The Best Product Doesn't Always Win
Our experience and history has shown that the best product does not always win. I've been a die-hard Coca-Cola loyalist for decades so remember all too well the New Coke debacle. As a reminder, Pepsi was taking serious ground from Coke because taste tests showed that people preferred a sweeter cola. In an effort to recapture their lost market, which had plummeted from 60% to 24%, they reformulated Coke to be sweeter. The company tested and tested the new taste and research showed that people overwhelmingly preferred New Coke. But, when they actually launched it, people lost their minds when they learned that the company had messed with the classic, beloved beverage. Coca-Cola asked their customers if New Coke tasted better, but they didn't ask the right question: Do you want to change the formula of Coke? This is one of the biggest pitfalls to traditional branding which focuses on the product feature, without understanding explicitly what motivates your most strategic audience segment to buy.
In the current healthcare landscape, figuring out how to rise above the noise is more important than ever. The market is facing serious cost-constraints, payment structures have changed, and consumers are taking a new role in their healthcare decisions. Finding a way to differentiate your brand from others gives you more than just a competitive edge -- it can change the rules of the game.
At Grey Matter Marketing, we practice the discipline of Category Design to offer innovative medtech companies a new game plan to grow their market share, thought leadership, and brand dominance. Category Design is a strategic approach to branding that goes beyond innovation and disruption to create and develop a new market category.
The Power of an Unfair Competitive Advantage
The traditional branding approach focuses heavily on competing in the current market while Category Design focuses on finding new markets and opportunities. Working inside of pre-determined market constraints will only allow you to gain a small piece of the pie. Creating new opportunities or expanding into a new market will allow you to win the entire pie.
To start, companies need to focus on finding and creating unfair advantages – areas of their business that the competition simply cannot emulate. These advantages can manifest in the product, the business model, and even how the business operates. Mining your unfair competitive advantage is what powers your company to its singular goal: becoming the Category King of a new category.
One of the most well-known and successful corporate rebranding campaigns was executed in the late 90s by Apple. It came at a time when the company was facing bankruptcy, before they brought Steve Jobs back as CEO and an unlikely investor (i.e. Bill Gates) made a $150 million cash infusion. At the 1997 Macworld Expo, Steve Jobs said, “We have to let go of this notion that for Apple to win, Microsoft has to lose.” At a time when computers meant beige boxes, Apple made the bold move to capitalize on their unfair advantage and leverage their design prowess to create the iMac, which made their computer truly revolutionary and desirable to the tech-obsessed generation at the turn of the century. Thanks to the iMac, over the next 3 years the company secured $5.9 billion in revenue, compared to just $11.5 billion total in all previous years. You cannot build a dominant, defendable market position by playing the same game as your large incumbent competitors. You have to change the agenda in the market to give yourself a fighting chance.
Not Just a Little Different
Creating an unfair competitive advantage means focusing on an area that your competition simply can’t match, maybe because they’ve become too complex over time, or their existing market requires a different approach. An unfair competitive advantage propels you into a leadership position in a new market category. It needs to be distinctively different and immediately recognizable. Your target audience needs to see it as unique not just a little bit different. It also needs to be hard to duplicate. If it is easy to do what you’re doing, the idea will become a commodity. And very few profit from a commodity.
Here are some questions and points to think about to help you uncover your unfair advantage:
- What are people not getting from other similar products which yours can deliver to them? This should be central to making your business stand out from the competition.
- There are probably a handful, if not more, quality providers in your field offering options for customers to choose from. While your business might always offer something different, is your "different" something your customers care about?
- Understanding what your customers want, especially when they go with someone else, is crucial to tailoring your message and product to the needs of your market. What is something your customers want that you cannot provide yet a competitor can?
- How can you leverage that uniqueness to erect a strong barrier to entry against your potential competitors?
- How will your perceived competition react to your unfair advantage? It needs to be dynamic so when your competitor reacts and the market shifts, you will know what your next strategic move is.
- What are the challenges or frustrations that customers currently face? Get feedback from end users about your idea designed to address one or more of these. Understand the attributes and services that resonate with your audience. Try to focus on a few of the things customers perceive as valuable.
- What are the longstanding assumptions in this market that may no longer be relevant? What changes in economics or distribution allow you to compete in an unfair way?
At the end of the day, if you don't have an unfair advantage, don't expect unfair success. After the total failure of New Coke, Coca-Cola did a 360 and successfully capitalized on its most loyal customers by relaunching Coca-Cola Classic, which is the formula they still use today. But unfair competitive advantages are not just for Coke and computers. Get in touch to learn more about how Category Design can give your company an unfair advantage and propel your company into a leadership position in a new market category.
Download this step-by-step worksheet and find out how Category Design can help your medical technology company uncover your unfair competitive advantage.