The more me-too your product or service is, the harder you have to work to sell it.
The evidence is all around you: Me-too products spending tens or even hundreds of millions on marketing, because the only real difference between the products is the marketing itself.
How many carbonated, caffeinated performance drinks are there? If you blind-taste-tested the ten or so products available in your average supermarket, would you be able to identify the brands? Most likely not.
The real difference is this: Red Bull’s brand image (created by advertising and marketing) is different to Monster’s brand image (created by advertising and marketing).
And those two players alone spend tens of millions of dollars every year trying to make their brand image more attractive and enticing to performance-drink consumers.
Not because they want to; because they have to.
Here comes another one
If you enter a market with a me-too product undistinguished from the other products in that market, your product won’t deliver market share. You’ll have to buy it. Which means outspending and outmarketing the incumbents who will react by increasing their spending and marketing to defend their market share.
Imagine launching a new cleaning product into a crowded cleaning product market. And your product doesn’t have a demonstrable, convincing performance benefit.
Your courses of action are strictly limited, and determined by the depth of your pockets.
You can either drop your price to undercut the competition (there goes your margin).
Or you can run a high-profile advertising and/or promotional campaign (there goes your margin again) that entices people to try your product. But as soon as they work out it delivers no performance benefit, they’ll go back to whatever brand they were buying before you interrupted them.
Whatever you do, it will have a cost. And that creates another problem: trying to buy your way into a market drives up the cost of customer acquisition for everyone in that market. Including you.
There are only so many consumers in a given market or niche. Divide the number of consumers by the combined budgets of all the suppliers in that market, and you get a per-head customer marketing cost. Add your budget to your competitors’ and the per-head cost goes up.
The other issue associated with me-too products is, they are only tolerated while their market share is negligible. As soon as a major player in that market feels their presence, the new entrant is squeezed out or crushed.
A better place to invest your money
A better alternative is to invest less in marketing and more in ingenuity or R&D, to make your product or service remarkable.
Easier said than done, I know. But a lot easier and less expensive than trying to market your way out of the hole that a me-too product will put you into.
If you can develop a product or service which offers something more, different, or unique to the market; or if you can design your product or service to fulfil the special and unique needs of a subset of the market – a niche which isn’t being addressed by the major competitors – you’ll be able to attract and keep a growing following of loyal customers, without having to morgage the farm to pay for the marketing.