Yi Zhu

Challenging a ‘Marketing 101’ Adage

Monday, February 26, 2018

You’re standing in front of a store’s beer cooler, surveying the available options. While trying to settle on which craft beer to buy, you can’t help but notice how many prominently tout their brewing locations.

Why is this such a common marketing ploy? Assistant Professor Yi Zhu wondered exactly that—and questioned whether it was actually a mistake.

“Conventional wisdom tells us if you want to be successful on the market, you want to make your product as different from your competitor’s. That’s a ‘Marketing 101’ kind of principle,” Zhu says. “What we learned from this study is, actually, that’s (only) partially true.”

In his research, Zhu found there are times when it makes sense for a brand to emphasize the same attribute as a rival, rather than introducing a new trait.

When it comes to making purchasing decisions, consumers have limited time and attention to assess their options. By marketing a distinct dimension of a product, Zhu says marketers may unintentionally cause what he calls the “dilution effect.”

“By introducing more dimensions, more product attributes for consumers to evaluate among competing products, consumers’ attention gets diluted and they will pay less attention to each product attribute,” he explains.

“As a result, the diluted attention leads to less perceived differentiation among products,” which can force both companies to lower their prices.

So when should companies follow the suit of a competitor? And when should they go in a different direction?

Zhu says if a brand is a clear-cut winner in a particular attribute—lifestyle or quality of ingredients, for example—then it should maintain its focus on that trait. But if it’s in a more competitive situation and consumers’ attention is not fully devoted to the choice, then concentrating on the same dimension as a rival becomes a sensible tactic.

Zhu points to Nestlé’s strategy in branding its bottled water as Pure Life and highlighting its purification process. Evian, a stalwart in the market, has long promoted the purity of its product, which comes from the French Alps. Yet Pure Life has carved out roughly a 30 percent market share.

“Consumers are very busy. They cannot remember everything,” he says. “So you need to make your message simple, but that means you cannot emphasize too many things.”

You only have 24 hours a day, seven days a week. You cannot spend infinite amount of time thinking about, evaluating all the products based on all the features, all the attributes. So you have to split your attention across them.