The Quality Trap

By Al Ries

Why do most companies base their entire selling strategy on building a better product or service? Because everybody knows the better product or service will win in the marketplace.

This is the quality axiom, the basic belief of business people today.

But what happens when you tell prospects your product is better? If you could pry open the prospect’s mind, would you be surprised if he or she was thinking, "That’s what they all say?" I don’t think so. Everybody says their product or service is better.

What happens when you tell prospects that your product is the leader? What happens when Goodyear says: "No. l in tires? "When Heineken says: "The largest selling imported beer?" When Heinz says: "America’s favorite ketchup?"

If you could pry open the prospect’s mind, would you be surprised if he or she was thinking, "They must be better?" I don’t think so.

Why is Goodyear No. 1 in tires? Why is Heineken the largest selling imported beer? Why is Heinz America’s favorite ketchup?

They must be better. Because everybody knows the better product or service will win in the marketplace. This is the quality axiom.

If quality claims are meaningless and leadership postures are powerful, why do so few companies bother to advertise their leadership?

Research. They ask customers why they buy a given brand. And you know what? The typical customer goes out of their way to tell the researchers,

"I never buy a brand because it’s the leader."

Then why do you buy the leading brand? "I buy it because it’s better." Because everybody knows . . .

Wait a minute, you might be thinking. If that’s true why don’t the leading brands have 100 percent of their markets?

Price. A customer might think Heinz is the better ketchup, but buys Hunt’s because it’s cheaper.

So ingrained is this perception that less-than-leading brands are cheaper that many customers think the No. 2 brand is cheaper even when it’s not. Most people believe Avis is cheaper than Hertz. And MCI is cheaper than AT&T. Even though they’re not.

This perception assures business for lessor brands in the face of the widely held perception that the leading brand is better.

Some customers, of course, assume the leading brand is marginally better, but don’t care. They’ll buy almost any name brand, because "they’re all about the same."

If these perceptions about customer behavior are correct, then what conclusions can be drawn for marketers?

If you want to do effective advertising, if you want to make a productive sales call, forget about product features, customer benefits, striking visuals, celebrity endorsers and concentrate your efforts on dealing with the one critical issue in marketing: The quality axiom.

You must frame your message so that the prospect can maintain the illusion that the better product or service wins in the marketplace.

The basic strategy is do this is to "narrow the focus." When you narrow the focus, you become a specialist or leader in a segment of the market. In essence you create the perception that you have the better product or service . . . in your category.

Federal Express tried to compete with market leader Emery Air Freight by offering three classes of service, all at lower rates. When this approach proved unsuccessful, they narrowed the focus to "overnight" delivery. And virtually overnight FedEx became the dominant player . . . in the overnight category.

Domino’s original menu included large pizzas, personal pizzas and submarine sandwiches. Then they narrowed the focus to home delivery of large pizzas only. And Domino’s Pizza became the dominant player . . . in the home delivery category.

Little Caesars’ original menu included pizza, fried fish and broasted chicken. Then they narrowed the focus to take-out pizza only and became the dominant player . . . in the take-out category.

Charles Lazarus started with one store, Children’s Supermart, that sold two kinds of merchandise: children’s furniture and toys.

The conventional way to grow would have to been to add other products (bicycles, diapers, clothing, baby food.) Instead Lazarus dropped the children’s furniture, and narrowed the focus to toys only, in the process changing the name of the store to Toys "R" Us. They became the dominant player . . . in the toy category.

Instead of narrowing the focus, most companies do just the opposite. They broaden their lines, broaden their target markets, broaden their price ranges until their brands lose all their meaning in the minds of the prospects.

What’s a Chevrolet? A large, small, cheap, expensive car. No wonder Chevrolet has lost its leadership to Ford.

What’s an Oldsmobile? This GM division is spending $150 million on five separate advertising programs. That’s roughly $30 million each to advertise Intrigue sedans, Cutlass sedans, Aurora sedans, Bravado sport utilities and Silhouette minivans.

What’s an Oldsmobile? A small/medium/large sedan, minivan, sport utility vehicle.

What’s a Saturn? Saturn is the only car brand in America that sells just one model, which you can have in two doors or four doors or in a station wagon version. Yet the average Saturn dealer sells more cars than any other automotive dealer. (Last year the average Saturn dealer sold 776 cars versus 237 cars for the average Chevrolet dealer.)

So what is Saturn doing about that? They are coming out with a second model, the Saturn Innovate.

You want to build quality into your product or service? Fine. But don’t count on product quality as the way to capture the customer’s pocketbook.

You win, not by building a quality product, but by building a better quality perception in the mind. And you do this by narrowing the focus in order to become the leader in a segment of the market.

The leader always has the better quality product or service. Because everybody knows . . .