Why the 'Better Than' Competitive Strategy Doesn't Work

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You know the kid's game. Rock (fist) breaks scissors. Scissors (two fingers) cuts paper. Paper (flat hand) covers rock.

So what's the best strategy in a game of rock/scissors/paper? The answer is obvious:

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It all depends on what strategy the other kid uses.

Competing with No. 1
So, too, in marketing. Your best strategy often depends on what strategy your competition is using. This is especially true if you are trying to compete with a No. 1 brand, perhaps the most difficult job in marketing.

Take Pepsi-Cola. How does the brand compete with No. 1 Coca-Cola?

Be the opposite. Coca-Cola is widely perceived to be the "real thing," the authentic brand, the long-time market leader. So how does Pepsi-Cola become the opposite of the real thing?

"The imitation cola" is not going to cut it. Pepsi had to look a little deeper into the situation. Coke is also perceived to be a brand that has been around for a long time. (Actually 117 years). It's the cola your parents drank.

So Pepsi became the cola for the younger crowd -- "The Pepsi Generation."

A successful strategy
Over the years, the Pepsi Generation is the only advertising strategy that has substantially moved the needle. And aside from a technological breakthrough, the only strategy that is ever likely to move the needle.

Be the opposite is a marketing strategy that can work for any brand in any product category. How did Lowe's, for example, manage to make substantial progress against market leader Home Depot?

Home Depot is the leading home-improvement warehouse chain. But Home Depot is also a messy place originally designed that way in part to attract men.

So Lowe's made a special effort to be neat and clean with wide aisles and brighter lighting. A place that was particularly attractive to women and in the process became the fastest-growing home improvement chain.

Caught in the middle
Wal-Mart is the world's largest retailer with extremely low prices and a slightly downscale clientele. So Target went slightly upscale with a focus on good design. The theme: "Cheap chic." Trapped in the mushy middle was Kmart, a company that went bankrupt.

Notice what Kmart tried to do. First they went after Wal-Mart by cutting prices, but that didn't work. Then they went after Target by doing a deal with Martha Stewart and other designers. Nether strategy was likely to work because the strategies were based on a "better than" approach rather than an "be the opposite" approach.

Dell Computer became the world's largest seller of personal computers by choosing a distribution channel (direct by phone) that was the opposite of the computer retail stores used by its competitors.

Montblanc marketed "fat" pens when its major competitor (Cross) was focused on selling "thin" pens.

Gold clubs and tennis racquets
Callaway became the leading golf club company by marketing "over-sized" clubs when its major competitors were selling regular-sized golf clubs. Prince became the leading tennis racquet company by marketing over-sized racquets when its major competitors were selling regular-sized racquets.

And so it goes.

Years ago, we tried to get Burger King to become the opposite of McDonald's with absolutely no success.

What's a McDonald's? It's a place for the younger crowd, especially kids between the ages of 2 and 6 who are attracted to Ronald McDonald, the Happy Meals and the swings and slides.

"Grow up to the flame-broiled taste of Burger King" was the theme we suggested. The idea was to position Burger King as the place for grown-up kids who had outgrown Happy Meals and the swings and slides.

Don't 'outdo' the competition
As it happened, Burger King followed the Kmart strategy of trying to outdo the competition rather than being the opposite of the competition. Bigger playgrounds and better kids meals were just some of the "better than" strategies employed by Burger King.

Needless to say, the "better than" strategies were mostly failures and a parade of CEOs have come and gone as Burger King tries to find a winning strategy to compete with the Golden Arches.

The numbers tell the story. The average McDonald's unit in the U.S. did $1,527,300 in sales last year. The average Burger King unit did $1,030,700. (McDonald's has an overwhelming 48% lead.)

If your brand is not the leading brand in your category and if your brand is not the opposite of the leader, then your brand is headed for trouble.

Think Kmart and Burger King.

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