Getting Customers to Choose You in a Commodity Market

Differentiating your business in a crowded marketplace where your and your competitors’ products are very much alike, if not the same, remains one of today’s biggest marketing challenges. 

Technology-based products and services are no exception.  As technologies mature, core product performance and features that once provided clear competitive differentiation become largely comparable from product to product.  When one examines the array of products currently available in cell phones and PCs, for example, slam-dunk choices are rare.  Service products, from web site hosting to software installation and integration, are no different.   What’s more, this evolution toward product parity appears to be accelerating with each succeeding product generation.

The answer to this phenomenon lies with a well-known cornerstone principle of marketing:  whole product.  Simply defined, “whole product” is the basic product or service for sale, plus every additional attribute, service or even relationship needed for customers to realize a complete solution to their problem or application.  Put another way, whole product fills the gap between the marketing promise made to the customer and the ability of the product to fulfill that promise.

The implications are clear.  To compete effectively, you must constantly add to the richness and completeness of customer satisfaction with your product or service.  Companies like Dell Computer and Nordstrom’s have become leaders by placing great emphasis on whole product.  They continually seek out and experiment with innovative ways to delight customers with more than just basic products.

Frequently, however, companies can also make a real difference in their markets by simply delivering on the obvious fundamentals of whole product.  Consider, for starters, prompt, effective, courteous customer service.  How many companies do we all know that regularly contradict lofty pledges of great customer care with service that can better be described as wretched?  Many industries need look no further than customer service to discover an opportunity to outshine the competition.  Many similar opportunities exist:  increased, individualized product choices and configurations, easy ordering, rapid delivery, installation, training, and much more.

Even so, some companies in highly competitive markets – IT professional services, for example – appear to have exhausted all the possibilities.  Well over a hundred such IT firms operate in the DFW area alone.  To win customers, many seem to promote every whole product claim imaginable.  But in attempting to address every conceivable customer desire, they all begin to look alike from the customer’s perspective. 

The appropriate strategy for companies in markets filled with such claims and counterclaims is one that unfortunately few choose to adopt.  That strategy involves focusing on a specific market, industry or set of applications and providing superior whole product to that segment.  The job of actually meeting whole product promises is both expensive and resource-intensive.  Even the largest companies can succeed at it in only a few markets.  That spells opportunity for the smaller company that can select and address a segment that competitors have either ignored or are underserving from a whole product perspective.

But in doing so, most companies recognize that they too are somewhat if not severely resource-constrained.  Thus they also face the questions of which whole product elements to provide, and in which order.  Very often those choices are made almost arbitrarily, reflecting little if any fact-finding or strategic analysis.  Obviously, such choices have only random chances of success. 

by James R. Helbig as published in ICCB

9/19/2000