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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