Friday, January 15, 2010

"Purpose" as a source of differentiation as opposed to "promise" (read brand)!

Today customers know more about suppliers than they did in the past. Markets have become more transparent with sharing of information, experience and knowledge amongst customers. All this while the actual difference between products and services is vanishing quickly.

With a huge range of products and services, customers face a classic problem - to borrow the term from Alvin Tofler - its the problem of "over-choice". Its tough, as a customer, to mark out the real difference (if any) between products available. In many industries, mostly, everything can be commiditized and that too very quickly.

Today, to build and sustain 'differentiation' companies have to create variety in actual product or its promises (read brand) or some times both. There are serious problems with both the options. Product variety is adding little to customer satisfaction but adds further complexity to the problem of overchoice. While it might be fun to create promises around your products its relatively tough to make the products deliver on those promises.

With China still going strong its mostly suicidal to get into price based differentiation.

While marketers explore for other factors on which 'differentiation' can be loaded..."purpose" of the company, to produce and reach out to customers with the a particular product, remains hugely untapped and a highly meaningful factor for differentiation. For example, every product of google has a simple undercurrent and users can almost immediately identify with its core purpose - organizing information to provide better search results for you!

Its difficult to take customers for a ride with purpose as a key differentiator - a purpose has to be honest in both - its argument and realization. But it does not take any effort to keep customers with you once they identify with your purpose...

Offcourse many of today's products, as a first step, will find it tough to identify a 'purpose' for themselves in the market... i mean imagine what could be the purpose of feeding someone an areated drink? further, difference between purpose of feeding someone with coca-cola as opposed to pepsi? seems farcical...

While the large established companies continue to experiment with 'promise' as source for differentiation the relatively smaller companies can take on the larger ones on 'purpose'. (If you cant defeat the enemy on the battleground try changing the battleground and you stand a better chance.) Smaller companies or new products in commoditized world can start on a totally different plane by focusing the marketing message on their 'purpose' as opposed to price, product features and promise!

Well, just a thought....what do you say?

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