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If you think the biggest thing affecting your business is the economy, you’re bonkers!  Success depends on whether you’ve got the right brand, are selling what consumers want and at the right price.

The ongoing recession, double dip, triple dip, quadruple dip?  Lots of dips??? has led to lots of companies having gone the discounting route both on and off the high street; B2C & B2B alike.  Businesses chase ever faster, cash-strapped customers going forever faster downhill, down-market, down, down, down.  The low-price strategy can seem appealing but its unlikely to deliver much, if any benefit.

In a survey (true this by the way) Motor Company Execs were asked to tell different cars from each other when all the badges had been removed from 13 competing models, all in silver.  Well you guessed it some of them couldn’t even pick out their own from the others.  The harsh lesson from this is that if you have allowed your products and services to migrate towards the centre ground in markets that overcrowded where you don’t, can’t stand out from the rest, then all that lower ing the price is gonna achieve is less margin (no margin in some cases).  Unless you’ve organised your business to have lower operating costs than the competition then discounting is a losing strategy.  somebody is gonna play the game better than you.

I promise, absolutely guarantee that!

Whats the alternative?


Successful differentiation is the alternative, the only alternative, the best alternative, period.

To illustrate:

Unilever and Proctor & Gamble both saw profits slump by 18% and 17% respectively in one quarter.  Reckitt Benckiser’s rose 14% in the same quarter.  The difference; both Unilever and Proctor & Gamble both launched ‘value’ versions of products, Reckitt Benckiser went in the opposite direction, launched a premium version.  Twice as much as the ‘value’ versions in some cases.  Reckitte CEO “in a downturn, people don’t walk away from better products”.

Micheal Porter Competitive Advantage published 1980 said the very same, so what I’m saying aint new, it aint clever but it is right, I make no apology for Mr. Porter.

So why oh why has this simple strategy been forgotten, overlooked, ignored?  Perhaps the simple truth is this; If you can’t come up with a product or service which is absolutely outstanding, then the very uncomfortable truth is that possibly no other strategy will do.


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