Differentiation, Positioning, and Innovation

Do you know the company that makes ‘long lasting’ alkaline batteries? Can you tell me the toothbrush company who are the ‘dental professionals’ and came out with the first indicator toothbrush? Could you recollect the ‘shockproof’ electrical appliances brand? Call it Duracell, Oral-B and Havells.  That’s the power of differentiation.  It is like an orange cap holder in a cricket field –crying out for attention and easily recognized.

There are many brands in alkaline battery industry, many toothbrush companies and quite a few electrical appliances brand.  But the above three brands stand out!  Because, they managed to clearly differentiate their product and offering to the customer.  Now in India, I think there are too many brands in a product category offering the same benefits and communicating the same message, thereby causing too much clutter in the market place.  The me-too products! You can watch for them whenever you shop in malls and retail outlets next time.  It can also be attributed to lack of innovation in product and marketing strategies or just the drive to create innovation in products.

It pays off, when a brand can take just the opposite position to competitors offering.  It can be the easiest route to differentiation.  In the earlier decade, mobile phone companies were positioning their products as small and sleek.  Later, everyone started speaking about large screen mobile phones.  Hotels always spoke about comfort and luxury until Ginger came out with self-service chain of hotels.  I am not saying it works always.  At the worst case, it works when the ultimate benefit of the service/product is unchanged and the frills surrounding it are altered to create an innovation.

Taking an opposite position works only in certain situations.  We cannot think of largest computer, an odorless soap, or lather less shaving cream at this point of time atleast.  But, a position that is unique and new to the industry is important.  There can be so many product varieties to serve so many likes of thousands of customers.  After all, everyone has different likes.  So, just creating flavors or varieties alone can lead to an enormous amount of differentiation in market.  But, this, ‘variety technique’ is a low hanging fruit of to create differentiation. Imagine, what if someone can really innovate product or offering beyond it!

There are also clear positions created by brands but sometimes do not connect to customers due to redundancy or obvious positioning.  Can you clearly say now, right now, which AC promises clean air, which one speaks about better cooling capacity, which call themselves as AC experts? AC is meant for effective cooling or clean air is as obvious a factor as saying a TV with the best clarity.  It is too generic that it may pass over consumers head and which may lead to not-so-clear positioning.  Other hand, I have not seen anyone, (atleast the prominent ones) claiming to produce the smallest AC or a perfumed AC.  It starts with the idea to innovate that leads to product innovation.

A unique, innovative and distinguished product offering can go a long way in creating a strong brand identity and recall.  Although positioning is unrelated to product, it needs to be backed by the product meeting its promise.  So, a vision to create a differentiated product is a starting point to produce a product that meets the promise.  I hope, atleast hereon, we would not see many brands that does just the reverse.

Bought and Sold

If marketers are all the time thinking how to sell, customers are also spending the time for making purchase decisions . So , how can a marketer influence a customer consciously or sub-consciously? Are all the products in the world being sold by a salesman or is it being bought by customer?

The below ‘BES grid’ plots ‘type of sale’ against ‘value’ and can be used to classify a product into any of the one 6 basic types. This identifies the key challenges specific to each of them so that they can be positioned and addressed appropriately.

A customer can be classified as a ‘bought customer’, when he picks/purchases a product without any salesman’s influence but with his own sense of approach. A customer can be said ‘sold’, when he is actively being pursued by a sales person explaining the benefits. An ‘evaluated buy’ customer is one who evaluates different brand choices before making a conscious decision; a mix of both types.

High Value Low Value	Type 1 Indulgence area (Electronic gadgets like mobile and watches)	Type 5 The ‘Upper grey area’ Large consumer products (home, Loan, white goods, medium segment car)	Type 3 B to B area (Capital goods, auto ancillaries)
	Type 2 Commodity area (Home needs/groceries)	Type 6 The ‘lower grey area’	Type 4 Salesmen area (Credit cards, holiday packages, Insurance)
	Bought	Evaluated Buy	Sold

Challenges for marketers:

For type 1: How to create the ‘indulgence factor’? Recall Merc and Blackberry

For type 2: How to create recall and salience? You can recall Pepsi, Gillete

For type 3: How to communicate value and create confidence? Eg: BHEL

For type 4: How to effectively communicate and sell/pitch? Eg: ICICI

For type 5: How to create recall and how to communicate value?  Think Nano!

