Brand Leadership: Differentiation Power

What most bewilders me in the marketing world are companies that don't exploit their leadership. Instead of "I'm lovin' it," McDonald’s could be, "The world's favorite place to eat." Instead of "Connecting people," Nokia could be "The world's No. 1 cell phone."

Leadership is the most powerful way to differentiate a brand. The reason is that it's the most direct way to establish a brand's credentials. And these credentials are the collateral you put up to guarantee performance.

Also, when you have leadership credentials, your prospects are likely to believe almost anything you say about your brand. (Because you're the leader.) Humans tend to equate "bigness" with success, status and leadership. We give respect and admiration to those that are the biggest.

Powerful leaders can take ownership of the words that stands for their brands' categories. You can test the validity of a leadership claim by a word association test.

If the given words are "computer," "copier," "chocolate bar" and "cola," the four most associated companies are IBM, Xerox, Hershey and Coca-Cola.

Astute leaders will go one step further to solidify their positions. Heinz owns the word "ketchup." But the company went on to isolate the most important ketchup attribute. "Slowest ketchup in the West" is how the company is preempting its product's thickness attribute. Owning the word "slow" has helped Heinz maintain a 50% market share.

Despite all of the benefits of being the perceived leader, we continue to come across leaders who don't want to talk about their leadership. Their explanation for not laying claim to what is rightfully theirs is often the same: They don't want to brag.

Well, a leader not bragging about their leadership is the best thing that can happen to its competition. When you've clawed your way to the top of the mountain, you had better plant your flag and take some pictures.

Besides, you can often find a nice way to express your leadership. One of our favorite leadership slogans does just that: "Fidelity Investments. Where 12 million investors put their trust."

If you don't take credit for your achievements, the competitors directly behind you will find a way to claim what's rightfully yours.

If you doubt this, consider the following saga:

For years, the two big beers in Brazil were Antarctica and Brahma. Antarctica was number one and Brahma was a close-behind number two.

Then Brahma started an advertising campaign claiming leadership ("Ceruveza number one"). They added point-of-sale hands with the index finger symbolizing number one.

But here's the catch: When they started this, Antarctica was still the market leader. But no one knew this because they had not planted their flag of leadership.

When the dust settled, guess who had moved into first place? That's right: Brahma is now number one. The reason is that when people thought they weren't drinking the leading beer, they quickly shifted to Brahma. What started as an untruth became the truth.

The moral: While people love underdogs, they buy overdogs.

There is a happy ending to this story, as Antarctica and Brahma have now merged and can now both claim they are number one.

Leadership comes in many flavors, any of which can be an effective way to differentiate yourself. Here's a quick sampling of different routes to leadership:

-- Sales Leadership: The most often-used strategy by leaders is pronouncing how well they sell. Toyota Motor has the best-selling car in America. But others can claim their own sales leadership by carefully counting in different ways. DaimlerChrysler's  Dodge Caravan is the top-selling minivan, while the Ford Motor Explorer is the top-selling sport utility vehicle. This approach works because people tend to buy what others buy.

-- Technology Leadership: Some companies with long histories of technological breakthroughs can use this form of leadership as a differentiator. In Austria, a rayon fiber manufacturer called Lenzing isn't the sales leader, but they are the "world's leader in viscose fiber technology." They have pioneered many of the industry breakthroughs in new and improved rayon.

-- Performance Leadership: Oftentimes, companies have products that aren't big sellers but are big performers. This can also be used as a way to separate yourself from your lesser-performing competition. The famous Porsche 911 is an example. When one of these cars rumbles by, you know it can outperform anything on the road.

Leadership is a wonderful platform from which to tell the story of how you got to be on top. As we said earlier, people will believe whatever you say if they perceive you as a leader. The general belief is that leaders know more.

What makes a company strong is not the product or the service. It's the position it owns in the mind of the consumer. The strength of the Hertz brand is in its leadership position, not the quality of its rent-a-car service. It's easier to stay on top than to get there.

Can you name a company that has overturned a leader? Crest did it in toothpaste, thanks to the American Dental Association's seal of approval. (Ironically, Colgate has regained the lead with its germ-killing Total toothpaste.) Duracell did it with batteries, thanks to "alkaline." Budweiser did it in beer, and Marlboro did it in cigarettes. But it is a rare occurrence.

A survey of 25 leading brands from the year 1923 proves this point: Today, 21 of those brands are still in first place; three are in second place; and one is in fifth place.

Even changes in rank don't happen very often. If marketing were a horse race, it would be a deadly dull affair. In the 56 years since World War II, there has been only one change in position of the top three U.S. automobile companies.

In 1950, Ford Motor moved past Chrysler into second place among U.S. automakers. Since then, the order has been General Motors, Ford and Chrysler, without derivation. Monotonous, isn't it?

The "stickiness" of a marketing race and the tendency for companies or brands to remain in the same position year after year also underscores the importance of securing a good position in the first place. Improving your position might be difficult, but once you do, it becomes relatively easy to maintain the spot.

When you do get on top, make sure the marketplace knows it. Too many companies take their leadership for granted and never exploit it. All this does is leave the door open for the competition. If you get the chance, slam the door in your competition's face.

Sponsored by: The Brand Positioning Workshop

Comments

[Mike Mirkil]

If your leadership statement touts your unique point of differentiation, then I agree completely: shout it loud and proud.

If you're just saying you're the leader, I think that can be a bit of a hollow statement that doesn't carry much relevance.

Take Wal-Mart. Should they say they are the "biggest, baddest retailer on the planet?" I think if they did, negative sentiment would grow. Low price leader is fine, as it clearly states their unique point of difference.

Or Starbucks. No coffee chain is going to take the lead from Starbucks any time soon. But what good would proclaiming their leadership do? In this day and age of media proliferation and creating more means for one-on-one relationships with consumers, the smaller guys are far better positioned to carve out their niche, like Peet's Coffee, for instance.

Nike is yet another example. They are focusing on smaller and smaller sub-segments of their target audiences to be more relevant on the individual level and creating relevant communities of consumers.

Interesting discussion!

[Chris Brown]

Jack:
I was reading your article and nodding -- agreeing -- all the way until the end.

Now that the best selling car in a America is not a Ford but a Toyota, I think that the US automotive company leadership is anything but monotonous -- you've got to throw Toyota, Honda & Nissan into the mix.

Chris

[Gaurav Sinha]

Although I agree with what you're saying I also believe that superlatives in positioning are lazy in their essence - the 'best' 'biggest' 'first' story is so blatantly prostituted today by organisations that the core authenticity is diluted.

Customers want to believe a story, usually they'll believe any story if its well told but nonetheless our role as marketers is to tread the waters carefully because what's foremostly important is the fact, that the fact should indeed be a fact.

[Gavin Heaton]

Great post! Brand leadership and dominant market position is rarely discussed -- we tend to think and write about how to get to the top not necessarily how to maintain your position.

But Gaurav also is correct ... once you are at the top you have to work hard to make sure your story is not distorted by your success.