Differentiation is the essence of strategy, the prime source of competitive advantage. Getting success under one’s belt in this high tide of competition not only requires the companies to come up with best quality of products but it also requires the company to flaunt a product with a flavour of uniqueness.
Häagen-Dazs, one of the world’s premium ice-cream companies, had to act differently when it decided to enter the Chinese market. In mid -1990s, the Chinese were highly price-sensitive consumers with little dairy in their diet. In walked Häagen-Dazs, with its full fat ice-cream flavours pricing five times higher than in the US. How did Häagen-Dazs come up with this idea of hiking the prices in a country where most of the people are penny-pinching?
When Häagen-Dazs entered the market it had to face the local competitors who used to sell their products at very lower rates. Instead of reducing the prices Häagen-Dazs stick to its idea of selling its products at greater than its par value. It smartly chose its location at high end shopping areas of Shanghai and Beijing. Traditionally, the Chinese are price conscious but the perception of quality changed everything. Häagen-Dazs was able to create a phenomenon that the quality of the product is directly proportional to its price. Hence high quality products often find themselves in reverse price ware in China, raising prices to attract people who will only buy expensive brands. During autumn festival, the Chinese follow a gift giving tradition and Häagen-Dazs took this as an advantage and launched moon cakes (small scoop of well-decorated ice-cream) which are sold as hot cakes.
In this competitive world being ‘smartly’ different does make a real difference. But what does being different imply? Does it require a company to reinvent everything from zero every time it hit the saturation level? The next example is the answer.
Listerine mouth wash was very successful during its launch but its sales started to plummet when its competitors launched mouth wash which tasted good unlike Listerine.
Listerine instead of changing its product it simply changed its marketing strategy by giving the caption ‘Listerine – Taste that people hate twice a day’ and of course Listerine was back on track. Listerine never changed its formula; it stuck to its basic formula. It sustained just by using its technique of constant adaption to changes in the market.
In every industry we have seen leaders who thought differently and came up with a revolutionary product. Ford Henry, J.P Morgan, Steve Jobs and Bill Gates are the best epitomes of the word ‘pioneer’.
Bill Gates got stuck in his saturated level and could not come up with any new striking product after the humongous fame of XP operating system. But, this year, he decided to strike the market with a very unique user friendly operating interface Windows 8 which will use Metro design language.
On the other hand, during their presence Ford Henry, J.P Morgan and Steve Jobs were very successful in leading their companies just by bringing a different product every time. These people also made sure that all its employees stick to company’s ethic which states “Think Different” irrespective of circumstances. Hence Morgan Stanley, JP Morgan, Ford and Apple are able to withstand and burgeon at a faster rate.
So, the bottom line is: It does make a difference, by being different.
Bharat Chand