For type 6: How to create recall and recreate salience?

Type 1 and 2 involve marketing skills to create brand salience through any of the mediums. Type 3 and 4 involve people skills and are heavily dependent on them. In Type 5 and 6, the ‘reference circle’ plays a powerful medium influencing the decision making.

A product might belong to ‘upper grey area’ when customer wants to evaluate it against different high value products of the same category and allows himself to be ‘sold’ of the product. The same applies to ‘lower grey area’ for a low value product. But here, they generally may be the Type 1 products that seep into this category once they loose their ‘brand salience’.

In all, these 6 boxes could only act as ‘positioning boxes’ in customer mind with respect to the value and type of sale-approach.

Creating Brand-choice Problem

Has there been an instance, during your regular shopping visit to a mall or super market, when you wondered which brand to pick of a product? If yes, then you must not be the lonely one out there. Inspite of heavy pounding of commercials and infomercials from TV, PR stuff from newspapers and attractive billboards, customers still suffer from brand-choice problem and this is a sign of some healthy competition in the product line.

I have tried to segment the brand-choice problem using a scenario model of planned vs. unplanned purchases. To make it clear, a scenario where a customer purchases a planned item can be called a planned purchase. Any other item that he purchases during the same visit, apart from a planned purchase item can be called an unplanned purchase.

	Brand preference	No Brand preference
Planned product purchase	Gold mine (Brand-choice problem exists)	Tissue paper (No Brand-choice problem)
Unplanned product purchase	Oil explorer (Brand-choice problem exists)	Hair comb (No Brand-choice problem)

In a ‘Gold mine’ scenario, there is a clear brand preference for a planned purchase item (normally a value added product). There exists a clear mind-space leader in customer. However, this is a sitting duck for competitors, who are consistently creating a brand-choice problem for the customer. Example: A toilet soap market.

‘Oil explorer’ is a scenario that again shows the presence of a mind-space leader. But, the cost involved here is high for creating a brand preference, as this market generally comprises of indulgence or impulse products that have a long, irregular purchase cycle.  This is high risk and return type of scenario. Example: A high premium chocolate market.

The ’tissue paper’ scenario is a product-driven scenario where the importance of product overwhelms the brand and hence the chances of brand-choice problem are bleak. These are generally low value added or a commodity product. Example: Spices and pulses.

‘Hair comb’ scenario traces tissue paper scenario closely in that the chance of brand-choice problems are bleak. It differs in the reason of purchase. These are generally impulse or indulgence products where the need for product is little less compared to ’tissue paper’ scenario. Example: Hair comb

‘Gold mine’ and ‘oil explorer’ scenarios offer marketers the scope for creating brand-choice problems, since there exists an established brand preference. ‘Tissue paper’ and ‘Hair comb’ scenarios are product-driven scenarios and creating a brand salience in these areas might involve huge investments and lesser ROI.

Where are we? Concluding part

I am still conceiving it. Will be up with it shortly.

Where are we? Volume 5

Volume 5: The five great Revolutions? (AD 1700 – AD 2000)

18^th, 19^th and 20^th centuries are periods of sweeping changes not because they are close to us in history but because it brought about dramatic, fundamental changes to mode of governance and brought paradigm-shift in models of running a state. Year 1776 was known for 13 colonies in North America beginning their fight against the British Empire, in its quest for independence, what is later termed as “American Revolution”. Forty years before this event, the religious ‘great awakening’ occurred which continued in next centuries as great awakening II, III and IV. These were considered as the continuation of Protestant reformation.

It all started in America and the French, meanwhile was hit by a financial crisis due to its involvement in American Revolution and decided to embrace ‘constitutional monarchy’ in 1791 through “French revolution”. Although the constitution did not last long, the king and legislative assembly shared power, which was the first taste of success for things to follow (Democracy). This was later restored in ‘Second republic’ of 1848, which provided universal suffrage and relief from unemployment.

