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It’s Difficult Being Different

There is an active debate in LinkedIn recently on brand differentiation vs. distinctiveness. I thought I’d see it from a portfolio management perspective – how easy it is for brands to offer truly differentiated products when there are formalised or adopted norms around dictating the product category.

Let’s start with with TV screens.

In my curiosity, I once mulled over why the common aspect ratio for TV and computer monitors is 16:9. Why was 4:3 chosen previously? Is the 16:9 aspect ratio selected because it’s visually the best ratio? (For those of you who are interested in the history, you can read it here). The catalyst for the 16:9 wide adoption is the popularity of high definition broadcast as the most common video aspect ratio in use. There’s actually nothing that would stop a TV manufacturer from making alternative aspect ratios that are arguably superior as a point of differentiation. However, they would probably find it challenging to work around the media content that is formatted for the most common aspect ratio.

Let’s move to mobile phones.

Does anybody remember the quirky phones that Nokia introduced in the early 2000’s? There was Nokia 7600, introduced in 2003, that was shaped like a teardrop. Good luck if you don’t have a good grip on your phone!

Or what about Nokia N-Gage? This was also introduced in 2003. The phone was meant to be a cross-over between a mobile phone and a gaming device. It was ahead of its time. There were also other weird product design innovations that Nokia released around the same time, like Nokia 3650 with a rounded bottom, released in 2002 or Nokia 7280, released in 2005, that adopted the iPod’s spinner. Despite the design winning accolades and awards, you don’t see a wide adoption of the product format 20 years on.

Product categories often come with certain prototypicalities, conventions, or expectations in the eye of the consumers. We have a certain expectations on what a milk carton, a juice bottle, or a toilet roll should look like. Whether companies like it or not, they have to conform their brands to fit these norms and conventions. While there are design variations, companies have to navigate around consumers’ ingrained habits and expectations that are difficult to change. Moreover, they also have to work with partner manufacturers who supply material and items for the product. The reason we can easily reuse a liquid soap pump from a different brand to another bottle of body lotion is because there’s a standard size and groove for bottle closures. A manufacturer can still design something that is different to the prevailing norms, but this will unnecessarily add to the cost and avoidable challenges to market the new product.

Let’s move over to whiskey, for a bit.

During a visit to the Museum of Failure in New York in June this year, I came across an interesting exhibit that was donated by the brand to the museum. In 2021, Red Locks Whiskey wanted to market their good quality whiskey in unusually tall bottles. However, they ran into problems when the bottle was too tall to fit on the standard back bar shelf – hindering product distribution. Ultimately, they had to follow the adopted norms and conventions with a more regular-shaped bottle.

Manufacturers can certainly be creative with their products to differentiate themselves – either through packaging or in the content itself – but it’s tough to still be different in an environment that is full of category norms. This is the key issue with differentiation in product innovations. It’s so darned hard to introduce and even more so – to sustain.

As the final example, let’s look at coffee pods.

Nestlé successfully popularised the Nespresso coffee pod format around the world, even when there are competing formats like Keurig K-Cups in the US. Swanky Nespresso boutiques appeared in cities around the world as the means to market the products. Both were points of differentiation for Nespresso, as there was no other coffee brands that had established physical stores focused on a product format.

In 2012 when their patent lapsed, competing brands started to enter the market with their coffee pods. As machine manufacturers and coffee makers can now compete heads on, Nespresso faced an interesting challenge as they marketed their coffee pods exclusively through subscription and their boutiques. On the other hand, competing brands are now widely available in supermarkets. Nespresso’s absence in supermarkets undoubtedly hurt the brand’s performance when compared to the whole category growth. It was almost like a concession at the end, when Nestlé also introduced the pod format under the Nescafe brand in supermarkets. In order to re-exert their dominance in the coffee capsule market, Nespresso subsequently introduced an alternative Vertuo pod format. Unfortunately by then, the pod ‘norms’ have been set. Just like Nokia trying to introduce new phone shapes, or Samsung trying to re-popularise flip phones, consumers stubbornly stick to the norms and informal conventions. As a heavy coffee drinker, there’s little incentive for me to switch to the Vertuo format when the normal pod format is just as good. I don’t want to buy a new coffee machine – being locked into a subscription and not being able to find the products easily in supermarkets. As consumers, we are happy to ‘satisfice’ when the current solution could sufficiently satisfy the category needs.

Ultimately, differentiation and USPs are hard to protect – what matters more to us as marketers and brand owners – may be ‘meh’ to the mass consumers. When Apple introduced the ability to swipe and pinch our phone screen, Samsung happily adopted the method and eliminated the differentiating factor. When one brand put hyaluronic acid in its skincare in the 1990s, competitors copied the move. Tupperware used to differentiate itself for distributing their products through personal selling, they now sell their products online and through TV shopping to follow their competitors. If one coffee brand owns an exclusive right to single-origin coffee for Ethiopia, there’s nothing stopping another coffee brand who could market single-origin coffee from Indonesia as a point of differentiation. The list goes on and on.

True differentiation does appear from time to time. However, if it can survive through the expected product category norms, it’s hard to hold on to it and ensure that it could sustain the brand performance. Even with a deep pocket, there’s no guarantee that it will give the brand its long-term success.

Let’s just see the core products and the biggest sellers across categories – chances are, they all look like and contain similar products to their competitors. Samsung’s biggest selling phone is not the flip phones, but the one that has a similar candy bar shape as the iPhone, Google Pixel, and the numerous other competitors. The biggest selling TV from Sony is probably pretty similar to Samsung’s, in specs and in the look-and-feel.

So how would a brand manage and market the product portfolio if they are are more or less comparable to the competitors? The answer lies in ensuring that the brand has a solution for their category needs – the brand needs to be easy to come to mind, through continuous advertising reinforcements, and it also needs to be available widely when consumers are looking to purchase. What would increase the odds of consumers picking our brand compared to the competitors then? Well, by ensuring that they recognise our distinctive brand through all of the ads that we show continuously.

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