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Archive for the ‘commoditization’ Category


Via the SwampFox Insights blog:

“The majority of the world’s designers focus all their efforts on developing products and services exclusively for the richest 10% of the world’s customers. Nothing less than a revolution in design is needed to reach the other 90%.”

—Dr. Paul Polak, International Development Enterprises

The man has a point.

Check out this brilliant website.

A lot of people don’t think of “design” as being all that important, because our daily interactions with “design” are limited to gadgets like the iPod or the latest pair of Oakley sunglasses, or maybe a faucet or something. Maybe we think of design when it comes to cars and clothes and furniture. But smart design can also save thousands of lives every day. Yes, something as seemingly superfluous as “design” can change the world. (Starting with the first tool, taking a detour via the wheel, and fast-forwarding to the millions of things we now take for granted, like the plasma TV, the hybrid automobile, the artificial heart, and even the ubiquitous bottle of Coca Cola.

If you aren’t the humanitarian type and couldn’t care less about saving lives, bear in mind that design can also create entirely new markets. (We just talked about getting there before the herd, so your ears should be perking up just about now.)

How can smart design can create new markets? According to this article in the New York Times entitled “Design That Solves Problems for the World’s Poor” (annoying subscription required):

“A billion customers in the world, are waiting for a $2 pair of eyeglasses, a $10 solar lantern and a $100 house.”

For starters.

That’s something to think about. Not in terms of exploitation, but in terms of wealth and opportunity creation. (The development of the easy-to-use, virtually crunch-proof windup $100 laptop – specifically designed to introduce computers and the internet to 3rd world children – is probably among the most ambitious of these types of endeavors, but also a great example of how we can start to create opportunity in regions of the world in which mere survival is still the order of the day.)

While everyone else is trying to appeal to the richest 10%, maybe, just maybe, the real opportunities are elsewhere. Maybe the time to get into these markets is before they even exist. The seeds are being planted now. The herd is starting to gather. Maybe by the time the market exists and the pastures are green and lush, you’ll find yourself in the back again. Maybe you’ll kick yourself in the butt for not having made a move sooner. (History repeats itself.)

What if you could create one of the most lucrative companies of the 21st century AND save tens of thousands of lives at the same time? What if you really could be enormously successful AND help save the world all in one fell swoop? What if you could have your cake and eat it too?

In this economy, perhaps these are questions worth asking yourself – especially if you are a US or Western European manufacturing company looking for a reason to go on.

Don’t even approach the problem from a humanitarian standpoint if you don’t want to. Approach it from a business standpoint. Here’s the problem you need to solve: 90% of the planet’s population wants something that they probably can’t get very easily. All you have to do is figure out what that is, how much they’re willing to pay for it, and how to get it to them. It could be a mode of transportation. It could be a light source. It could be a sanitary product. It could be food. It could be a garment. It could be knowledge. It could be something as simple as a tougher bicycle wheel. It could be anything.

There is no single answer. There are probably thousands upon thousands. And that’s exciting.

Whatever it is, it could also have applications right here, where the richest 10% of the world population lives and eats and shops 24/7/365.

It might even be a better option than trying to become the next Google.

Food for thought.

So… what are you working on right now?

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illustration by Tom Fishburne

illustration by Tom Fishburne

The value of being ordinary is exactly zero.  Here’s what Tom Fishburne has to say about it:

“Blending into the herd” feels like one of the most common responses to the recession.  2009 is full of so much risk on its own, businesses are becoming even more risk adverse than usual to compensate.  The first projects to get cut are the speculative ones.  Many companies are pulling back on innovation as a way to batten the hatches.

This defense is illusory though.  If anything, retailers are facing even greater pressure to rationalize their shelves.  Redundant products are in danger of getting cut.  Consumers are shifting to cheaper private label if there’s no compelling reason to buy branded products. Differentiation is more important than ever.

I think this climate creates a lot of opportunity for brands that are willing to try something new.  The ones that can adapt the quickest and offer something truly unique have the potential to not only survive, but thrive.

Amen.

Not that there isn’t value in commodity products. (Check out the crowds at Wal-Mart and Costco.) But not every brand is a commodity brand. Not every company’s model meshes with the 99-cent value meal. And for those millions of companies – big and small – for whom being in business is about more than offering the cheapest product on the market, differentiation matters. If grabbing wallet-share was a struggle before, it has now become a knuckle fight to the death. Being better, smarter, faster has now become a matter of survival.

And kids, being better, faster, smarter takes a lot of work. And deliberate focus. It doesn’t happen by accident. Likewise, it sure doesn’t happen by “blending in” or “Playing it safe.” In this economy, value isn’t just your competitive edge, it’s your lifeline. The more unique you are, the more outstanding your value, the greater your opportunity to thrive in any economy – perhaps particularly a distressed one, when clients and customers are particularly careful when it comes to how they choose to spend their money.

Standing out has its advantages: When you stand out, you stand for something. When you don’t, you stand for nothing – and there isn’t much value in that.

