I shaved this morning thinking about “commodity hell.”
That’s when a market for a product is so crowded, every product is virtually the same. Interchangeable with the competition. And the only way to get ahead is to slash prices until the pain of profit loss squeezes either you or those competitors out of the business.
This is not a position, generally, you want to fall into. But it happens. Sometimes, to the (once) best of them. If only because once you succeed on a grand scale, imitation naturally follows. It’s the slippery slope of success.
In an old New Yorker — June 15, 1998 — writer James Surowiecki talks about how one company, Gillette, managed to beat the slide. There are, says the article, two ways companies generally protect themselves. One is via advertising. The bigger your position in the prospect’s psyche, the slower the evolution from market leader to mere commodity.
Gillette did this in the mid ’80s, with a heavy focus on advertising. And it worked. But advertising is basically laurel-padding. And laurels only stay fresh so long. Other razor companies had new products in the pipeline.
So Gillette had to focus on the staple of cutting-edge competition: product innovation.
Enormous research and testing went into binding a substance called “DLC” (for “diamond-like carbon”) to steel. The result was a blade 3-4 times stronger than plain steel that was both thinner and sharper.
Where other razors had two blades, Gillette added three. Engineers had to watch “Terminator 2” to visualize the chrome-coated design. Marketing whittled over 100 different name choices down to four. And then one — the Mach 3.
Gillette sold $2.9 billion worth of blades in a single year. The Mach 3 is far and away the industry leader. I use one. There’s a chance you do too.
When you’ve got a product that’s hard to differentiate, think of the Gillette story.
Is your product newer and better than all the rest? How well is that emphasized in the advertising?
And if the advertising is pulling its weight, is there a way you could innovate or update the product?
Simple thoughts. But if it’s good enough for a giant like Gillette… well, you get the picture.
Last modified: December 18, 2018