The Blake Project, the brand consultancy behind Branding Strategy Insider, delivers interactive brand education workshops and keynote speeches designed to align marketers on essential concepts in brand management and empower them to release the full potential of the brands they manage.
Category: Brand Differentiation
I have written about creating “category-of-one” brands before. Most brands spend their time trying to increase their share of existing markets. They pursue many different tactics to do so, from innovating new product functions and features and offering price promotions (which erodes brand equity) to improving product quality and creating value-added services. Some even create highly entertaining ads hoping this will help them break through the category messaging clutter. The problem with these approaches is that they are incremental and most of them can be very easily matched by the competition.
Brand managers know how difficult it can be to create brand differentiation within an existing category. In mature markets, every market position has already been taken. True breakthroughs come only from creating entirely new categories, highly compelling new categories.
So, how does a brand manager achieve this?
- Break customer compromises. In the Harvard Business Review article “Breaking Compromises, Breakaway Growth”, CarMax is a good example of a company that methodically broke the compromises that brands in the used car buyer category routinely made with their customers. Amazon.com broke compromises as well and created the first global megastore open 24/7.
- Redefine the category in a radically new way. In the book Blue Ocean Strategy Cirque du Soleil is an example of a brand that created a new category of entertainment. It falls into the “circus” category, but this brand has skillfully crafted a highly valued and differentiated positioning as everything a circus is not. There are no tents, tigers and elephants. No ringmasters. Instead it borrows attributes from other entertainment categories like, dance, music, opera and theater. It becomes something all together different–far outside the bounds of a conventional circus.
- In an industry defined by functional categories, redefine your space by customer end benefits. My Alma Mater, Rensselaer Polytechnic Institute, chose to redefine itself from a technological university (or engineering school) to a place where people could go to change the world through technological innovation (why not change the world?®). Similarly, Paul Smith’s College did this by refocusing on the end benefit of being THE college that allows one to live and play in the six million acre Adirondack Park while receiving a college education (The College of the Adirondacks ®).
- Create an entirely new category, enabled by technological breakthroughs. The Internet enabled eBay to create more efficient markets through a global online auction platform. Apple ushered in the smart phone category with the iPhone.
Everybody wants a brand that’s different. The irony of that statement is intentional. It belies the conservative manner in which most brands approach competitive difference. They say they want to be distinctive to consumers but often, in their heart of hearts, they actually want to align (read conform) with the rest of the industry. One of the key issues for that is an uncertainty on the part of brand makers and decision makers to find a starting point.
In some ways that’s actually less difficult and daunting than it first appears. Begin with a premise that is truly one degree away from your rivals. By logically progressing that premise over time, and with strong discipline, you will build a brand that is consistently and markedly different.
Here’s 50 ways you can create a meaningful difference for your brand:
- Go slow in a world of speed. Each Rolex takes a year to manufacture. The perception that a longer process is needed to build the world’s best timepiece also reinforces the value.
- Use country of origin to your advantage. Brands from Switzerland are highly associated with precision and fine craftsmanship. Seek to build brand associations with countries that support your reputation for service, manufacturing, innovation etc.
- Behave differently. Online shoe retailer Zappos has built its advantage on an iron clad return policy and customer service that goes above and beyond, breaking down the perceived barriers of selling and buying shoes online.
- Look different. Apple always looks like Apple. Diesel always looks like Diesel. Absolut Vodka always looks like Absolut. They’re in a sector but they don’t look like part of the sector.
- Be the underdog in a sector where everyone else wants to be top dog. Nantucket Nectars started “with only a blender and a dream,” and Clif Bar proclaims that its founder once lived in a garage. Underdogs win the compassionate consumer. Look for the underdog story you can tell.
- Be truly and unapologetically shocking. Benetton’s “Unhate” campaign ruffled feathers on almost every front. But – and this is critical – the outrage you generate must link to a solution and that solution should be your front. Otherwise, you simply risk shouting into the wind.
- Expand your appeal. “Discover” an untapped audience in your sector and, by drawing them in, intensify the sense of community around your brand and the interaction that people have with the brand. Enterprise Rent-A-Car did just that by offering leasing at a time when competitors did not. By serving this unmet need with attention to customer experience, Enterprise became the world’s number 1 car rental company. Apple too saw what others did not. No one was asking for an iPhone, but an untapped audience emerged when new value in the form of a cell phone was introduced.
- (Re)Invent a category – and own it. UFC became the fastest growing sports organization in the world by redefining the reach and the audience for mixed martial arts. Today, UFC produces more than 30 live events annually and is the largest pay-per-view event provider in the world. Swatch differentiated from other watch brands by focusing on self-expression rather than precision.