The third revolution, the “Industrial revolution” can be pin pointed as the single most factor that completely changed the lifestyle of European people and in a way redefined the modern society. The extensive mechanization brought about steam engines to machine tools to IC engines. The science and technology were the focal points around which the rapid growth powered during 19^th to 20^th century. One of the reasons cited for such a rapid growth of scientific technology is abolishment of feudalism by British in 17^th century and wide scale availability of resources like coal. Suddenly there were too many different types of industries to employ the entire masses, with each industry supplementing each other’s productivity. This created huge wealth and accumulation of which lead to creation of financial markets. In all, we could say it was capitalism that was in its neonatal stage.

By early 18^th century, trade and commerce flourished great extent between Europe, American, Asian and East Asian countries. The lower overhead costs and huge profits experienced by the British East India Company in India drew many companies to the country. Today’s stock market bubbles were seen as early as 1720 in what is called as “The south sea bubble” crisis. It was also the same century in which NYSE was established.

The Communist Manifesto by Karl Marx and Engels and the revolutions of 1848 brought about a sea change to common mans thinking. “Workers of world unite” resonated well with the worker class who were perturbed with the new age unknown phenomena called industrial revolution, which mechanized all work. There was huge unemployment across Germany and France with widespread starvation among worker class. The natural outcome for all of this was the then set equation of Capitalism = antonym of Communism.

“The Russian revolution” in 1917 echoed Karl Marx’s Communist Manifesto in Russia against the Tsar autocracy. The October revolution finally led to formation of “Union of Soviet Socialistic Republics –USSR”. It was the latest largest victory against a monarchist rule. The First World War gave the death knell for monarchy and establishment of republics across the globe including the German Empire and Austro-Hungarian Empire. The great aspirations for land and market among land-starved European nations caused the gigantic world wars in 20th century, with the treaty of Versailles and League of Nations as their by-product. The political borders were rearranged.

The last and recent revolution

Feudalistic, colonist germs have just been tranquilized in 1947 in the country of masses; India, which has seen the largest shrinkage of GDP over centuries. As they say it, few centuries ago, even before the modern economic concepts evolved, it was a booming economy with a thriving local handicraft industry, thereby making India’s contribution to the world GDP as high as 30%. It was with the advent of colonialism that the handicraft industry and Indian production suffered to the levels of Hindu rate of growth.

India hit a rock bottom in 1942, when the great Bengal Famine occurred and over 30 lakh people starved to death. Shortage of food supplies due to world war and shortfall in grain production were cited the grave reasons. This haunted Indian governance and it proclaimed to reach self sufficiency in food through rapid expansion of farming areas and double cropping. India, with its help from Mexico, maximized production with a high yield during the period between 1967 and 1978, which is popularly termed as “Green revolution of India”. This rapid expansion brought about the advent of new farm-related industries, which further created more jobs and helped in the expansion of GDP.

These five great revolutions brought about path breaking concepts and innovations which defined the course of human life at critical junctures; the concept of democracy with the abolishment of monarchy, feudalism, slave trade; the innovation of a capitalistic state leading to upliftment of social and economic status of people; the concept of communism based on common ownership; the innovation of agricultural methods in sustenance of human life. Although there are many significant events in this time period, these five defined the dynamics of the society

Where are we? Volume 3&4

Volume 3: Why was the early medieval period so dark? (AD 600 – AD 1500)

It was in 1000 AD when the Normans invaded England; feudalism is set to have invaded. Welcome to the dark ages. The age between 13^th to 15^th centuries was a period of lull, with little constructive activities. It also marked the period of feudalism, wherein the ‘Lords’ offered ‘Vassels’ (common man), a ‘fief’ – piece of land, for providing him military support. If we can replace “vassels’ with “peasants” we could arrive at the Indian scenario. The feudalism was so much intertwined with the aggressive religious activities during this period. The emergence of Islam in Arab world (AD 600), the expulsion of Jews from Spain, early stages of Protestants reformation in Europe and rise of Sikhism in India brought about too much concentration on religion and supposedly little economic and cultural development during the dark ages. Finally, only the fall of Constantinople and rise of ‘Renaissance’ brought about the end to the dark ages.

Though it was a period of little economical and cultural activity, it was also the origination period for feudalistic concept and religious dominance. The monarchist rule and the quench for land continued.

