Wholesome Marketing Ideas, Bite Size

Wholesome marketing ideas, bite size

Sunday, July 3, 2011

The "good enough" strategy

The average consumer purchases products and services in thousands of product categories every year.

In each one of these categories there are anywhere from a few to a few hundred alternatives to choose from.

And each of those alternatives is a bundle of features and attributes, some of them quite esoteric or difficult to understand -- do you really know what makes one digital camera better than another (hint: it has very little to do with megapixels)?

To evaluate each alternative in each category for each purchase that the consumer makes is an impossibly time-consuming task. Even if consumers rely on pre-digested and evaluated information from expert and peer reviews, they do not have enough time to read and absorb all of those reviews and decide which alternative is best for them.

There is simply too much information.

So how does the consumer cope?

In three related ways.

First, the consumer cuts through the complexity of a product category by relying on trusted brands or trusted opinion leaders (or knowledgeable friends). Rely on a brand and you're relieved of the burden of understanding what makes one alternative better than the other; why certain features are more important than others; and how to compare brands in the category. A brand acts as a short cut that says “trust me.”

Second, in most product categories consumers simply give up making the best possible choice – instead they make “good-enough” choices. Essentially, they are making a choice to not spend too much time worrying about which brand of kidney beans or paper napkins they buy. Instead, they rely on private label products – they're considered good enough.

Finally, consumers pick categories in which they are highly involved. In these categories they do their research, understand the differences between alternatives, and make highly informed choices. There are between a handful and dozen product categories in which a consumer can be highly involved. Some may choose golf equipment while others may be experts at beer. In these categories they may also be an opinion leader to whom other consumers look for advice.

Now here are the implications that most marketers will draw from this analysis for strategy:
  • You try to make your brand one of the most trusted brands in your product category;
  • You invest in R&D to make your product the best in the category;
  • You obtain expert or trusted endorsement for your brand; 
  • You target opinion leaders and convince them of the superiority of your brand; and 
  • You advertise and invest in differentiation to make your brand stand out, above the noise.
Everyone wants to be Apple.

I don't want to rain on your parade, but in an information saturated environment for most consumers, most of your actions, in most categories, most of the time are simply noise. Your efforts do not even rise above the threshold for the consumer to pay attention. Getting to Apple status is a pipe dream for most brands.

So what's the alternative?

In a noisy market environment where every brand is trying to be the best, it may be wise to recognize that the “good-enough” segment is often the largest, and may well be the most lucrative.

It has paid off for retailer private labels, for Kia and Hyundai, and for Ryan Air. 

But I've never heard a marketer declare "I aspire to be the Hyundai of my product category!" 

Why not?


johnbradley said...

Indeed. It takes a brave marketer to say "I want to be the next Hyundai" whereas any idiot can stand at the front and say, "We want to be the Apple of the paper napkin industry!"

Many marketers forget that the purpose of marketing is to make the company grow faster and be more profitable over the short, medium and long terms than would otherwise be the case. Therefore the task is to identify and execute against the routes that do that, wherever they may lead.

Amir Bhatti said...

Agreed for the "good enough" strategy, but if they include a "promise" - something along the lines of "good enough", that'll differentiate them with the rest of their "good enough" competitors.

Hyundai enjoys current rapport just because they practiced what they promised....