2007: The Year of Differentiation
It may seem oxymoronic to say that differentiation will be an overriding trend for 2007. But what companies will have in common in the coming year is the need to set themselves apart from the competition. Here are some of the ways to do that:
* Services proliferation. Technology and the improved ability and desire to serve customers on a customized, one-to-one basis, coupled with the increasing lack of ability to differentiate services in the marketplace, means that marketers will put a greater emphasis on adding new services. The idea is that if you can’t make the service different, differentiate yourself by offering more services.
* Brand China. The explosion of Chinese manufacturing is not news. Until now, however, Chinese manufacturing has primarily been a behind-the-scenes affair; products created in China were then sold under established brands. This will change as the U.S. market sees the entrance of new Chinese brands that will take on established competitors. The case of computer manufacturer Lenovo provides illumination here. That company has come out from behind its IBM ThinkPad manufacturing deal and in a relatively short time established itself on the PC scene.
* Time to get specific. A few years ago, on the advice of marketers, companies focused on simple messages about their point of difference. This went a bit too far; everyone from Fortune 500 tech companies to your local plumber promised vagaries such as “innovative solutions.” This sort of oversimplification may work if you sell particularly inventive products, but if you’re like most companies, 2007 will be the year of getting more specific. Customers will be increasingly focused on the details of offerings and how they deliver value–especially if the economy takes a turn for the worse.
* Populist marketing. Immigration, the trade deficit, a potential shakeup of the housing market, and the war in Iraq will be cause for a resurgence of populist sentiment throughout the country. American advertisers will jump on this bandwagon and attempt to differentiate their products with a “made in the USA” theme.
* RFID me. Consumers will see more applications of RFID technology in everyday products. We’ve already been using RFID to pay highway tolls for years; this sort of application will become much more common as banks and credit-card companies push “contactless” payment cards for everyday purchases.
* The new global consumer. The further globalization of the world economy and the expansion of economies in China and India are creating a new global middle class, which will provide a fertile new market for media, technology, electronics, healthcare, and automotive products.
* The death of spam. Spam will begin a sharp decline. With the ongoing improvement of filtering software coupled with ever increasing sophistication of the average Internet user, spam has hit its tipping point.
* Organic backlash. The obsession with organic foods will ebb as people question the environmental costs. Take Whole Foods’ New Zealand organic apples: Is it really environmentally responsible to fly an apple halfway around the world? Many will begin to question the supremacy of organic and will rather focus on “local” foods.
* It’s too easy being green. With companies touting hybrid cars (Toyota Prius, et. al.), ecologically friendly packaging (Procter & Gamble), and free disposal of old computers (Apple), to name just a few, “green” will get old fast in 2007. Companies will need to look for ways to differentiate their green-ness by basing it in some unique truth that competitors cannot match. We’ll see more marketing tied to community–the place from which products and services come or in which they will be used. With Google Earth already reemphasizing the link of a business to its location, we’ll see companies do more to ground themselves in green.
Thomas Ordahl, Michael Megalli, Michael Cucka, and Todd Merriman are the leading forces at Group 1066, a New York-based strategic marketing firm.
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