This last weekend, my son and I were out grocery shopping. A unique experience for two bachelors since my wife is still in Virginia selling the house. As we walked down the shopping aisle, I couldn’t help but notice the lack of differentiation. Have you ever noticed the growing number of brands for water, cookies, chips and bread? I found myself standing in the aisle trying to decipher the benefits, costs and yes – brand – ultimately making a purchase decision.
The experience reminded me of some brand stats I used in an old presentation a few years back that highlighted the growth in “me to” companies. The issue for many companies is that they find themselves stuck — so rather than coming up with a new idea, they copy the industry leaders hoping to ride their coat tail. The stat’s speak for themselves ….
Products Late 70's Late 90's
Milk types 4 19
Bottled water brands 16 50
Magazine titles 339 790
Radio Stations 7,038 12,458
New book titles 40,530 77,446
With no differentiation, the leaders and followers begin a race to the bottom. This race towards commoditization sometimes causes management to panic. Rather then do innovation, they cut the development budget and instead copy more. The death cycle begins ….
It’s interesting to note that even market leaders fall into the trap. Instead of innovating a new product, they believe they can fend off competitors by simply expanding the brand – causing ‘brand bloat’. For example ….
Brand Extensions Late 70's Late 90's
KFC menu items 7 14
Pop-Tarts 3 29
Frito-Lays chip varieties 10 78
Levi’s jean styles 41 70
McDonalds items 13 43
Do we really need that much choice? Or is about creating a product or service that is tailored for me? Sometimes it’s hard to tell.
I don’t know about you, but I prefer innovative products rather than copy-cats.