Marketing Guru Talks About Differentiation
"Find your difference and use it as a benefit to your customer," Trout said. "Make sure your message makes sense and that you have the credentials to back up your claim of being different - and communicate your difference!"
Trout, who began his career in the advertising department of General Electric before moving on to Uniroyal and joining Al Ries in an advertising agency, mapped out some strategies for competitive marketing.
Familiar Case Studies
Trout spoke about being the marketing leader and how many companies in this position are always on the defensive, ready to attack and make strong competitive moves when necessary.He talked about Gillette, the maker of razor blades. He said Gillette was constantly attacking itself to improve the company's market position.
Trout noted Gillette kept changing razor blade models, which was done to promote its next generation of razors while undermining its current models. One of the company's strategies was to fend off competition from Bic, which had introduced a new disposable razor.
"They [Gillette] didn't want to make disposables but they wanted to block Bic and become the market leader with their Good News disposables," he said. "They were successful, although they didn't make any money on the razor blades."
Trout said that leaders, like Gillette, may have a weakness, which could be exploited by a competitor. He cited the example of a bottled water maker who owned the largest share of its market but whose water had high sodium content. Its competitor decided to attack this fact by advertising that its product was low sodium.
"Create a point of superiority by simply using what you have," he suggested.
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He said that some market leaders get away from what makes them successful by trying to do too much, moving away from a niche market. He used the Volkswagen example.
For many years Volkswagen captured a significant share of the compact car market with its only model, the Beetle. But Volkswagen abandoned its strategy of being different by offering other larger models. Now they were competing with car companies that featured similar models. Their market share and sales declined.
It was only when the company reintroduced a new Beetle in the late 90s that the downward sales trends were reversed and Volkswagen enjoyed an uptick in sales.
"You have to eventually become one thing," Trout said. "You can't sell everything to everybody."
He also gave the example of Marlboro cigarettes, whose symbol was a rough-and-tough cowboy. Marlboro decided to introduce "mediums," menthols, and "ultra-lights" to the market. These new brands were confusing to consumers because Marlboro cowboys are only associated with the original brand.
"You can't keep changing who you are," he said. "If you move with the marketplace you change who you are."
Trout used White Castle as an example of a business that has done very little to change its products for decades and still has remained successful. He summed up his presentation by telling contractors to:
"Don't lead people to a place you don't want to go," Trout concluded. "No one will follow you if you don't know where you are going."
Sidebar: VenVest Introduces UWIN
In an effort to provide an extra marketing tool to its members and to nonmembers in the mechanical trades, VenVest introduced a new concept to its members at the AirTime 500 Fall Expo in Nashville.877-655-UWINâ„¢ was rolled out for the first time. 877-655-UWIN is a consumer advocacy organization that provides consumers with current information, assistance, resolution, and reparations concerning their transactions with home service companies. All of the participating service companies are required to sign a code of ethics, provide quality of work guarantees, and post bonds of at least $20,000 for dispute resolution.
Jim Abrams, president and CEO of VenVest, explained the benefits of being a UWIN contractor. "Being a participant shows the customer that they cannot possibly lose," he said. "This opportunity is intended for those of us who exercise the best business practices."
When a customer calls 877-655-UWIN or visits the Web site www.877655UWIN.com, he or she can get current information on a service company, including number of annual service transactions (based on past 12 months), number of disputes resolved in the past 12 months, percentage resolved by service company, number resolved by UWIN, and dollar amount reserved for future resolution. Visitors will be able to enter comments, too.
Disputes will be resolved in the following manner:
1. Service company contacted first.
2. Once UWIN enters dispute, service company has 48 hours to resolve it at the local level.
3. If consumer satisfaction is not reached, UWIN refunds customer's full expense.
The idea is to assure the customer - before they enter into a purchase agreement - that they are dealing with a reputable and reliable business, and that any disputes will be resolved in their favor.
Service companies will need to agree to a number of terms, including using UWIN logos on all invoices and company literature, signage, advertising, etc.; if state law allows, conduct background checks on employees including periodic drug testing; post necessary cash or insurance bonds (average $400 for $20,000 bond); and accept that all disputes will be resolved in the customer's favor.
"This is built as a true protection for our own businesses," added Abrams. "There are no smoke and mirrors. This is a true offer to consumers.
"UWIN exists to serve members and homeowners. Customers will have a high level of assurance that they are dealing with a reputable business."
For more information, visit www.venvestinc.com.
Publication date: 10/18/2004
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