10 Ways to Beat Competition: Way 5 – Using Product/Service Variety
Variety is the spice of life they say, but in business variety is more than the spice it is the life of business. To stay in business and ahead of competition your business must be able to meet the needs of most of the different categories of customers. According to texts, customers can be classified into as much as 10 different categories but in reality, customers are just normal everyday people with impulses to buy based on;
- Needs: People buy product or services they think they require, whether other people agree with the fact that they need such product/service is secondary.
- Price: Even after someone agrees that he/she needs a particular product/service, he/she still has to consider, if such product/service is affordable. A rational customer would buy only what he/she can afford, whether as a one off payment or installment.
- Preference: After a customer has decided he/she can afford a product/service, the customer then would want to go for what appeals to him/her from the available options. What is considered for product includes colour, fragrance, ingredients’, quality, quantity etc, while for service it includes location, time, quality of service, convenience etc.
To stay ahead of competition, even though you cannot totally influence what people need (advertising may stimulate it though), you can make your product or service satisfy a chunk of the customer categories. In a study carried out by Itamar Simonson et al 2006, titled, ‘The influence of product variety on brand perception and choice’, amongst other results, it was observed that the brands offering increased compatible variety were perceived by customers as having higher quality and thus have greater share of the choice brand market even amongst identical options (competition).
There are two major ways of doing this:
- Product/Service Price Variation: This is quite different from price discrimination, in this case what the business does is to make different sizes or packages for different price categories. Examples are DSTV bouquets, sizes and prices of soft drinks, sizes and prices of HP laptops, quality and prices of Tecno devices etc. The idea here is to have sizes/quality of products that satisfy the price the different categories of customers can afford. A makeup artiste, for example, can have different make up products for different types of packages; Avon products might be #100,000 for a wedding package while Trya Beauty might be #60,000 for a wedding package. This way you don’t lose customers to competition because you have varieties that cover almost every customer.
- Product/Service Appeal Variation: You may not be able to cover what appeals to all customers but a good business should be able to cover what appeals to majority of the customers. Examples include different varieties of coca cola products, different colours of products from the same manufacturer, different fragrances of same product by soap making companies, while for services you have banks having two branches in same location, some salons having both male and female stylist for customer to choose from, apps with different background colours from same developer etc. Note that the price is still the same but the focus is on the preference of the customers, at that same price. If your customers are assured that they can get varieties from you, they won’t have any reason to want to try out competitor’s product.
What every customer wants first is to satisfy their need in the most affordable way without necessarily sacrificing their preference. Henry Ford was once quoted to have said, ‘a customer can have a car painted any colour he wants as long as it is black’ but in reality when he made his Model T that same year, he made it available in different colours including black. Customer will not sacrifice what they desire on the altar of loyalty, if you as a business person wants to keep your customers away from competition then you must provide them with varieties.
Giving customers everything they need might keep them loyal but for how long can this go before competition finds a way to penetrate? I implore you to stay tuned to what comes next on 10 Ways to Beat Competition way 6.