Think of innovation and differentiation as your double-sided ticket out of this economic mess. Companies that will create unique value, unique products and unique experiences will lurch ahead, while companies that focus on trying to survive by contracting and blending in with the masses will be lucky to last the year.

After all, then the going gets tough, the tough don’t wuss out and blend with the herd.

Have a great Monday, everyone.  😉

(Hat tip to John Moore for hooking us up with this via Twitter.)

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Okay, so while the Dow hangs out at around 10,000 points, here’s some advice on how to give your business a serious boost without increasing your marketing expenditures (and maybe even reducing them): “Perkonomics: Why perks and privileges are the new currency” over at TrendWatching.com (hat tip to AdPulp) is a pretty interesting take on how to increase customer loyalty and create a buzz for your brand even in tough economic times.

“What in blue blazes is perkanomics,” I hear you cry? Hold your horses there Tonto. We’re getting there. According to the folks at TrendWatching.com, perkonomics can be explained thus:

“A new breed of perks and privileges, added to brands’ regular offerings, [which satisfies] consumers’ ever-growing desire for novel forms of status and/or convenience, across all industries. The benefits for brands are equally promising: from escaping commoditization, to showing empathy in turbulent times. One to have firmly on your radar in 2009.”

Did you catch that part about escaping commoditization (not falling into the BOGO trap)? Good. Let’s continue.

TW continues with this:

“Consumer infatuation with perks and privileges isn’t new. For years, airlines, hotels, credit card companies and private banks have been cleverly rewarding their most valuable customers with surprises, status symbols and convenience.

But as we move towards a consumer society that’s based more on experiences, on status stories, on the ephemeral—and in which, for many, time is now the only true scarcity—expect perks and privileges to become an integral part of every B2C industry and sector.”

Perks you might already be familiar with: Frequent flier miles, preferred customer clubs, discount cards, special pricing, express delivery, concierge service, complementary XYZ, free upgrades, shorter checkout lines, convenient parking, etc. Essentially, the perkonomics idea takes the simple concept of “loyalty rewards” to the next step: Brand-related social elevation (however ephemeral it may be). The dot-connect end-to-end: “My loyalty to Brand ABC makes me more special than people who don’t share the same relationship with the brand.”

The result (if done right):

  • Perks bring much-needed love (if not FREE LOVE), in upturns and downturns, potentially leading to more ‘brand love’. (I hate to call it brand loyalty, but at the very least, it encourages a very strong brand preference.)
  • Perks help commodity-like industries stand out by conferring a (renewed) sense of uniqueness. Adding perks often requires the ability to partner with other products or services, so brands with the best partnering skills—and therefore access to the best exclusive offers—will win.
  • Perks can give you the leading edge when it comes to attracting first-time customers.
  • Perks can make for great if not invaluable PR [and positive WOM]; customers will tell others—perks are excellent conversation starters—while the media (trend watchers included) love a good perk story.
  • Perks can help make boring companies interesting again, and thus more desirable.
  • Perks can help cultivate more desirable brand perceptions and associations—think anything from showing you actually care about your customers (gasp!) to showing you care about the environment, offering eco-perks.

From a business opportunity standpoint, focusing on perks can absolutely give you an edge when it comes to differentiating your brand from others even if your products are not superior, and by doing so may be the only way to elevate a brand without actually making improvements outside of “delighting” loyal customers. The trick is to do it in such a way that doesn’t come across either as a ploy to get more information out of them, and two, in a way that doesn’t require them to jump through hoops. Perks are perks. If perks start to become hassles, they stop being perks. A “delight the customer” mentality and focus across all touch points is absolutely vital to the success of such a program. The second a customer expecting a perk gets the runaround from a disgruntled or less-than-ready-to-serve company brand ambassador, you’re done for. (Managing human touch points well is one of the trickiest aspects of delivering on the promise of perkonomics.)

Additionally:

PERKONOMICS is an aspirational trend; i.e. a trend that generously offers you—marketer, entrepreneur, brand manager—the chance to be a trendsetter, especially if you work in a sector or industry not yet big on perks.

And as perks are about delighting and surprising consumers, you should have no trouble coming up with a few quick ideas that can be implemented immediately and cost-efficiently. Talking about costs: as perks are an integral part of your marketing strategy, shifting a part of your mass-advertising budget to get some PERKONOMICS innovations off the ground is more than justified.

Check out the entire report here. And please, please, please, when you start looking into ways to incorporate some of these ideas into your marketing plan, don’t end up settling for 5% discount coupons and dime-store “prizes” with your logo printed on them. (Trade show giveaway pens, decals and buttons don’t even come close to perks.) Take this as seriously as you take the success of your brand.

If you need help figuring out how to do this, give me a call or shoot me an email. I’ll be happy to help or hook you up with someone who can.

Have a great Tuesday!

Photo by Chris Wray-McCann

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The commoditization of everything is turning the US into a 2nd world country.

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