“Our product is better than competitors, our raw materials are superior, we've added XX nutritional elements, the experience is better...” The leader enthusiastically introduces the product, a proud smile on their face. “Our product strength is stronger than competitors, I believe this product will sell well...” But in reality, most products go from initial confidence to a quiet exit. Why is it that our product is better, but consumers just don't accept it? The essence of why a company's product is “better” but fails to move consumers lies in “wrong differentiation.”
Why do products that are “better” fail to sell?
1. Homogeneous products lack competitive barriers When products and brand strength are similar, consumers see them as homogeneous. Yili and Mengniu—which has stronger brand power? What's the difference between Snow Refreshing and Tsingtao Refreshing? Apart from the brand, most consumers can't tell the difference. Since consumers see them as homogeneous, why buy competitors instead of mine? In homogeneous situations, repurchase often relies on “consumer inertia” and “product availability.” I remember when I first ate Yili's Little Pudding as a child, I thought the milk flavor was strong. Once, I went to buy Yili Little Pudding again, but after searching the freezer for a long time, only Mengniu's Little Pudding was available, so I reluctantly bought Mengniu's. It tasted less milky (actually, Mengniu's Little Pudding is bigger than Yili's, same price, similar taste). Later, when Yili Little Pudding was back in stock, I still preferred Yili. But when Yili wasn't available, I bought Mengniu several times and found it tasty too, because I had gotten used to Mengniu's flavor. This is homogeneous competition: purchase decisions are driven by consumer habits, and the first-mover enjoys the dividend of habit. It's clear that to break this habit, you'd have to block competitors so consumers can't buy them. The first-mover competitor is like a castle built in consumers' minds. If you compete head-on, it's like the competitor is “defending the city” and you're “attacking.” You often need to invest several times the resources of the main competitor to change the competitive landscape.
2. So-called differentiated products don't form true “differentiation” Most brands' “differentiation” is from the company's perspective, not the consumer's. Consumers see many products in the supermarket every day; they can't research every product to understand its true value. Most of the time, they only understand products through obvious features. For example, a leading dairy company launched Juan Shan milk because the Juan Shan cow is a high-quality, noble foreign breed, but consumers can't perceive the benefit, so naturally no one buys it. There are many similar examples, like a yogurt emphasizing foreign **strains; consumers have no perception. Unless consumers already have broad awareness of **strains, emphasizing **strains is only effective then. Don't imagine consumers as experts who know everything. What consumers can't perceive doesn't exist to them. Especially for high-end products, you need a reason to justify the high price. Evergrande Spring Water promoted deep volcanic mineral water, but what are the benefits? Consumers don't know. A certain soda water early on promoted its weak alkalinity. What benefit does weak alkalinity have for consumers? Maybe industry insiders know, but consumers don't. Any product that hasn't been understood by consumers or formed core consumer cognition is, to consumers, homogeneous within its category.
Information overload weakens consumer perception; “more selling points” ≠ differentiation “List all the product advantages”—a company's product poster is densely packed with advantages: “three major selling points, eight advantages,” fearing consumers won't know enough. This is typical internal thinking. Too many advantages, and consumers can't remember them, so the product loses its distinctiveness, appearing no different from other similar products. A milk powder manufacturer repeatedly tells consumers, “Our product has DHA, ARA, probiotics, and other nutrients,” “Our product uses the most advanced production technology,” “Everyone who uses it says it's good; it makes babies smarter, boosts immunity, promotes gut health,” “Close to breast milk, won't cause heatiness”... The product benefit points are chaotic, consumers are confused, and they hesitate to order. Selling points aren't about quantity but about precisely hitting consumer needs.
Differentiation points unrelated to core consumer needs Non-mainstream needs can't drive consumer purchase behavior. For example, Coca-Cola once launched a vanilla-flavored Coke because market research showed vanilla was the most accepted dessert flavor (like vanilla ice cream, cake), but cola consumers didn't buy it, and it disappeared from the market. Similarly, a yogurt brand launched various flavors: blueberry, vanilla, strawberry—all flavors consumers like—but now only original sells well; others are hard to find. Especially when consumers have formed preferences for certain flavors, new flavors only cannibalize sales of existing ones, bringing no new growth, and wasting manufacturer and distributor resources.
What does a truly differentiated good product look like?
First, packaging differentiation should be obvious, creating first perception and first memory. Packaging differentiation shouldn't be for its own sake; it must be based on meeting consumer needs, whether psychological or functional.
