand your strategy
• Don’t leave maintaining your differences to “someone else”