Creating Brands Of Distinction: Differentiation Sources

Brad VanAuken The Blake ProjectNovember 20, 20076 min

Creating Brands Of Distinction: Differentiation Sources

As a student, teacher and practitioner of brand management for more than 25 years, I have studied the sources of brand differentiation for some time. While there are many sources of differentiation, it is my opinion that only a small number of sources have the power to create brands of distinction. Following are the six approaches that I have found to work best.

Self-Image Reinforcement
The brand reinforces the customer’s self image or how he or she intends to be perceived. Using the brand creates a feeling of congruence with self image. It is also a way to project that image to others. Taking just one product category (motor vehicles) to illustrate this, the image might be “I am progressive and I care about the environment.” The Toyota Prius brand reinforces this image. Or maybe it is “I am frugal.” Hyundai would be a good brand choice to reinforce this image. For someone else the image might be “I am successful and have status.” Mercedes is a brand that could reinforce this. Harley-Davidson reinforces the freedom of the open road and the lifestyle that is concurrent with that. If someone wants to be perceived as unique or different, a Saab, MINI Cooper or VW bug with polka dots might do the trick.

This approach to brand differentiation works in any category. What does going to Reed College, Hampshire College or St. John’s University say about a person? What does attending MIT or Brigham Young University say about a person? One can apply this equally to clothing brands, restaurant brands, food brands, vacation place brands or residential place brands.

Values Alignment
Closely related to the previous source of differentiation are brands whose values align with their customers’ values. Many people buy brands such as Newman’s Own, The Body Shop, or Ben & Jerry’s because they are socially conscious. Go to Patagonia’s website and it will be clear to you that Patagonia is based upon a love of the outdoors and outdoor sports and that environmental sensitivity is an important brand value. Some people watch FOX News because it reinforces their view of the world, while others listen to Air America Radio for the same reason.

Customer Segment Focus
Brands that try to be all things to all people eventually fail in being anything important to anyone. Conversely, brands that focus on a specific customer need segment with the intention of becoming customer experts and meeting the specific needs of their customers can achieve uncommon success. I have worked with a wealth management firm that focuses on financially successful entrepreneurs who want to demonstrate to the world that “they have arrived.” This firm really knows what is most important to its clients. It constantly designs new touch points to deliver on the promise of helping those people feel as it “they have arrived.” This source of differentiation relies on customer intimacy and extreme expertise in niche markets. The way organizations with this strategy grow is by getting to know their target customers better and better and by offering more and more products and services to those customers until they become an indispensable partner with their customers.

Unique Purchase Or Usage Experience

Starbucks is less about coffee than it is about that “in-between” experience. The people who developed that brand discovered a latent need for a somewhat self-indulgent, pampering space that was neither the “work” space with its job pressures nor the “home” space with its family responsibilities. And now people routinely pay $2 to $4 for a cup of coffee instead of the previous average of 50 to 60 cents. Ten Thousand Waves, one of my favorite spas in Santa Fe, NM, is nearly perfect in creating a multi-sensory experience, from its cedar oil shampoo and coconut soap to the fragrant trees that line its walkways and its numerous hot tubs, all in a very natural environment. I remember reading a Stanford Research Institute (SRI Consulting Business Intelligence) report in the mid-eighties entitled “The Experience Economy.” Back then, they were predicting a world in which there would be an increased need for services and experiences in lieu of physical products. Another example of this phenomenon is the Build-A-Bear Workshop® in which children can create their own customized teddy bears from scratch (at a hefty price premium). Amazon.com revolutionized the book buying experience and Netflix revolutionized the way we watch movies. iPods deliver an intuitively simple approach to downloading and listening to music. They are so user friendly that their user’s manuals are probably the least used of any technology-based product.

Outstanding Customer Service
More and more brands deliver an outstanding customer experience. Ritz Carlton’s mantra is “Ladies and gentlemen serving ladies and gentlemen.” One can imagine how this promise might play out under different scenarios. The Bangkok Oriental, one of the finest hotels in the world, delivers impeccable, extraordinary service. Midwest Airlines (previously Midwest Express) won every industry award possible (Travel & Leisure, Condé Nast Traveler, Zagat, Air Transport World, etc.) for several years in a row in the 1990s for delivering first class service throughout their planes. This included leather seats, great food, glass salt and pepper shakers, real linen napkins and free champagne. Disney’s theme parks are impeccable and the Disney Institute is available to organizations outside of the Disney family to share their secrets on how to exceed customer expectations. Lazzara Yachts of Tampa, Florida features “Imagine Perfection” as its tagline. Many might argue that this establishes an unreasonably high expectation, however it is a promise that they have delivered on for some time from their custom-designed mega-yachts to their customer-tailored christening ceremonies. Nordstrom’s free exchanges, easy returns and other exemplary customer service policies are legendary. So are their prices. Establishing truly extraordinary customer service requires both business process/system components and employee recruiting, training and evaluation/reward components.

Best Value
Value has a numerator and a denominator. That is, value is not just about price. Often the brands that deliver the best value are not even the lowest priced brands. Amazon.com enabled people to buy books in an entirely different way – 24/7. Their search and browse technology is legendary and once you have purchased a number of items from them, they get increasingly good at guessing what else might interest you. And, with their everyday price discounts (often 34% to 40%) with free shipping for orders over $30, they offer some of the lowest prices around. Ikea is famous for delivering high style to the masses through very reasonably priced furniture and home accessories. Honda and Toyota both make a wide variety of well-built vehicles with consistently good safety ratings, respectable gas mileage, well-researched amenities, few maintenance issues, reasonable prices, long lives and great resale values. No wonder those brands have been making inroads on US automobile manufacturers. They deliver an all-around great value.

Summary
While it is important to deliver on the basic functional benefits of one’s product category, that is not sufficient to create a relevant, unique and compelling brand in today’s world. That requires intimate customer knowledge and understanding, which then must be applied to create a unique brand. The most effective ways to create brands of distinction are through some combination of the following:

•    Customer self-image reinforcement
•    Customer values alignment
•    Customer segment focus
•    Unique product/service purchase or usage experience
•    Outstanding customer service
•    Best overall value

We wish you great success in creating your own brand of distinction.

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