26 Apr 2010  Research & Ideas

When Other Companies Compete Like Crazy, Dare to Be Different

Eye-catching colors and gee-whiz features aren't enough for successful products and services today. To rise above the "sea of sameness," companies need to be different in a way that is elemental—and game-changing. HBS professor Youngme Moon shares highlights and insights from her new book, Different: Escaping the Competitive Herd. Key concepts include:

  • Companies that follow the usual paths to differentiate their products and services often just imitate competitors.
  • Brand loyalty is harder to come by today because consumers see product categories as a blur of too many choices and not enough differences that matter.
  • Different deconstructs and demystifies companies that are adventurous outliers, mavericks, and iconoclasts.

 

Want to be different? Change your world, not your tactics.

As HBS professor Youngme Moon argues in Different: Escaping the Competitive Herd, competition too often breeds conformity. Yet there is plenty of space for adventurous companies keen to break free of the pack.

"In a nutshell, the book is an exploration of what it means for a business to be different, to be meaningfully different, to be different in a way that makes a difference to consumers," she says.

"Differentiation is a way of thinking."

An authority on innovative consumer marketing strategies, Moon has published case studies on companies including Microsoft, Sony, and Intel, and consults with consumer marketing companies in the area of innovation. She also serves on the board of directors of Avid Technology and the board of governors of the American Red Cross.

We asked her how companies can be truly different.

Sarah Jane Gilbert: What led you to write Different?

Youngme Moon: I wrote this book because in business today there is a huge disconnect between the way we talk about the concept of differentiation and the way it actually plays out in the market.

What I mean by this is, in our business schools, we preach the importance of differentiation; in our executive suites, we build our strategies around the concepts of differentiation. But when most consumers leave their homes to purchase something as prosaic as a bottle of shampoo or a carton of juice or a pair of sneakers, they are confronted with a dizzying array of options to choose from, options that are notable, not for their difference, but for their apparent sameness.

And so there is a disconnect between the way companies talk about their products and brands, and the way consumers ultimately experience them.

Q: How does this "disconnect" between marketers and their customers occur?

A: In my research, what I learned was that despite the fact that most companies are deeply committed to the concept of differentiation, at any given moment they are also intensely aware of what their competitors are doing, and it is this competitive vigilance that ultimately pushes them down a path of conformity. They will notice, for example, that competitor A has decided to offer a couple of new features in this market, or that competitor B has raised its prices in that market. And it is these observations that make it very difficult for them to resist the urge to follow suit. Competitive pressure, I argue, breeds conformity.

Q: You discuss consumer devotion to a product or service in your chapter on "category blur." What do you see happening to brand loyalty?

A: There is no question in my mind that, when it comes to many consumer brands and services, overall brand loyalty is on the decline. In the book, I outline a number of reasons for this; one of them has to do with the proliferation of products and services available to us.

Many years ago, I had a boyfriend who considered himself a pretty classy fellow because he only ate Häagen-Dazs ice cream, but the fact of the matter is, it's easy to be a Häagen-Dazs loyalist when Häagen-Dazs is the only major player in the premium ice cream game. When the market is packed with premium clones, Häagen-Dazs loyalists are by definition going to be harder to find. My dad used to swear by Sony televisions; well, I went shopping for a big-screen television recently and I have to tell you, standing before that huge wall of big-screen TVs, it struck me how old-fashioned my dad's fidelity to a single brand would seem today.

"As the number of products within a category multiplies, the differences between them start to become increasingly trivial."

The truth of the matter is, my father never had to choose a credit card affiliation out of a deluge of credit card offers in his mailbox. My mother never had to pledge allegiance to a single brand of yogurt out of a vast and constantly rotating selection of yogurts. In so many consumer categories today, we are confronted with so many choices, so many brands, and so many products—that we often experience the category as a big "blur." In this context, it should not be a surprise that brand loyalty is harder than ever to come by.

Q: What is "hyper-maturity?"

A: It takes a period of time before a category reaches the point that we begin to experience it as a blur. When a product category is nascent, it tends to be dominated by a much smaller set of products, or even a single product. The original PowerBar. The original Walkman. Coke and Pepsi. As the category evolves, however, the number of product alternatives within the category tends to grow exponentially. Today, PowerBar alone produces more than 40 different varieties of its energy bar, and the energy bar category has grown to include more than 60 assorted brands. Today, Sony produces more than two dozen variations of its Walkman, and the personal stereo category consists of hundreds of options. In fact, one quick way to gauge the maturity of a category is to simply track the number of product variants in it.

And yet it would be a mistake to assume that product proliferation creates product diversity. On the contrary, as the number of products within a category multiplies, the differences between them start to become increasingly trivial, almost to the point of preposterousness. Try it. Pick a random product category such as bar soap or running shoes, and make a list of what is different between the products within the category. The list may be long, but an overwhelming number of those differences will almost certainly be trifling.

When a category reaches this stage—the stage at which product differentiation is experienced by most consumers as product sameness, the stage at which the category appears to be filled with what I refer to as "dissimilar clones"—it has reached a stage of hyper-maturity.

Q: Does your book include examples of companies that have broken free from the "sea of sameness?" How did they differentiate themselves to remain competitive?

A: Against this backdrop of overwhelming conformity, it is harder than ever for a business to be a positive deviant. And so, in a nutshell, the book is an exploration of what it means for a business to be different, to be meaningfully different, to be different in a way that makes a difference to consumers.

Along the way, yes, I offer a number of examples. In fact, in the book, I contend that if one were to identify the most compelling business stories of the past two decades, a disproportionate number of these companies, in category after category, achieved their success simply by figuring out a way to be radically and dramatically different from the rest of the crowd. The idea in the book is not only to celebrate these mavericks; it is to deconstruct and demystify what they've accomplished in a manner that makes their achievements understandable and accessible to the rest of us.

Q: How does a company go about making changes when trying to be different? How can marketing managers get started?

A: My answer here is difficult to distill into a sentence or two, so I urge you to turn to the book if you want an in-depth discussion of this. However, I will say this: Differentiation is not a tactic. It's not a flashy advertising campaign; it's not a sparkling new feature set. It's not a laminated frequent-buyer card or a money-back guarantee. Differentiation is a way of thinking. It's a mindset. It's a commitment. A commitment to be different, not in a superficial, I'm-going-to-offer-a-couple-of-features-my-competitor-doesn't-offer kind of way, but in a way that is fundamental and near impossible to replicate.

About the author

Sarah Jane Gilbert is a product manager for Harvard Business School's Knowledge and Library Services.

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