Sunday, September 29, 2002		Books

Differentiation holds the key to survival
Chandra Mohan

Differentiate or Die
by Jack Trout. East West Books (Madras). Hardback. Pages 236. Rs 350

WITH some 60,000 new products flooding the market every year the customer is faced by an increasingly bewildering range of options. Education, TV and now the Internet have made today’s customer more savvy and more demanding. India has also got a glimpse of this world of endless choice in the last decade.

Surviving in a world of cut-throat competition is a question which haunts every producer today. Past success is no guarantee; yesterday’s icons are falling every day. It is no surprise that out of 89 per cent customers who expressed satisfaction with their car, 67 per cent said they would switch to another make next time. Customer loyalty can no longer be taken for granted; it must be re-earned every time. The difficult part is that:

• Like golf, you have to play from wherever the ball lies.

• Quality and customer orientation are taken for granted; they are no longer differentiating factors.

• In an age of information overload, catching the customer’s attention is difficult.

In this jungle, differentiation alone holds the key to survival. Trout handles the topic with the touch of a maestro. He feels that the present-day customers tend to lose focus and feel insecure, perceive monetary functional, physical, social or psychological risks and hate confusion.

Trout classifies customers into the following categories:

• Intuitives, who always look at the bigger picture. Details are of minor concern.

• Thinkers, who are highly analytical and precise.

• Feelers, who look to the feelings and judgement of others. They like to keep up with the Jones.

• Sensors, who respect facts.

Differentiation has to be designed to catch the attention of this divergent range of customers. Drawing support from examples, Trout assembles a whole host of differentiation routes that can be adopted:

• Attribute ownership: Use leadership in technology, sales, or performance as the platform.

• Heritage: Differentiate a product in terms of location and specialisation.

• Preference: Social proof of preference like suppliers to the Queen, time-keepers for the Olympics.

• How is product made: Concoct a fancy name which sounds impressive and dramatises the difference.

• Being the latest: Can work but may not always work. Being the latest may solve a non-existent problem or mess with tradition.

• Hotness also a way: Could be hot in terms of sales, industry ranking, third-party credentials.

Cut-throat pressures of today’s market dominate the mind of every entrepreneur. Seeing many an icon of yesterday crashing out of the race, insecurity runs large. The unfortunate part is that the battle is endless. But looking at the other side, new brands are still being created. Trout gives ways in which a producer can design a winning strategy.