A contrarian buzzword
- Don't Be Unique, Be Simply Better
«Think Inside the Box»
An interview with
professor at IMD in Lausanne
By Jorge Nascimento
Rodrigues, editor of Gurusonline.tv, September 2004
Think Outside the Box is terrific in PR, marketing and
advertising if you are ALREADY leading the market in
delivering generic category benefits. Be unique, with
an unique value proposition, as the motto says, is great,
but, the trivial thing is different: for most businesses
in most markets, the FIRST PRIORITY should be to become
simply better than the competition at giving customers
and clients what matters to them most. So, be realistic,
guys! It's the Client Routine Needs fulfillment that
matters! Not the cosmetics. So, first, Think Inside
the Box. IMD Professor Séan Meehan is profoundly
impressed by Toyota - the lesson from this Japanese
"keiretsu" it's simple: exclude the gimmicks
and pursue the essentials, always.
Séan Meehan with Patrick Barwise just published
at Harvard Business School Press "Simply Better".
They presented the book at Sloan Management Review this
Summer (2004). At "Contraria" section, Séan
and Patrick wrote a summary of their new book, and pointed
out: "Customers rarely buy a brand because it offers
a unique feature or benefit". Also, in the Summer
edition (2004) of Business Strategy Review, London Business
School magazine, the authors presented "6 Rules
to Become Simply Better".
Séan is professor of Marketing and Change Management
at IMD, the European Business School at Lausanne, Switzerland.
Buy the book
|The 6 Trivial Rules of Simply Better|
Rule 1: Think Category benefits, not unique brand benefits|
Rule 2: Think Simplicity, not sophistication
Rule 3: Think Inside, not outside the box
Rule 4: Think opportunities, not threats
Rule 5: Exception - Ok for creative advertising, forget Rule 3
Rule 6: Think Immersion, not submersion
Since Michael Porter's competitive strategy in the
1980s we listen from the consultants that differentiation
and uniqueness is the secret for business success. Even
more: discover a niche of uniqueness is a true receipt
for excellence. What's wrong with this "incumbent"
The problem isn't Porter's idea per se, rather the
pride of product oriented managers that are so excited
about adding the latest gizmo, or frankly irrelevant
feature just because it differentiates their offer (literally)
from the competition. The problem is that customers
often don't care about this feature. Rather, customers,
have some basic expectations, of each product or service
they purchase. These are, what we call, generic category
benefits, and related to the functionality of the product
or service. Differentiation or uniqueness, at the cost
of not providing this, can be a costly error, because
you land up not giving the customer what really matters.
Differentiation must be related to something that truly
provides value and matters to customers.
Can you give examples?
Orange, for instance, has practiced this since the early
1990s and has been providing its customers a reliable,
high quality experience with a good value for their
money. Today, as the leading mobile phone services company
in the UK, it has won the J.D Power and Associates mobile
telephone customer satisfaction study for four years
in a row by focusing on the generic category benefits.
It pioneered per second billing, a simple rate plan,
a money back guarantee, and free itemized billing at
a time when customers had an extremely negative image
of existing players in the industry. Orange anticipated
the customer's needs and exceeded their expectations.
The hotel group, Ritz Carlton, is another organization
that inculcates its service philosophy into every aspect
of its operations. By studying top performers in other
organizations, it develops an ideal profile for each
position, hires upbeat and ambitious people and thereby
incorporates, into its values and philosophies (known
as Gold Standards that are published on its website),
a service level that not only commits to compliance
but also anticipation of its customers needs. These
are but a few of the examples of companies who truly
believe and operate on the credo that the customer is
king. However, in today's world, this is, unfortunately,
differentiation from the pack.
«As Toyota, the world's
most profitable automotive company puts it, the trick
in the offering is 'excluding gimmicks and pursuing
In Marketing we listen people saying that unique
features and special and sophisticated benefits are
the way to "capture" and fidelize clients.
Your research points out that we can be "salient",
standing out from the crowd, without offering anything
unique. Can you explain this paradoxical conclusion?
As already pointed out, the first priority should be
to satisfy the basic functionality of the core product
or service offering. As Toyota, the world's most profitable
automotive company puts it, the trick in the offering
is "excluding gimmicks and pursuing the essentials."
Cemex provides this in its cement offerings to the construction
industry, Tesco provides this in the grocery store business,
and Ryanair provides this to those looking for really
cheap air travel. Each of these companies has chosen
to be the best in providing the generic category benefits,
those that customers expect most out of their interactions
and experience with these companies; they are "Simply
Better". Performance on these basics can be so
varied as to dominate any other sources of differentiation
on which competitors might tend to position themselves.
