Category Archives: Power Categories

Are you only doing the things you are best at?

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if not you are probably struggling to get enough growth or find yourself competing on price.  I was reminded of this by two features in Marketing Week yesterday. 

One was about Reckitt Benckiser who have just posted results with revenue up 20% and beating all their targets.  The other was about Tesco online who are enjoying good growth in their core grocery delivery and Tesco Direct businesses, but are pulling out of house sales, flowers and clothing as they are losing customers here.

   

Reckitt_4
The most striking thing about the Reckitt’s brand list is how each product as the best at what it does, and in each case the product focusses on a narrow task. e.g.

Vanish – removes small difficult stains
Finish – dishwasher tablets
Calgon – removes hard water deposits
Dettol – anti bacterial cleaning
Airwick – air freshening
Lemsip – flu treatments
Nurofen – fast pain relief

      

Tescoeverylittlehelpslo
Tesco’s forays into markets that might seem attractive (flowers, house sales, clothing) have struggled as they end up being one provider competing on price or offering various new features.

Big brands also do this.  They must be the best at something.  Coke has a broad appeal and sells some generic soft drink values as well as its own brand personality, but it wins by being more available than any other brand. 

Mobile phone handsets that are winning at the moment seem to do one thing especially well.  Sony Erricsson have a walkman range focused on music, Samsung really attend to style and feel with a lot of designs so that friends can each have a different one.  Nokia and Motorola have struggled to stand out more recently.

This has got me thinking – what is it that Differentiate does best?  The best way to find out is to ask your customers.  I plan to ask our customers and ezine readers in the next ezine.

Identify what you do best and then narrow/specialise your business to deliver this and focus on selling to the people for whom what you do best is what they want.

In the language of the Growth Game – what you do best helps you define the characteristics of your Power Categories.  This is where you should specialise and focus. 

Reckitt Benckiser did not win by trying to take Unilever, P&G and GSK head on, they found specific niches where they could be the best and they focussed on these.  If big players like this find specialising is the route to profitable premium priced growth.  I guess we can all learn from that.

Why you should worry less about the future?

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I was listening to this fascinating discussion on Start the Week on BBC Radio 4 on Monday

We are hard-wired not to truly estimate risk, too vulnerable to the
impulse to simplify, narrate and categorize – and we don’t even realise
it. What we should understand, argues the academic and city trader NASSIM NICHOLAS TALEB,
is that our world is dominated by ‘black swans’, highly improbable
events that have a massive impact and are nearly impossible to predict.
Black swans, he says, mean we should ignore ‘experts’, stop reading
newspapers and learn to take advantage of uncertainty. Nassim Nicholas
Taleb will be delivering lectures on The Black Swan at the University of Oxford on Wednesday 5 March and at the London School of Economics on Thursday 6 March. The Black Swan: The Impact of the Highly Improbable is published by Penguin.

Here is the podcast link  Nassim is in the last 15 minutes

I got 5 points from the discussion

  • What actually happens is often not possible to predict
  • Measuring (empirical?) what is happening is more useful
  • Projecting current trends is more reliable than expert predictions
  • Our assessment of the risks we take will be wrong.
  • Newspapers, colleagues and experts often try to convince us we can predict and manage risk.

It got me thinking, so what does this mean for businesses in pursuit of more growth? 

You should spend less time worrying less about the future.  So reduce the time you spend

  • Worrying about things you cannot control
  • Forecasting future events (since we will be wrong)
  • Predicting competitor reaction
  • Reacting to the latest hot topic in the marketing press

You should spend more time strengthening your ability to withstand unexpected shocks. To do this, measure what is actually happening to the business and assume it will continue until you create change by doing these things

  • Discover your customers frustrations and unmet needs
  • Know and measure what is important to customers
  • Discover how to make this more available to customers
  • Take action based on these insights and measure the results

You can do a simple audit to see where the balance of your time is spent.  Is it more on worrying about the future or could you do more to strengthen your competitive ability.

Corporate teams can easily get sucked into worrying about the future, whereas entrepreneurs tend to focus on things they can do now.

In the meantime.  I am off to the LSE on Thursday to gain some more insight into how we can strengthen our approach to helping you translate insights about customers into practical steps that will create more growth.