Volume 4: Was there a real Renaissance? (AD 1450 – AD 1700)

Leonardo da Vinci, the “Renaissance man”, Michelangelo, William Shakespeare and a host of others brought about a cultural advancement that spread from Italy to rest of Europe. This was the late medieval period, which spanned from late 14^th century to 17^th century. This period saw the emergence of the strong Mughal dynasty founded by Babur in India. Babur’s grandson, Akbar contributed to the cultural development in Middle Eastern part of the world and greatly to Indian music. In the western world, Martin Luther brought about the Protestant reformation (the age of enlightenment) and anguish against Jews. On the scientific side, “father of astronomy”, Galileo and Copernicus brought about scientific revolutions.

To sum up, it was a period of numerous invasions of kingdoms at the fastest pace, thereby large local uprising & civil wars, the continuation of religious discomfort and discovery of new countries & rivers. The cultural uprising and start of political border rearrangement dominated the later medieval period. On Economic development, the emergence and conglomeration of British East India Company to trade commodities between Britain, East Indies, China and India was a significant step towards the oncoming industrial revolution.

Where are we? Volume 2

The different periods of development in GHDM starts with the early days of human development in Indus valley (3000 BC) that started with the invention of wheel and spans across various era’s: the rise and fall of Rome (900 BC – AD 500), the Norman conquest (AD 1000), dark ages of 13^th to 15^th centuries, the Renaissance period of 15 to 17^th centuries, the revolutionary period of 18^th, 19^th and 20^th centuries and the

current state of well established democratic republic capitalistic societies. Now, what has been changing over these years in GHDM map and what has not? Is there something visible towards which the societies have moved? If so, what are we, the self-proclaimed ‘modern society’ tending to move towards? Are these questions hovering in your mind? No? Then, I guess you should proceed to read further.

Volume 2 :What did we achieve in early days? (3000 BC – AD 500)

As long as Man traveled long distances in different directions, in his quench for exploration, radiating from central Africa, there seemed to be little problem. It is when he got into a habit of settling at a favorable location, (along rivers on most occasions) there arose the numerable needs and problems. This was the starting point when Man got himself into a vicious cycle of creating problems and eventually solving them, ending in creating a new problem for the next generation. As he settled down, he required sanitation facilities, which earlier were never a problem. The construction of sanitation facility required bricks and water, which was provided by some other citizens. There were few other groups of people who mastered in pottery and some in metallurgy (copper & bronze). Here arose, what we now call an “economy”. People specialized in different fields and each of them shouldered responsibility for a certain activity, in the interest of the larger society, thereby earning themselves a livelihood. But don’t we need someone who could manage the economy and offer protection to the people? This specialized group of people called chieftains or kings carried the responsibility of governance. Kingdoms were prominent across various places like Babylonia, Assyria, Turkey, Persia and China but not in Indus valley. Anyone who had the capability and the trust of people could be the chief. But soon it had eroded into a monarchist rule. The dynastic rule continued through generations and no common man could be part of the governance. The status-quo continued and consolidated during the supreme period of Julius Caesar during 1000 BC-AD 300 in the west, Qin dynasty in China and Mauryan dynasty in India. The dramatic fall of Roman Empire and Mauryan Empire brought about the end of a glorious era pushing us into the ‘dark ages’ of the medieval period.

Man slowly and carefully built the structure of a society where large diverse people colluded to live together by interweaving economic activities for society’s sustenance and governance for security and ordinance. There was the third type of fabric in the interwoven structure of a society, which played a very prominent role, and ‘telling’ effect on the other two: The Religion. When Man tried to think on the lines of purpose of life in this earth and define it, there emerged different religions. It was about this time, Judaism and Christianity emerged as dominant religions in the west and Hinduism, Buddhism and Jainism emerged in the east. Although religions were a set of beliefs, it came along with many rituals and practices that eventually paved the way for clear demarcations in the society. These were the early seeds of division (of society) sown not by the religious leaders but by the followers. It has an impact for 3000 years and counting!

In total, this was a period man built the mould for forming a society. He settled at a place, supported his living, secured himself from physical threats, built kingdoms, understood a way of living; the religion.