- Create a new category. The Toyota Prius, the Nintendo Wii, and Red Bull are all brands that created new categories, outside the established norms of their product category. By stepping outside the bounds of their categories, these brands created a space that they can call their own.
- Tell a story that defines you and is unique to you. The story may be about your founder as in the case with Virgin and Richard Branson, your heritage like Hickory Farms or the value you bring to the world like Coca-Cola’s Open Happiness. It may also be based in imagination – like the thought that Keebler elves make Keebler cookies. Or perhaps it’s a story based on your highly guarded secret – only two people in the world know Coca-Cola’s formula. Your story may also be about the source of your product, service or inspiration.
It is an indisputable fact that purchasing in product and service categories obeys the law of Double Jeopardy. This is – stated at its most simplistic – an empirical generalization that higher market share brands achieve stronger customer loyalty than lower market share brands in the same category. But the thing that always intrigues me is whether all brands obey the Double Jeopardy law to the same degree all of the time.
Take pretty much any data set at a point in time and plot brands on a graph comparing a penetration metric with a loyalty metric, and you will find a consistent relationship between the two; the higher a brand’s penetration the higher the loyalty. The metrics could be awareness and claimed trial, familiarity and favorable brand attitudes or actual penetration and repeat purchase, and the pattern will be there and favor the bigger brands. The obvious conclusion to be drawn from Double Jeopardy is that to grow market share, a brand must first grow its customer base.
But Double Jeopardy only holds if brands are broadly substitutable and appeal to the same target audience. And having spent more time than I care to think about looking at brand scatter plots like the one described above, I have noticed that some brands manage to break away from the category relationship. A few appear to do so on a consistent basis, and others do so only temporarily. Brands that manage to achieve a higher loyalty than is predicted by the category relationship tend also to be the ones that have managed to innovate, and create a perception of meaningful differentiation versus the competition. The ones that fall short tend to be premium brands that have lost their differentiation.
This observation makes me wonder if over time brands tend to revert to the category mean. In other words, from time-to-time brands find a way to innovate – either tangibly or intangibly – creating meaningful differentiation that allows them to command more loyalty than their size would normally dictate. But competitive pressures then erode that advantage, returning the brand to the category norm.Read More
In a letter to Jean-Baptiste Leroy, Benjamin Franklin commented on the likely permanence of the U.S. Constitution, saying “In this world nothing can be said to be certain, except death and taxes.”
This is an adage that marketers would do well to remember. Just as there are no certainties in life, there are no certainties in marketing. When marketing a brand, the best we can hope for is to maximize the potential of a positive outcome and minimize the risk of a negative one. We cannot ensure that someone sees our ad, follows our brand on Twitter, or ends up buying it; we can only create the conditions that maximize the probability that they will do so. We cannot guarantee success, if for no other reason than the fact that our actions do not take place in a vacuum. Not only must we identify a compelling strategy and execute it well, but we must also do so better than the competition, who will be working just as hard to undermine our efforts.
To maximize the probability that people will buy our brand, we need to start by identifying what makes the brand meaningful and different. Meaningful differentiation is most powerful when it is tangible and functionally based. The Toyota Prius, the Nintendo Wii, and Red Bull are all brands that created new categories, outside the established norms of their product category. By stepping outside the bounds of their categories, these brands created a space that they can call their own. Their advantage may not last, but the Nissan Leaf, Microsoft’s Kinect for Xbox 360, and Hansen’s Monster Energy not only have to deliver a compelling product experience, but they must also overcome mental barriers to competition. Being salient – first to mind when a need arises – has always been a powerful driver of sales, and being known as the category creator is a powerful way to gain that position.Read More
Many brands focus on being trustworthy, reliable, maintaining high quality standards, developing innovative product and service solutions, delivering outstanding customer service and being highly responsive to customer requests. These areas of foci have led to continuous improvements in customer experiences. However, they have demoted integrity, reliability, high quality, innovation, customer focus and responsiveness from differentiating benefits to “cost of entry” benefits in many industries. Never the less, some brands are still clearly superior or even singular in their delivery against one or more of these attributes/benefits. Consider Apple and innovation or Nordstrom and customer service. One of our clients continues to gain market share by being superior in customer responsiveness. Even if you aren’t the top brand in your category on one or more of these attributes/benefits, it would still behoove you to become as good as possible with at least some of them.
When we work with clients to develop brand positioning statements at our brand positioning workshops and they want to focus on “trustworthy,” “superior quality” or “innovation” as part of their brand promises, we strive to ensure that they are committed to delivering against the chosen attribute, benefit or quality in an exceptional way. For these types of attributes/benefits, it is much more important to deliver on them than it is to talk about them. Taking about something that many brands talk about just blends into marketplace noise. Actually delivering on them in a unique or superior way leads to successful differentiation.Read More