Marketing Series Article The Physical Difference It’s the most obvious of the all! by Dick Barnes, Principal, The Freeland Group In recent columns we have been discussing the ways a company can differentiate itself from its competitors. Differentiation is important, as without a clear difference the consumer would have no reason to choose our firm from among others in the market. Some companies differentiate themselves by being cost-cutters, reducing their prices and their margins until consumers find them irresistible. This may capture market share, but will not generally make a company reliably profitable over the long run. Keeping that in mind, we have been exploring ways to accomplish differentiation while maintaining, or increasing, the bottom line. One of these is to produce a noticeable quality difference in the services the firm includes with physical products. Another is to create differentiation through our personnel, through training and by emphasizing their skill levels and the way they work with customers. Earlier on, we looked at how branding and trade names help differentiate who we are and the products we represent. To finish off this subject, in our next columns we will look at the most obvious area of all…that of product differentiation. This may seem a strange subject to discuss within the wholesale market place. After all, many of you carry nearly identical product lines while others may carry or manufacture very unique products that have obvious differentiation value. We should remember, however, that a physical product can have many different aspects. Discussing and categorizing those aspects will help us understand them and discover ways of using them in our marketing efforts. Some of these aspects of the product are an integral part of its actually physical form. They include variables that influence appearance; such as color, size, shape, and packaging. Marketing folks often focus on these aspects in the broader sense, labeling them as style, design, and features. A color, for example, might be considered a feature or it might be part of style. Safety Orange could be chosen to enhance safety or make the item easier to find in the workplace; these are features. Metallic Grey, on the other hand, might be chosen because it makes the item look stronger or more durable; a style issue. Style can help to create distinctiveness, increasing the eye-catching appeal of the product. It also has a great deal to do with the perception of the quality, the durability, or the power of the product. The manufacture might well have had an entire team of top engineers design the item to do a particular job well. But the product may fail to move off the shelves if it doesn’t “look” like it will do that job with ease. In the business to business market we may think to ourselves that style has little or no importance, but we’d be wrong for the most part. When prospects end up comparing two final choices in a piece of equipment, the decision may well rest on which piece of gear simply looks better, stronger, faster, safer, or easier to use than the other. The features of a product may well be one of the more important areas of differentiation. In fact, most products have more features than the consumer will ever see listed in an advertisement or on the packaging. This is important to remember, because you may be able to differentiate a product you carry, one which is also carried by every other distributor in town, by pointing out particular features that no one else has noticed. You might also build a positive differentiation by combining features of related products together in order to demonstrate an overall benefit that none of your competitors are pointing out. Finally there is design, where everything is pulled together. A well designed product is easy to look at, understandable to operate, as safe as it can be built to be, and encompasses all the qualities of reliability, ease of repair and maintenance, ease of installation, and ease of disposal once its used up. These first areas of product differentiation are normally the first we notice as consumers ourselves, as well as the first things people notice about the products we are marketing. They are important for this reason alone. But how does this information benefit the manager in charge of getting these products off the shelf and into the consumer’s hands? By listing and reviewing all the features of the product, by observing the style from a prospect’s point of view, and by studying the elements of its design, we may begin to look at the product with fresh eyes. Why is that of value to us? Here is one example: A few years back I had the privilege of consulting with a manager who had pulled a true marketing coup on the competitors in his region. His firm, and half a dozen others, all distributed a line of identical parts used in machine tooling. This gentleman’s firm had been about even with the competition in sales of this equipment line…in other words they each had from twelve to twenty percent of the local market. No one had a clear lead in sales. He foresaw an event having to do with the dramatic increase in the cost of a certain raw material. He knew this equipment line well enough to know that, if used correctly, the operator could reduce wastage of this raw material. It’s very likely that a number of other distributors also understood this. The difference was in the way he used this knowledge. He immediately altered both his advertising, and the approach used by his sales force, to emphasize and to train the users of these parts in ways to reduce waste. As soon as the anticipated price increase in the raw material came about, his firm was perceived not only as the supplier of solutions, but as the company with the most industry expertise. Even though he was selling the same product as his competitors, his share of market went up quickly and has stayed at nearly fifty percent ever since. His understanding of the full set of features within the product line gave him the ability to market not just physical products, but to tie an unrecognized feature into an immediate buyer benefit. There is a great deal of difference in selling features and in selling benefits and solutions. When we think of why we purchase, we will realize we usually do so to solve a problem or a need. We do not, for example, really want to buy lubricants. We do, however, want to have our machines operating without freezing up on us. Next month we will talk about the product aspects of reliability, durability, performance, conformance, and repairability. 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