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Category: Business and Industry

Date Submitted: 11/27/2012 07:17 AM

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Rule #1: Functionally satisfy at least the minimum; emotionally satisfy the maximum. If functional needs satisfaction were the true differentiator of top brands and survival brands, Coke would not be an Alpha-Pepsi clearly proved that it was preferred in blind taste tests. To work toward becoming an Alpha, companies must meet at least minimum functional needs and provide higher levels of satisfaction and significance than the competitors. They must make customers feel smart, appreciated, more attractive, more respected, and/or more fulfilled.

Rule #2: Don't compete on price. Alpha companies don't gain or maintain their Alpha status based on price alone. In fact, they compete less of price than their competitors do. Don't get confused about the importance of price. Price is the final value judgment customers make-it is the conclusion they create based on weighing all of the benefits a product or brand seems to offer.

Rule #3: Drive expectations. Companies must differentiate their brand not by what it does, but by what it makes customers want. If the company can satisfy those things better than anyone else and at a higher level of emotional needs satisfaction, it then generate controlling influence with customers and competitors. The company that can drive expectations-among customers, distributors, and/or referral agents-to the highest level has the greatest immediate influence in the marketplace.

Rule #4: Measure causes over outcomes. Measuring and comparing sales, profits, market share, brand awareness, stock prices, margins, or any of the other outcomes that businesses spend so much time worrying over only clouds the focus on the causes that drive those desired outcomes. It is far more productive to understand the company's performance in terms of causal factors, such as perceived satisfaction of needs (especially self-satisfaction and personal significance), than in terms of final outcomes. The list is long, but other key causal factors driving revenue...