Functional packaging differences (safety/convenience) During terminal visits, when asked why they chose Yanjing U8, many consumers answered, “The bottle looks nice, and it has a pull ring, so it's safer to open.” Industry insiders, on the other hand, first reaction is, “This bottle is ugly,” “Too bulky, doesn't match consumer aesthetics.” Industry and consumer reactions are completely opposite. There's a marketing saying: “Different is better than better,” which illustrates this. U8's bottle differentiation, especially the pull-ring cap, makes it easy to open and reduces the risk of bottle explosion. Even women can easily pull it open. Go to a hypermarket and you'll see that popular rice packaging is more refined and smaller. This isn't differentiation for its own sake but follows the trend of single and double-person households needing smaller packages.
Packaging aesthetic differences (retro/premium feel) A major brewery has a specialty product called “Old Snow,” which has grown rapidly in sales over the past two years, but it's not the company's main push, and no resources are invested in terminal promotion. “This product is truly good; it has its own traffic. Once it's on the shelf, it sells,” is the real feedback from many distributors. When asking store owners, the consistent answer is, “The retro packaging attracts consumers; and it has over 100ml more than regular beer. Once consumers get used to it, repurchase rates rise.”
“Visible high-end packaging” has social value Especially for products priced well above the mainstream, people should feel the premium at a glance. Many products emphasize their uniqueness through internal ingredients, but their appearance isn't much different from similar products, so they “blend into the crowd.” Early Evergrande Spring Water took a high-end route (5 yuan per bottle, far above the mainstream 2 yuan), but its packaging was no different from other affordable bottled water, just a color change. Look at foreign high-end waters: they use glass bottles, unique shapes, some designed like art. High-end things carry an element of showing off; it's human nature. Since it's showing off, it must be obvious. Why are luxury brand logos always so big and prominent? Humans are visual creatures. If you don't catch the eye at first glance, you miss the chance to interact with consumers. In that case, you need to spend more money and effort to acquire consumers. So, packaging that stands out is like the product speaking for itself.
Second, core value should be explainable in one sentence. A core value that consumers understand without explanation is the true value. Genki Forest emphasizes 0 sugar, 0 fat, 0 calories; Jane's Yogurt emphasizes 0 sucrose... That's it. Consumers understand easily. FMCG marketing doesn't need to be high-sounding. Some executives want to be lofty. Red Bull's early slogan was “Tired and sleepy? Drink Red Bull,” later changed to “Your abilities exceed your imagination.” Later, Red Bull's classic slogan was adopted by Dongpeng Special Drink, which still promotes “Tired and sleepy? Drink Dongpeng Special Drink.” This isn't simple borrowing; they hired Trout & Partners, spent a lot on research, and concluded this.
Finally, product value should align with target consumers' cognition. If the product's actual value is lower than consumer expectations, consumers feel deceived, which can backfire and quickly kill the product. A dairy company launched a product called “Guoguo Xi” in 2017. The name was good, and it was during the smoothie boom. Many consumers assumed it was yogurt. The big purple visual element stood out among milk products. Sales in the first two months exceeded expectations, even out of stock. But later, sell-through declined, and it gradually exited the market after a year. Many milk buyers would pick it up and look, some even carried it away, then put it back, muttering, “It's a drink, I thought it was yogurt.” A hypermarket salesperson complained, “Can't you remove the word 'drink' from the packaging?” But it's required by advertising law. Because the product didn't meet urban consumers' health needs, it failed, wasting a great name and eye-catching packaging.
In the end, in the era of incremental growth, even without careful product selection, charging forward yielded decent results. Now, with oversupply, “choosing the right product is more important than subsequent promotion.” A good product gains natural attention, saves marketing costs, and shortens growth time. Only with good product selection can you achieve twice the results with half the effort. A truly good product isn't “good in the company's eyes” but “good that consumers understand at a glance.” In an era of product explosion and oversupply, your product has only one chance to connect with consumers. This isn't an exaggeration. If you can't catch the eye at first glance or make the core value easily perceptible, all your resources may be in vain. Choose the right product, and you save half your resources; choose wrong, and even full effort may not move the market. Especially in an era of supply-demand mismatch and consumer demand stratification, how to match the right products based on consumer needs has become a critical question for the entire industry chain. In August, in Shanghai, at the 2025 7th China FMCG Conference themed “New Demand, New Supply,” we've specially planned a forum on “Emotional Value and New Consumption,” inviting Lemon Republic CEO Geng Shaomeng, Samyang Foods China Sales HQ Deputy General Manager Wang Chengjun, Dingding Lazy Dish Partner Lin Zhenghuan, Golden Monkey Marketing & E-commerce Director Zhang Yan, Jack Panda Founder Zhao Chengkui, Xiaohongshu Business Consumer Goods Industry Special Manager Cao Siqi, and other brand/platform executives and frontline operators to share practical methodologies on product strategy in the new consumption era, helping brands seize growth opportunities. Instead of competing in the red ocean, seize the next growth paradigm! Register now and explore the future with industry pioneers!
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