And as these companies continuously refine their offerings,
customers see them as different, different as in simply
better, and not necessarily with a differentiated or
a unique offering.
If reliability and utilitarian upgrades are enough,
how we innovate, even if changing of the rules of the
game is rare?
Innovation is life for our exemplary companies. We provide
a host of examples of how Orange was the first to bring
specific innovations that customers really cared about
to the market year after year. They addressed customer
needs by broadening the basics, i.e. setting new standards.
Tesco, one of the most successful food retailers, beat
all comers in showing them how to take advantage of
the internet developments of the late 1990s - unlike
Webvan, it did NOT think out of the box, it just used
the web interface to enhance the fulfillment of the
most basic category benefits: good range, good price,
on time as promised. Tesco.com is now the world's most
successful online grocer. The lesson is you innovate
by focusing on the generic category benefits and thinking
about how you can nail them better and better.
The lesson is you innovate by
focusing on the generic category benefits and thinking
about how you can nail them better and better.
Evolution in the continuity it's better than out
of the box revolutionary thinking? Or it depends on
Thinking outside the box is too often an excuse for
sloppy thinking. Yes of course, quantum leaps are good,
but only if in the right direction - one must protect
the business system and the customer value proposition
to the target market. And in the process of doing so,
accept that there will be difficult trade offs to make
while choosing what and how to bring to market. Ryanair
is clear in articulating its customer value proposition
- a low airfare, a safe flight, normally on time. It
does not promise food or accommodations in case of a
delay Ryanair has not thought out of the box. It has
simply developed a business model that clearly defines
its offering and the value to the customer. And the
company strives to consistently deliver this. Its customers
recognize this and so does the media. In a recent UK
article, the columnist reported that while the airline
infuriated many of its customers, these very customers
would take a gamble and fly with the airline again.
Its core offering was simply too good to pass up, simply
better than any other they could find in the market.
Be second or third to entry the market, it's the
best solution for survival and growth, learning with
In an ideal world most executives would prefer to be
creators and innovators rather than followers but entering
into the unknown is expensive and these ventures generally
fail. Analyses suggest anything between 1% and 10% success
rates for new product launches. There is an analysis
of the so-called first mover advantage in new categories
that shows that being first to market, while potentially
advantageous, is both risky and less important than
other factors. The main factor is to be the first that
"gets it right" once the market has started
to get established. P&G is defined as the early
leader in disposable diapers, Sony, JVC and Matsushita
in video recorders and RCA in color TVs. Similarly Kellogg,
Hershey, and Wrigley in cereals, chocolate, and chewing
gum. Yet, none of these was a pioneer.
Analyses suggest anything between
1% and 10% success rates for new product launches. There
is an analysis of the so-called first mover advantage
in new categories that shows that being first to market,
while potentially advantageous, is both risky and less
important than other factors. The main factor is to
be the first that "gets it right" once the
market has started to get established.
Marketers and consultants tell us that "socializing"
is key to fidelize customers. What's the best way to
connect with clients and to create communities of word
of mouth or fans?
Creative advertising and marketing must start with
a clear understanding of the target market and what
you want this market to think, feel, or do, in response
to your campaign. This communications objective must
follow from one's business objective. There is a framework
to this process, one described in detail in our book,
Simply Better, and originally developed over thirty
years ago at J. Walter Thompson. The framework requires
you to understand where the market (the target market,
as discussed above) is now, the customer's perceptions
that determine the brand's performance, and the communications
which suggest the changes in actions of those exposed
to the message. The next aspect relates to how to get
to the intended positioning. And this is the out-of-the-box
creative thinking typically done at an advertising or
communication agency. And the last aspect, of whether
the strategy is yielding its results, involves data
gathering and analysis, something generally done by
the company once again. The process of best connecting
with clients and creating fans is typically an iterative
one where constantly refining the steps in this framework
allows one to more easily navigate the path towards
the end goal.
From the 6 rules you mention, which will you "choose"
as your favourite?
Rule 3, Think Inside not Outside of the Box.
Can you give an example of the strategy you recommend
that impressed you more?
I am absolutely impressed by the impact of Toyota. It
has eschewed the fads and fanciful trends of the auto
industry to build a company that delivers to the mass
market so well it has a market capitalization great
than Ford GM and Daimler Chrysler added together.
Séan can be contacted at: Meehan@imd.ch