First of three parts
In the beginning, choice was not a problem. When our earliest ancestor
wondered "What's for dinner?" the answer wasn't very complicated. It was
whatever animal in the neighborhood he could run down, kill, and drag back
to the cave. Today you walk into a cavernous supermarket and gaze out over
a sea of different types and cuts of meats that someone else has run down,
killed, dressed, and packaged for you.
Your problem is no longer catching it. Your problem
is to try to figure out what to buy of the hundreds of different packages
staring back at you in the case. Red meat? White meat? The other white
meat? Make-believe meat? But that's only the beginning. Now you have
to figure out what part of the animal you want. Loin? Chops? Ribs? Legs?
Rump? And what do you bring home for those family members who don't eat
An Explosion of Choice
What has changed in business over recent decades is the amazing proliferation
of product choices in just about every category. It's been estimated that
there are 1 million SKUs (standard stocking units) out there in America.
An average supermarket has 40,000 SKUs. Now for the stunner. An average
family gets 80 to 85 percent of its needs from 150 SKUs. That means there's
a good chance we'll ignore 39,850 items in that store.
Buying a car in the 1950s meant a choice between a model
from GM, Ford, Chrysler, or American Motors. Today you have your pick of
cars, from GM, Ford, Chrysler, Toyota, Honda, Volkswagen, Fiat, Nissan,
Mitsubishi, Renault, Suzuki, Daihatsu, BMW, Mercedes, Hyundai, Daiwa, Mazda,
Isuzu, Kia, and Volvo. There were 140 motor vehicle models available in
the early 1970s. There are 260 today. Even in as thin a market as $175,000
Ferrari-type sports cars there is growing competition. You have Lamborghini,
a new Bentley sports car, Aston Martin, and a new Mercedes called the Vision
SLR. And the choice of tires for these cars is even worse. It used
to be Goodyear, Firestone, General, and Sears. Today you have the likes
of Goodyear, Bridgestone, Cordovan, Michelin, Cooper, Day-ton, Firestone,
Kelly, Dunlop, Sears, Multi-Mile, Pirelli, General, Armstrong, Sentry,
Uniroyal, and twenty-two other brands.
The big difference is that what used to be national markets
with local companies competing for business has become a global market
with everyone competing for everyone's business everywhere.
The Law of Division
Like an amoeba dividing in a petri dish, the marketing arena can be
viewed as an ever-expanding sea of categories. A category starts off as
a single entity. But over time, the category breaks up into other segments.
This "division" is a process that is unstoppable. If you have any doubts,
consider the table on the explosion of choice.
|KFC menu items
|Frito-Lay chip varieties
|Soft drink brands
|Bottled water brands
|New book titles
|OTC pain relievers
|TV screen sizes
|Levi's jean styles
|Houston TV channels
|Running shoe styles
|Women's hosiery styles
|Contact lens types
The "Choice Industry"
All this has led to an entire industry dedicated to helping people with
their choices. Everywhere you turn, someone is offering advice on
things like which of the 8,000 mutual funds to buy. Or how to find the
right dentist in St. Louis. Or the right M. B. A. program from among hundreds
of business schools. (Will that help me get a Wall Street job?) The
Internet is fast filling up with dot coms that can help you find and select
anything you can imagine, all promised at rock-bottom prices. Magazines
like Consumer Reports and Consumers Digest deal with the
onslaught of products and choices by rotating the categories on which they
report. The only problem is that they go into so much detail that you're
more confused than when you started.
Consumer psychologists say this sea of choices is driving us bonkers.
Consider what Carol Moog, Ph. D., has to say on the subject: "Too many
choices, all of which can be fulfilled instantly, indulged immediately,
keeps children-- and adults-- infantile. From a marketing perspective,
people stop caring, get as fat and fatigued as foie gras geese, and lose
their decision-making capabilities. They withdraw and protect against the
overstimulation; they get 'bored.'"
Choice Can Be Cruel
The dictionary defines tyranny as absolute power that often is
harsh or cruel. So it is with choice. With the enormous competition, markets
today are driven by choice. The customer has so many good alternatives
that as a marketer, you will pay dearly for your mistakes. Your competitors
get your business and you don't get it back very easily. Companies that
don't understand this will not survive. Just look at some of the
names on the headstones in the brand graveyard: American Motors, Burger
Chef, Carte Blanche, Eastern Airlines, Gainesburgers, Gimbel's, Hathaway
shirts, Horn & Hardart, Mr. Salty pretzels, Philco, Trump Shuttle,
You Have to Be Careful
If you ignore your uniqueness and try to be everything for every-body,
you quickly undermine what makes you different. Consider Chevrolet. Once
the dominant good-value family car, Chevrolet tried to add "expensive,"
"sporty," "small," and "truck" to their identity. Their "differentness"
melted away as did their business. The brand is now behind Honda, Ford,
and Toyota (Honda, 735,633 cars; Toyota, 679,626 cars; Ford, 591,010 cars;
Chevrolet, 479,802 cars; total sales in 1998).
If you ignore changes in the market, your difference can become less important.
Consider DEC (Digital Equipment Corporation). Once America's premier minicomputer
manufacturer, they ignored changing technology that was making desktop
computing the driving force in the office. Their "differentness" became
less important. DEC is now deceased, having been absorbed by Compaq, one
of the biggies in desktop computing.
If you stay in the shadow of your larger competitors and never establish
your differentness, you will always be weak. Consider Westinghouse. They
never emerged from the shadow of General Electric. Today Westinghouse is
no longer with us.
It's an unforgiving world out there.
Excerpted from DIFFERENTIATE OR DIE by Jack Trout. Copyright 2000
by Jack Trout.
Reprinted by permission of the publisher John Wiley & Sons, Inc.
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