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Brand Differentiation

Simply Different: A Brand Advantage

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Simply Different: A Brand Advantage

Simply Better is the title of the marketing book that won the 2005 Berry-AMA Book Prize.

Customers rarely buy a product or service because it offers something unique, say authors Patrick Barwise and Sean Meehan. Consumers want products that are simply better in terms of quality, reliability and value.

Not true. Too many companies focus on trying to make better products when the real advantage is making different products. The current videogame dogfight between Sony, Microsoft and Nintendo illustrates this point.

Both Sony’s PlayStation 3 and Microsoft’s Xbox 360 are the result of a better-product approach. Compared to previous iterations, the new PlayStation and Xbox machines are faster and more powerful.

Nintendo did it differently. The Wii is perhaps one-tenth as powerful as its two rivals, yet its motion-sensitive wireless controller allows you to produce action on the screen by tilting and waving your hand. You don’t just sit on the couch and move your thumbs.

Wii has been winning the battle in the marketplace. In November and December of 2006, Nintendo sold 1,100,000 Wii consoles while Sony sold only 687,000 PS3 machines. Wii has also been winning the battle in the media.

Nintendos Wii, radiating fun, is eclipsing Sony. The New York Times.

. . . we found the more modest Wii to be the more exciting, fun and satisfying of the two new game machines. Walter S. Mossberg, The Wall Street Journal.

My prediction: Nintendos Wii will wind up outselling Xbox 360 and PlayStation 3 combined.

This would not be the first time Nintendo has won big with a different strategy. In 1989, the company introduced Game Boy, the first portable videogame player. Since its introduction, Game Boy has sold more than 70 million units.

In 2005, Sony struck back with the PlayStation Portable, a portable machine with a better approach. With the bigger, more powerful PSP, you could also play movies and music on your game player. The Walkman of the 21st century is how Sony Computers CEO described the new machine at the time.

Nintendo did it differently. Instead of introducing a bigger, more powerful Game Boy, Nintendo introduced the DS, a dual-screen portable videogame player. One screen is a regular LCD and the other screen is a touch-sensitive screen, allowing for a new breed of games.

So far Nintendo DS has sold 100 million units versus 50 million for Sony’s PSP. No surprise to me.

Marketing is a battle of categories. The brand is only a marker for the category itself. If you want an energy drink, you reach for a Red Bull. If you want soy milk, you buy Silk. Rental DVDs by mail? Netflix.

Creating a new category and then branding that category in such a way that your brand is perceived as the innovator and category leader (in both senses of the word) is the essence of marketing today.

To create a new category, however, you have to think different, not better. Pepsi-Cola tastes better than Coca-Cola, but its not different and therefore can never become a market leader.

Ironically, there are some categories where the better product does win. These are categories with few or no brands. Notice, for example, how consumers will take their time to pick and choose the better apple or the better orange in the produce section of a supermarket.

The number of these better-product-wins categories keep declining because these are the best categories to launch new brands. In the supermarket produce section, a new company called Fresh Express introduced the first brand of packaged salad, a typical think-different approach.

Naturally Dole and a number of other produce players jumped into the market with their own brands of packaged salads. So who became the market leader? Fresh Express with a 40 percent share.

Fresh Express was bought by Chiquita Brands for $855 million, a nice stack of greens.

Think different and win.

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7 Comments

Debashish Brahma on September 11th, 2009 said

Excellent Post, I have a point to make with my observations.

It’s a complete Features, Atractiveness, Benefits analysis that’s required in the designing stages and post launching stages, be any product/services FAB is a must.

A=Attractiveness may be replaced by Advantages, value addition enhances the attractiveness,Sony, Microsoft, Apple all new features ,attractiveness, benefits, enhances the Brand Equity=Brand Valuation but the inherent strength of the product has to be there.

Apple CEO Jobs said:”Make Product The King”
Apple is a typical company whose growth has been organic, any product from Apple’s basket has made them unique and this inherent strength and uniqueness has made them market leaders.

Warm Regards,

Debashish

justinbasini on September 11th, 2009 said

I worry about any prescriptions one way or the other. There is undoubtedly a powerful approach to building a brand quickly through differentiation. However I wouldn’t dismiss the simply better approach.

The Simply Better approach definitely requires long term commitment and change/development on a wide range of fronts, but if it can be captured – to be recognised as “simply the best” in any category is a source of long term competitive advantage.

Great blog and thinking. Thanks for sharing.

Justin Basini
http://www.twitter.com/justinbasini

Sam Ho on September 11th, 2009 said

Interesting article, but I don’t think brand innovation is the only driver behind its success-

1) I think the largest driver of success for the Wii is that it attracted new to market consumers ..because of the kinds of games that developers were producing for it. My grandma loves the Wii. It’s the first console she enjoyed playing. She likes cuddly things, not guns and ammo! I prefer more serious games, so I will stick to the Xbox. (I’m male and 28 btw).

2) It’s also important to not forget that a brand new Wii when it was first released was apx. $250 and a PS3 for example was apx. $500 – which is a very large cost differentiation indeed and undoubtedly another driver splitting the market and lending Nintendo some financial success.

Looking forward – with innovation such as Microsoft’s Project Natal http://bit.ly/WfIAr – somewhat leveling the playing field and the likelihood that Microsoft and Sony are going to be the next in line to develop the next generation of consoles and not Nintendo, I don’t think that we can assume that on the basis of innovation – Nintendo’s current valued position right now will be sustained for a long time.

Joy Levin on September 11th, 2009 said

Great point about being different – in other words, creating a unique, sustainable advantage. It would be difficult, if not impossible, for anyone to touch Nintendo, as they have, in effect, created an entirely different category – perhaps “exercise/video gaming”, or “non-couch potato video gaming”. In order to understand and develop products that are truly unique and impact purchase behavior, it is critical to understand which differences will meet the needs of the target and how to position the product correctly to communicate its benefits.

Joel Rubinson on September 13th, 2009 said

I wrote an article in Marketing Research magazine about the ridiculous premise of simply better. I showed virtually no correlation between consumer reports ratings and market share in 4 appliance categories. Make a new promise, deliver on expectations–“better” leads you down a red ocean path every time.

On twitter @joelrubinson

dmartiniano on September 13th, 2009 said

Interesting article!

I think that “different” in this case means adding new features/functions/capabilities to the platform or product that totally change the concept itself (in this case: the way we play videogames). If the new concept is accepted, it changes the paradigm of “linear improvement” in which we are supposed to improve a product by making its features better (better processors, graphic chips, more memory, more buttons for gamepads, etc).
Nintendo changed the paradigm (again) making it possible for grandpas and grandmas to play without the need of Hardcore Gamer’s speed & sync skills.

Cheers,
D.

Paul Daigle on September 21st, 2009 said

Interesting post. I’ve been exploring this topic. I would argue that just thinking differently may not be as important as engaging the will of the marketplace. The Wii is a gravity brand in an electric marketplace. See Gravity vs Electricity.

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