NextStage Evolution Research Brief – The Importance of Brand as it Relates to Product v Feature Diversity and MarketShare

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Basis:

This publication reports on an ongoing (sixteen years to date) study of market fluctuations due to decreases in product/service versus feature diversity resulting in increased marketshare.

Background:

Markets arise under two conditions:

  • Products or services are developed that meet a specific need within a given population
  • Existing products or services are redefined or modified to meet the expectations within a given population

Emerging markets move from need-based to expectation-based in direct relation to the spread of product/service information within the given population. Note that this replaces the “adopter” model with a social contagion model — markets increase proportionally to the information level within a market. Early adopters are individuals who require minimal social information about a product/service, late adopters are those who require maximal social information in order to become market members.

Markets establish themselves when multiple vendors recognize possible revenue sources and expend resources to first enter then maintain marketshare. Traditionally market establishment followed an organic dispersement model due to minimal channels (information transmission vectors). The past sixteen years has seen an explosion of channels.

The traditional model dictates that the vendor able to saturate a market's chosen channels will claim more marketshare. However, channels are proliferating with the end result that vendors must create their own channels to insure controlled information dispersion.

The social contagion model dictates that an uncontrollable information exchange be met with decreased marketshare and decreased product/service diversity while proliferating features and brands to meet consumers at different social contagion levels within the market population.

Objective:

To determine if branding concepts, product/service or feature diversity is more adept at establishing marketshare in socially engaged markets.

Method:

Eleven markets (agri, auto, construction, home electronics, personal apparel, personal communications, pharma, real estate, recreation, sports, travel) were observed from Jan 1995 to Jan 2011. Analysis was done on vendors in those markets, messaging, market reach, marketshare, channeling, brand imaging and management shifts.

Results:

  • Brand allure continues to play a role in marketshare
  • However brand allure is rapidly giving way to feature diversity (the brand that supports the largest feature set wins)
  • Feature diversity is becoming the new standard for opening markets and increasing marketshare, especially when features are tailored to a given market
  • Feature diversity benefits are increasingly communicated socially rather than through “traditional” channels
  • Product/service diversity benefits are decreasingly communicated socially although they maintain their place in “traditional” channels

Key TakeAways:

  • Brands able to demonstrate the greatest feature diversity within a market will maintain the greatest share of that market moving forward
  • Emerging markets will best be captured/maintained by products/services that are app enhanceable rather than those coming with a diversity of built-in features
  • There will be an increasing move to “app platform” devices as feature diversity moves from “what x can do out of the box” to “tailoring x to do what you want”
  • This app platform move will be the vector of future market segmentation

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