Fire Tribe Explores Product Differentiation
Last week, the Fire Enterprises, Inc. (FEI) tribe discovered the importance of mainstream media appearances as part of a public relations strategy for fire companies and fire company leaders. This week, the tribe shifts chariot gears with a discussion on the importance of creating product differentiation. Remember, fire = print.
Marka and new product guru Lucy were hanging out at the Red Argus when Brandy the bartender approached them.
“Why not try our new Grog Lite?” Brandy suggested. “It has fewer calories and still tastes like greatness! Drink it and you’ll feel like a young Olympian again.”
“That’s some product,” Marka said. “What’s in it?”
Brandy shrugged. “It tastes the same as Grog Classic, but is somehow less filling. Those grog scientists do some amazing things!”
“I’ll take one,” Marka said.
“Me too,” Lucy stated, then turning Marka added, “Grog Lite offers something different. That’s why it’s selling well. Because so many grogs sit in your stomach like cement, Grog Lite’s airy taste creates differentiation for it within the grog market.”
“And any product we develop should offer market differentiation as well?” Marka asked.
“Differentiation is the only way to keep each of our fire products from becoming commodities,” Lucy said.
“What if our original brand of Fire already is a commodity?” Marka pressed, raising a hairy straw-colored eyebrow.
“We can still create differentiation for ourselves,” Lucy asserted. “Zeus knows other businesses have.”
“How?” Marka enquired.
“Chariot fueling stations are big time commodities,” Lucy explained. “So the different brands distinguish themselves by meeting a very specific need within their crowded market. Hermes offers free ‘hoof massages’ for chariot-leading horses. Pilot has ‘the cleanest troughs in Olympus.’ You get the picture.”
“I think I finally get this differentiation business,” Marka declared.
“Well, I’m glad you’re on board,” replied Lucy, smiling at her friend. “Any new products must be developed with a differentiated aspect. Products created without differentiation will suffer from market devaluation. If you offer the consumer something they can get anywhere, why should they pay more than the bare minimum?”
“What’s the next step in our product strategy discussion?” Marka asked.
“Tomorrow we’ll discover new market needs—for both current and future products. I want the whole team in on this discussion,” Lucy divulged.
“We’ll be waiting,” Marka said enthusiastically.
Today’s FIRE! Point:
New products must be developed with a differentiated aspect. Products created without differentiation will suffer from market devaluation. When a devalued product reaches commodity status, high cost of sales and low profits become business realities. Figuring out product differentiation isn’t as easy as it sounds. Companies creating new product entries must identify viable markets for new products and discover their complete business profile and current market positions.
FIRE! in Action:
Qbic Thinks Inside the Box to Create Product Differentiation
The company’s “To-go” hotel offers a differentiated vacation experience: It can be set up in an existing room, with customized controls that allow guests to change room colors and themes. Guests appreciate the style and economy, as Qbic has already opened two new locations.
Next week: The tribe continues product talk with a discussion on discovering marketplace need for products.