The Paradox Of Continuous Product Improvement

It’s been six years since the introduction of the first generation iPhone in the Summer of 2007. Looking back that seems like a century ago. Amazingly 9 million people have purchased the latest iPhone version released to the market less than a week ago. Seemingly Apple is following the predictable path and motivation all marketers eventually take toward product evolution.

Marketers simply want to make their products better than the previous version.

This is a pretty straight-forward motivation for all marketers. It’s particularly interesting in Apple’s case because the first iPhone was truly a radical product innovation. Along the way, everything else has been an augmentation to the original. The iPhone is now ubiquitous.

For Apple (and other brands too) incremental improvements are all that is left to do after the big innovation has been established. The smart phone category is now a slush pile of brands, features and applications. Apple now struggles to maintain is premium price positioning.

The genius of most marketers lies in their ability to continue to create product augmentations to known products. To the extent that a product is essentially a set of “benefits”, product marketers constantly seek to improve the product by adding or augmenting more features and benefits to an existing product, or they are multiplying or extending specialized versions of the original innovation to meet hyper segmented sets of consumers with specialized needs.

This happens in every product category from airlines to dog food. Whether by addition or multiplication, the value proposition of most products just keeps expanding getting bigger and bigger as time rolls on.

For brand consultants like me who spend all their time trying to uncover relevant differentiation among competitors in a category, product improvements– either by addition of new features and benefits, or through multiplying product extensions–can seem like fastest route to sameness and commoditization.

Seemingly the bigger the value proposition becomes within the category, the easier it is for customers to become indifferent to the alternatives available.

This is a vicious cycle (or dare I say trap) many marketers easily fall into. According to Harvard Business School Professor Youngme Moon, in her book Different: Escaping the Competitive Herd, the process goes something like this:

• a brand adds to its value proposition by offering a new benefit to customers
• customers are pleased (like the 9 million people who bought the new iPhone)
• competitors match or imitate the new proposition
• the new value becomes a standard across the category
• customer satisfaction is then re-calibrated where they feel entitled to have at a cheaper price what they were previously grateful for at a premium price
• The value proposition has expanded increasing the table stakes and cost of entry for all brands competing in the category
• Rinse and repeat

Marketers have attained genius level competency in this race to the middle. The relentless, incremental product improvement discipline has become the essential modern product-marketing competency!

Once consumers realized that all airlines offer frequent flyer programs, they had less reason to care about what brand they remained loyal to. This is a form of marketing mitosis–constant splitting and multiplying features, benefits and extensions. The more things change the less differentiated things become.

At the end of the day, marketers fall victim to the paradox of their own competency – artfully and skillfully packaging and re-purposing meaningless product distinctions as product differentiation. You know you’re in a mature category when customers say, “I think I’ll wait till next year when the new version comes out”.

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