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Brand Strategy: Differentiation Versus Centrality


Brand Strategy: Differentiation Versus Centrality

Brands in a category are typically more similar than they are different. They have to be. They’re both trying to appeal to the large middle of the market. Classical marketing suggests differentiation is key: find a point of difference, or a unique selling proposition, and differentiate your brand on that basis in the customers’ mind. In an orange juice category dominated by frozen products or those made from concentrate, Tropicana differentiates itself by being “not from concentrate.”

But the thing is, over time, the not from concentrate claim comes to be emulated by competitors, the category becomes crowded, and customers switch in droves from concentrate-based orange juices to “not from concentrate.” Tropicana finds itself at the core of a large category of “non from concentrate” orange juices in which it is dominant player.

Now, at this point, is the recommendation to the marketer of the Tropicana brand still to differentiate, or is it to find ways to reap the benefits of being at the center of the category? What about other brands in the category, what should they do? Should they aim to differentiate or to challenge Tropicana for the center of the category?

The Power Of Centrality

On the one hand brand research demonstrates that the extent to which a brand is central or typical of a category bears a relation to how easily it is recalled and how easily it is included in the consumers’ consideration set. A typical brand is one that is located at the center of a category, lies at the “central tendency” of the category, shares features with other members of the category, and is used as a reference point for other brands in the category. Research also shows that a typical or central brand in a category also tends to be preferred over other brands by most consumers.

The Power Of Differentiation

If such advantages accrue to brands that are considered central to their product category, then why do brand managers go to great lengths to differentiate their brands from others and to make them distinctive? Because, from a marketing standpoint, a differentiated brand faces less direct competition with other brands. Differentiation can also justify a premium because competitor brands are not perceived as direct substitutes. Differentiation allows a brand to be targeted at specific customers or usage occasions. Finally, a differentiated brand may be perceptually more salient on the shelf and be more likely to be considered in an in-store situation.

Demonstrating centrality (stressing common features — at least, those in common with category attributes) allows brands to pitch to the large middle, while differentiation aims to give customers, both at the center and at the fringes, a reason to buy.

Finding the balance between centrality and differentiation is key for successfully managing brands today.

Contributed to Branding Strategy Insider by: Niraj Dawar, Author of TILT: Shifting Your Strategy From Products To Customers

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