Philosophical approach to economic recovery

Does the long and winding road to economic recovery lie with creating new and uncontested market space or simply ‘doing it better’?

For well over a year now, we marketers have been busy just surviving. But soon, the first round of recovery strategy workshops will be upon us. Which academic marketing theory will frame the debate in those stuffy rooms along the M4 corridor? Which thinker’s model will fill every flipchart in the land?

The answer may come down to your view of how best your brand can create competitive advantage at this point of the economic cycle.
Back in the days of irrational exuberance, Chan Kim and Renee Mauborgne’s Blue Ocean strategy argued that the key to lasting success was to create uncontested market space. The aim was to “make the competition irrelevant”, they said.

Don’t compete within your category, they argued. Instead, create a new one. Carlos Ghosn of Nissan was an early acolyte. In the world of communications, Jean-Marie Dru of TBWA ploughed a similar intellectual furrow with his philosophy of disruption.

However, there’s another theory that may win more converts in this post-traumatic age. In their 2005 book Simply Better, Patrick Barwise and Sean Meehan argue that the key to creating lasting differentiation is not to create a new category, but to deliver the generic benefits of your current category better than the competition.

For many of us, there is something inherently appealing in the Blue Ocean position. It casts the marketer as a revolutionary, an iconoclast. Wouldn’t we all like to be Steve Jobs of Apple, reframing computers as “tools for creative people” and thus enabling a manufacturer of little grey boxes to carve out a healthy slice of the music publishing industry?

From an agency perspective, it’s easier to excite a client with a Blue Ocean strategy than a Simply Better plan. Being disruptive is sexy. It’s for alpha minds. “Just being better” sounds dull and hard, like that desultory school report comment “could try harder”. If Blue Ocean is a two-week leadership retreat in California, Simply Better is double maths on a rainy Wednesday morning at a Black Country grammar school.

Any academic philosophy which has “focus on the big picture, not the numbers” as one of its six key principles is going to win followers in our profession. (And before I am accused of caricature, I should point out that Kim and Mauborgne advocate business modelling and risk management as key steps in any Blue Ocean strategy.)

It’s possible to argue that the recession makes disruptive Blue Ocean thinking not just helpful, but essential. Tectonic plates have shifted – Waitrose has an Essentials range and GM Europe is now owned by a bunch of people you last came across making small arms for the Austro-Hungarian Empire. In this world of topsy-turveydom, one could reason that category boundaries are in flux. Now is the perfect time, while media prices are still depressed, to reach beyond existing demand and win a greater share of the future. Fortune favours the bold, and all that.

As a guide to action, Simply Better lacks the audacity of Blue Ocean. You are asked to start by considering what customers really want from your category. Market research looms large, with an emphasis on the numbers.

But it’s when you consider its practical application that the true audacity of Simply Better shines through. Think about the pains that Lexus took to get inside the heads of US luxury car buyers. And the single-mindedness with which the brand went about meeting those needs better than the established competition. Stories like that cast the marketer in a role every bit as heroic as the Blue Ocean revolutionary.

Both Blue Ocean and Simply Better are viable approaches to marketing strategy. More than that, I consider them two of the most influential and stimulating marketing philosophies of the past ten years. But which school of thought is the most useful guide to the marketer in this troubled age? I would advocate Simply Better, for three reasons.

The first is that in every focus group I have attended in the past year, one sentiment has been voiced more stridently and more consistently than all the rest – the apparently incontrovertible view that “nothing does what it’s supposed to do any more”. Banks don’t keep your money safe, insurance doesn’t insure and fast food isn’t actually that fast.

Yes, the recession has probably created exciting opportunities for brands to re-invent their categories. But there can be little doubt that it has also created large segments of customers whose core needs from those categories are no longer being met. This is especially true of brands in the service sector, where the gap between promise and delivery has been stretched by cost-paring.

The next reason why Simply Better gets my vote is that it has never been easier to find out what consumers really want from your category. And I’m not just talking about the softness of prices in the market research industry. Online research, both quantitative and qualitative, provides marketers with access to insight that was unimaginable at the cusp of previous recoveries.

The final reason why Simply Better is my “official philosophy of the recovery” is this. The recession has brought about more creative destruction than most of us would care to experience for at least another decade. Or two. In putting the pieces back together, brands have the opportunity to rethink the way they gather insights, develop products and deliver services. Never has there been a better opportunity to retool the organisation to deliver what matters most to customers.

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