Differentiate or Die

In “Marketers Chase Evolving Consumers”, Stuart Elliot describes how the marketing world has become a confusing and constantly changing world. Companies are trying to figure how to market their products to modern day consumers, which is proving to be harder than it seems. Elliot writes, “John Costello, the president for global marketing and innovation at the Dunkin’ Brands Group, advocated providing consumers with ‘a real clear point of product differentiation’ by declaring, ‘Differentiate or die”.

Differentiating products reminds me of our class discussion concerning advertising for beer companies, and the pivotal role it has played for firms in attracting customers to buy their products. Over the past several decades, income has drastically increased. Thus, it is not merely price driving product choice for consumers, but the intangible notion that what you consume contributes to who you are perceived to be. The luxury of consuming goods to contribute to a particular persona has caused firms to differentiate their products and utilize advertising as a tool to promote these differences.

Stephen Quinn, the executive vice president and chief marketing officer at the Wal-Mart U.S. division of Wal-Mart Stores, told Elliott, “Marketers must acknowledge they are operating in ‘a new era, a customer era,’ he added, one in which ‘the consumer is in control’ and decides what hits or misses”. This is causing marketing strategies to be much more risky, and for companies to change their marketing to suit what persona customers are yearning to embody. Coca-Cola, for example, launched a product in Argentina called Coca-Cola Life, “which mixes sugar and stevia and is sold in a recyclable bottle, made with plant material, bearing a green label rather than the Coke brand’s familiar red one.” Joseph V. Tripodi, the executive vice president and chief marketing and commercial officer at the Coca-Cola Campaign, said, “It’s like playing with the crown jewels, but we’re encouraged by the results early on.”

What does this imply for the structure of modern consumer goods companies? It seems that firms that are more flexibly structured and able to take advantage of crucial opportunities for implementing marketing strategies will rise above the others in this new market. As we learned in our study of the beer industry, advertising is a perfect substitute within an industry. It takes away competition from competitors whilst adding market share to your own company. Differentiation and consumer centricity have become vital to successful product marketing, which may be forcing companies to reevaluate structure in order to be able to take advantage of opportunities in the ever evolving consumer market.

 

 

3 thoughts on “Differentiate or Die

  1. Ah, but are flexibility and differentiation costly? Each brand, each variation adds marketing overhead, and must fight for shelf space if it’s a consumer good. New products cannibalize the sales of existing ones, too!!

    And specialization tends to go alongside efficiency. Devils Backbone is set up to let them make a variety of beers; they’d have a different setup if they only made one product. Distribution and marketing costs would fall, other things shift too.

  2. Coca-Cola has been trying to shift away from the traditional Coca-Cola Classic brand due to consumers becoming more health conscious. Coca-Cola is trying to use the strength of their brand name to promote alternative products (Coca-Cola Life). In this instance the two products would compete for shelf space, but it would not be cannibalistic since they are being marketed to two different groups of consumers. The question arises of whether other companies’ brand names are powerful enough to allow for diversification.

  3. It’s interesting how this same situation plays out in the service sector. For example large firms like International Hotels Group, McDonald’s and Starbucks all attempt the maximum possible standardization intra-firm, in order to guarantee a specified quality of service to be contrasted with other firms. This standardization is an important component of brand loyalty in this sector.

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