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December 08, 2014

Better product or better brand.

Is it really a choice?

According to Al Reis having a better brand is better than having a better product. Overall, I agree with him. However, I think the balance is shifting – particularly for products or services that are subject to intensive scrutiny and search.

Reis is right that all too many people get fixated on product innovation as the sole means of gaining competitive advantage. No argument there. And everything in life is perceptions. Yup. A better product alone will not guarantee success. Agreed. So where do I find cause to differ? When Reis states,

'It's better to be different than it is to be better.'

Far be it from me to downplay the role of differentiation in brand success but do you really think that different is better than better? No. You need your brand to be different and better (in some way). Why the 'in some way?' Because your advantage might not be product-based. It might be that your brand is simply more salient or more likeable but unless you have an OK product, one that delivers a good experience, you are in trouble no matter how different your brand might be.

Very few people can tell the difference between a beer, cup of coffee or (insert packaged good of your choice) if you serve it to them without the brand name. In days gone by, when I was young and it was legal to give people too many beers in the name of research, we had to conduct double, blind, paired comparison testing in order to understand whether stated preference was real or random. When tested blind the majority of people invariably switched their preference between two rounds of beers even though the beers they were trying were the same. But stick a brand name on the glasses and preferences suddenly stuck.

I would argue that this is not the case with higher risk, more considered choices like financial services, automotive or durables. If people want to know something about a product the information is available online and people check things out before buying. I am not suggesting that people can really work through all the specifications to make sure they make the 'right' choice. They can't. They can, however, be strongly influenced by advice from friends and expert or peer reviews.

So how do you gain competitive advantage in an environment where product and price specifications are readily available? First, make sure your product meets the needs of your target audience. It does not have to be the best at everything but it does need to be good enough so that it does not get panned in reviews. Then figure out what aspect might make your brand meaningfully different to the target audience: is it a specific aspect of the product or is it something less tangible? There are a million and one ways to differentiate a brand, the trick is finding the one that will make your brand the right choice for its audience. Then make your brand as likeable and salient as possible, predispose people to want to buy it.

Author: Nigel Hollis,
Executive Vice President and Chief Global Analyst at Millward Brown
Published: Millward Brown

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