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Two words that Killed Differentiation

Two words that Killed Differentiation

Benchmarking and Best Practices

I worked for a consumer goods company as a brand manager. Our haircare division made some of the best shampoos and conditioners in the world. Competition was severe, especially from another brand which had some compelling brand properties. Our brand took up a study of what this competition brand was doing in the marketplace. A detailed study was launched to understand how the competition was branding, communicating, packaging, distributing and incentivizing the supply chain. The study which lasted over 6 months had some interesting lessons on what the brand was doing better (significantly on some counts) that our brand. I could see a heightened activity in the Haircare department since this study was presented to the managers of the products. I could see a new sense of purpose amongst everyone. Packaging experts bought 100’s of competing packs and dissected them. Brand managers would look at all forms of communication, pricing, promotions that were in the market. Advertising agency folks would stay up all night to conceptualize the next campaign and the ‘box-on-the-face-of-the-competition’. And so on…

And what emerged was a new look approach to how our brand would be relaunched. We waited with baited breath. In a company which had many superb marketing minds, the haircare team had some of the best minds. The anxiety and curiosity in every body’s minds was palpable days before the launch. Then it happened…

The business managers revealed the new plan. New product composition, packaging, messaging, media plan, a penetrative pricing, a new TV commercial. Everything was new. But wait a minute…on closer look it did not really look like a ‘New’ product. It was actually IDENTICAL to the competition brand. On a departmental store, you could hardly make out the difference. The pricing was identical too. The distribution model was different though as traditional supply chains ‘could not be disturbed for one brand’. The realization soon dawned on everyone that the ‘New’ brand was not really new. There was panic all over and the grand postmortem started.

I do not believe that the managers of the brand re-launched it with the idea of copying the competition and make their brand a me-too. These guys were just too smart for that. Nor that they were short of ideas. They had so many of them…I heard them during lunches and water cooler discussions. How come such a smart team which had this historic to recreate a brand and make it a market leader by making it starkly different, did just the opposite. What went wrong?

Management lexicon has two killers: Benchmarking and Best Practices. These two innocent words with no intention of and unaware of the damage they create on the psyche of managers are deadliest killers. We are all aware that the really purpose of benchmarking a business with competition with an intention to learn the what it does best is a great learning opportunity. The puritan purpose of these two exercises is not least to copy competition. But they also make competition larger than life at an extreme killing self-confidence within the company. Competition becomes the new benchmark. Matching competition becomes the new business mantra and then…anybody’s guess.

A strange fall out of the haircare brand relaunch happened. The competition observed that the new relaunch was remarkable to it’s own offering. Probably seeing this as an endorsement of it’s efforts, competition did not evolve their offerings for many years. In an industry where a relaunch was common every 3 years, the brand did nothing for over 10 years. Today, on the departmental store shelfs the two competing brands continue to look remarkably similar!

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