If you would like a free telephone audit to discover if you are worrying about the future too much or are doing enough to get on with the present, then email us or phone us on 020 8334 7202 to arrange it.

P. S.  This is exactly what Power Categories and Power Attributes and Power Channels will help
you achieve this action orientation and address the business fundamentals.  The approach is about
translating insights about customers into practical steps that will
strengthen your competitive position in the market.

Do you struggle with too much data or not enough insight?

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Tabloid newspapers are powerful communicators and
can exert influence on how people think.  One of the most effective
tools they use (and abuse?) are concepts that simplify reality and
allow people to see what is happening.  So a politician is
"beleaguered", a celebrity is on the way "up" or "down",  a government
is either "on a roll" or "stumbling".  Many people say that the papers
influence opinion and they argue they just reflect it.  But whichever
of these is true they cut through lots of data and create insight.

 
As marketers we need to create insight and become powerful communicators
to win over the business to our ideas for growth.  There are often many
ideas but this is accompanied by great uncertainty about which will
produce the right results.  This uncertainty seems to derive from two
sources.  Either there is too much data, so it is difficult to sift out
what is important or there is a shortage of real customer driven
insight because there is little market research available or affordable.
 
 
Have you found yourself sitting through analytical or descriptive presentations that provide some interesting content, but few actionable recommendations? 
 
Or sometimes have you found yourself struggling to come up with
insights and unable to justify the investment in high price market
research to create the customer understanding that will bring clarity
to your decisions?
 

One of the breakthrough tools we have developed to cut through data and create insight
is to develop "really useful concepts" that help you to see through the
mist and bring clarity to decisions about what to do.  We have found it
makes a huge difference and supports a cost effective approach.

  • When there is too much data, the "really useful concept" slices
    through the data to bring out the compelling insights.
  • When there is not enough money for new research, the "really
    useful concept" supports a structured approach to thinking through the
    issues and coming up with answers.  This approach may be done with
    customers or just your colleagues in the business.
You will probably have heard us talk about the concepts we use.
What characterises all of them, is that they are built around an
important business decision rather than just descriptive of an approach
to analysis or discussion.
 
  • Power Categories – where should we invest to get the most profitable growth?
  • Power Attributes – what features and benefits most powerfully influence customers to choose our products?
  • Power Propositions – products and services that deliver power attributes.
  • Power Channels – where does the product or service need to be seen and be available so our customers will discover it and can buy it?

We also have two additional ideas that have provided valuable support.

  • Rocketing – the tendency for customers to trade up and spend disproportionately on things that are really important to them
  • Internal Entrepreneur
    – describes the skills and behaviours of the people who can make things
    happen and influence the organisation to change and actively create
    growth.

We
were recently challenged about why our website and our conversation
does not use the conventional language of the brand marketing world.
So why we do not talk about market segmentation, brand positioning,
marketing communications, brand pyramids, brand wheels and so forth?
The question caused me to think about this and reflect on whether by
being different, we are just confusing the issue.  In our experience
this marketing speak can encourage debate, but often does not lead to
decisions.  So we plan to stick to these "really useful concepts"
because they are just that "really useful".
                                  
We know that internal entrepreneurs succeed when they become great communicators.
Maybe we can learn from the Tabloid press and use simpler more powerful
concepts.  When our clients adopt these "really useful concepts" they
find it helps to create a common understanding about the decisions that
the business must make.  This helps engage the business team and win
support for the ideas. 
                                  

What is it that makes a concept "really useful". It must have the following characteristics

  • It creates insight about an important business decision or action.
  • It communicates.  It is easy to grasp and possible to have an idea
    of what it is about from the title.
  • It is adaptable and can help you derive insight from robust data or management discussion.
  • It has been proven to work through robust analysis or previous practical examples.
 
 
 
What "really useful concepts" do you use to make decisions?  If
you want to share them, you can look at the blog version of this article and post a comment.

                                  

 
 
 
 
 
Our next due date for an ezine is 25th December, so we will skip
that one and the next issue will be a New Year perspective on 2nd
January.

                                  

In the meantime have a great holiday break.  The Differentiate
team will be taking the chance to get some skiing in.  But we are back
shortly after Christmas and will be fired up for the New Year.