Your brand is a unique story — are you telling it the right way?
In the history of marketing, branding, and advertising, there have been few stories of rebirth and rejuvenation of a flagging brand more triumphant than Apple. By the 1990s, a company that skyrocketed to fame and fortune in the 1980s had fallen so deep into the doldrums that it was at the precipice of total collapse. Today, it has the largest market capitalization in the world.
The story of that turnaround can be traced to many strategic decisions, but one of the most commonly cited by brand experts was the rollout of a new positioning built around two simple words: Think Different.
From 1997 through 2002, it was a core component of Apple’s branding and a direct response to its main competitor, IBM, which had staked a claim to the word “Think” for its own line of computers and services. Apple wanted consumers to know that it wasn’t like the boring, nondescript, beige boxes associated with PCs. It was something sleeker, cooler, smarter, and most importantly, it did things in a way that was authentic to itself and its customers — it didn’t just mimic the market leader or follow the prevailing trends in the industry.
They were committed to breaking new ground and controlling the narrative around their brand in a way that made clear why Apple wasn’t like everyone else. That now iconic campaign is a landmark example of the power of differentiated marketing.
What is Differentiation?
Differentiation is a process by which companies and brands separate themselves from their competitors in the minds of consumers. Doing so makes them more attractive to their target market and provides a rationale for consumers to choose them over an alternative. Even with a firm’s own portfolio of brands, products, and services, it is often necessary to create lines of separation, lest consumers feel there is no real difference between them and hence no reason to select one over another.
The sheer number of offerings in the marketplace makes differentiation a necessity for most brands today. Even just a few decades ago, there were far fewer options on store shelves, and before the rise of ecommerce, many brands were insulated by geography. They didn’t need to concern themselves with options that their target market didn’t have access to. The internet changed all that. Modern consumers are comparing prices, features, and brand quality from virtually all over the world with a few clicks of a button.
Generating a competitive advantage in a playing field that big requires crafting a brand story that highlights the unique selling proposition that only your offering can claim, and, just as crucially, that idea must take hold in the mind of the target market. It’s not enough to have a unique product or even a distinctive brand, it has to be communicated in a manner that ensures audiences grasp those facts and are able to recognize and recall them.
Crafting a Differentiation Strategy
Differentiation strategies are often described as either horizontal or vertical. The former is a subjective measure and the latter is objective:
- Horizontal Differentiation: Personal preferences (e.g. chocolate versus vanilla, or a rose gold iPhone versus a black Samsung Galaxy)
- Vertical Differentiation: Price and quality (e.g. a luxury good versus a budget option)
There is overlap between these concepts, and differentiation strategies often employ a mix of both horizontal and vertical methodologies. Even with some horizontal differentiation elements, there can be a small degree of subjectivity. Unlike price, which is unambiguously objective, the quality of a product or brand has a small amount of individual valuation factored in. A Mercedes-Benz is considered by most to be of higher quality than a Kia, but when compared to a closer rival like BMW or Audi, personal preference comes into play somewhat.
Differentiation is a process by which companies and brands separate themselves from their competitors in the minds of consumers.
With vertical differentiation, however, there are rarely any objective metrics to consider at all. No one can claim with absolute certainty that a lemon-scented household cleaner is superior to one that smells like pine, or that a brand built around a big, bold design language is better than one that targets simple, clean, minimalism. They each have a place in the market.
It’s the job of brand managers to look closely at their buyer personas, target markets, market segments, and past purchasers to find a horizontal and vertical differentiation strategy that is narrowly tailored to appeal to desirable demographics and distinguish their offering from competitors.
Effective Forms of Differentiation
Given the growing importance of differentiation, owing to increasing competition in the marketplace, smart brand managers pursue every possible avenue to separate their offerings from the pack. Here are several key options:
- Geography: locally-sourced products, components, and materials
- Eco-friendliness: recycled materials, recyclability,
- Fair Trade: transparent supply chains built on equitable relationships
- Certifications: membership to industry groups and independently-awarded proof of fitness
- Uniqueness: lack of alternatives and niche products and services
- Innovation: recognition for creating a new product or category
- Heritage: a long track record of success in the field
- Brand Experience: low friction buying processes, convenience, high quality design, and helpful content
- Emotionality: association with holidays, moods, experiences
- Thought Leadership: expertise, specialized knowledge
- Challenger Status: hunger, drive, and an underdog’s craftiness
- Personalization: solutions and messaging directed specifically at an individual
- Customization: offerings capable of being adjusted to fit particular needs
- Social Consciousness: charitable giving, socially responsible production, and concern for communities
- Unconventionality: attitudes and executions that go against the grain and industry trends
- Limited Availability: small production runs, brief promotions, and pop-ups
When building a brand, it’s critical to identify which of these factors can be leveraged to position and differentiate the brand. Authenticity comes into play when making those decisions, because consumers are quick to spot (and penalize) posers that don’t actually have the bonafides to back up their claims.
Be Different, or Be Forgotten
The goal of a differentiation strategy is to decrease the perceived substitutability of a product, meaning consumers are encouraged to believe that the differentiated product cannot be easily replaced and that, though alternatives may exist, they are inferior or otherwise less desirable, sometimes purely on the basis of the strength of the brand.
Customers benefit from differentiation because it means there is a greater diversity of products, services, and brands to choose from, and hence a greater likelihood that they can find one that is a perfect fit for their needs, tastes, and values. From the brand’s perspective, it’s an effective strategy because it drives sales while opening the door to upselling, cross-selling, premium pricing, entry into new markets, and generating customer and brand loyalty.
Above all, it’s important to hew closely to the brand’s personality and voice. It’s possible to reposition a brand, as Apple so famously did in the 90s, but that process takes time and consistent messaging. Great brand managers get to the core of a brand’s ethos and unique selling proposition and connect it meaningfully to its target market.
Anything less is a recipe for diminishing returns, loss of market share, and shrinking relevance in a marketplace that demands every brand stake its claim and explain what makes it special and worthy of attention.
Ready to learn more about differentiating your brand from its rivals? Reach out to Hanlon today.