Perhaps the biggest mistake companies with established brands make is focusing on being better, but being better doesn't help sell product, being different does.
During blind taste tests Pepsi beats Coke everytime. When they see the can though, Coke beats Pepsi. Clearly, Pepsi has the better taste, but Coke has the stronger brand. For Pepsi to compete, they need to be different than coke, not better.
Here's the thing, when a consumer decides to buy a product, they don't know if something is better until after they make a purchase decision. However, once they make a purchase decision there is a very strong emotional need to defend that decision and remain congruent with your previous behavior. So if a consumer decides to buy coke over pepsi, he will actually believe coke is better, even if during a blind taste test, they chose Pepsi.
This was taken from an excellent video by branding legend Al Ries, who so cleverly explains, "Be Different, Not Necessarily Better."
Branding is about human perception, and perception becomes reality. Focus on understanding how people think and perceive, instead of what you think they need or want or what you consider better. Win the battle for the mind and you win the battle for the wallet.
Here's the video…