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What is meaningful differentiation and how it can help drive commercial results?

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Last year we wrote our most shared article so far, “Brand differentiation vs. brand distinctiveness – what matters more?”, in which we:
– explained the difference between differentiation and distinctiveness
– summarized the Ehrenberg-Bass Institute for Marketing Science research findings on why brand distinctiveness (delivered through strong and consistent branding) might contribute to a brand’s growth more than brand differentiation (delivered through unique positioning)
– shared our experience regarding situations when brand differentiation actually matters.

We concluded that there are three instances when strategic differentiation can lead to better commercial results. One of these is “meaningful differentiation”, the topic we would like to explore today.

In this post, we are going to present several examples of well-known brands arranged into three groups, based on where they belong on a differentiation spectrum ranging from meaningful differentiation (1), somewhat meaningful differentiation (2) to no differentiation at all (3).

It’s worth highlighting here that a brand can be commercially successful in any place on the spectrum.

1. Meaningful brand differentiation

Meaningful brand differentiation takes place when the brand’s uniqueness is based on a true and significant difference in its offering, in particular, when the brand manages to create a new product sub-category. Customers must be able to understand how the brand is different from its competitors’ brands and, even more importantly, find it better and more relevant.

Meaningful differentiation can be a strong factor contributing to a brand’s mental availability and growth, as it uniquely fulfils people’s conscious or unconscious needs. Many brands, which can be described as meaningfully different, enjoy first-mover advantage for many years.

However, not many brands have succeeded in achieving meaningful differentiation, although those that have receive disproportionate media attention. Two examples include Tesla and Uber.

Although Tesla is mostly associated with electric vehicles, its scope of business, as well as its ambition, is much wider. Tesla’s higher purpose is “to accelerate the world’s transition to sustainable energy” which the company implements by building not only electric cars but also energy storage systems. Some analysts believe that Tesla’s success lies in the fact that it is run as a software rather than a car business. However, to customers, Tesla has simply managed to cut through the noise and effectively position itself as “the electric car company” – a firm that produces well-designed, electric vehicles, which are good for the environment.

Uber was launched in 2009 in San Francisco as UberCab. Initially it was a high-end black car service positioned as “everyone’s private driver”. Together with the growth of the company, the brand has evolved into a mainstream proposition – a global business moving people as well as delivering goods and food. Uber’s offering (both the idea as well as the execution and technology behind it) was so different to what was available on the market that Uber managed to build its global brand awareness disproportionally quickly. It might take years before there’s any significant player that can compete with Uber globally.

Other examples of brands in this group include Red Bull, Nespresso, Spotify or Dollar Shave Club.

2. Somewhat meaningful brand differentiation

The brands mentioned in the previous paragraph are true pioneers, which were able to offer something that previously hadn’t existed on the market. Not every brand can be a pioneer and not every brand needs to be a pioneer to be successful. There are thousands of companies whose offering is very similar to their competitors and which for various reasons don’t have the possibility or capability to be meaningfully different.

Communication can come to their rescue.

The brands which we are covering in this section, to an average customer, may be indistinguishable from their competitors at the offering level. However, they have managed to find a way to talk about themselves that comes across as (somewhat) different.

The first example is Ben & Jerry’s – a premium ice cream brand, on a mission to make great ice cream “in the nicest possible way”. Ben & Jerry’s has made itself known for its involvement in social undertakings. Global warming, marriage equality, LGBT rights, Fairtrade, refugee treatment, peace advocacy, racial justice and pro-democracy movements are some of the areas in which the brand is heavily engaged. Interestingly, to build awareness of these social, environmental and political issues among a wider audience, the brand talks about them using a light-hearted and not so serious approach and whenever possible makes references to ice cream.

Another example of a brand which has managed to differentiate itself primarily through communication is Diesel. Although Diesel at the product level has a mass appeal, its communication is highly provocative. Diesel is a true rebel of the fashion world. It rejects the social norms and constantly questions the status quo. Bravery, individuality, self-expression, passion, and creativity are the key pillars of Diesel’s brand strategy. The brand employs controversy and irony as its typical means of expression. Most Diesel campaigns have become advertising classics – not only because they were brave but mostly because they were genuinely different and always based on in-depth observations of the world.

Other examples of brands in this group include Innocent, Dove, Hendricks Gin or Old Spice.

3. No actual brand differentiation

The last group includes brands which don’t place any emphasis on differentiation – neither in their offering, nor in their communication.

However, it needs to be said loud and clear that this group also comprises highly successful brands. The reason why they don’t focus so much on differentiation is often because these are the most mainstream brands, trying to attract wide audiences and not reject anybody by being too specific and / or too different.

Having said that, it’s worth noting that the commercial success of these brands has little to do with their relative lack of differentiation but results from one (or all) of the following factors:
– high recognizability and distinctiveness
– high share of voice
– super-effective sales force (in particular, in the case of B2B brands).    

An undifferentiated brand is highly unlikely to achieve commercial success, if it doesn’t have one, two or all of the three above-mentioned competitive advantages.

One example of a brand that operates in a highly competitive environment and which communicates to a wide audience is Samsung. Samsung’s brand strategy is encapsulated in its so called “Vision 2020” and revolves around inspiring the world, creating a better future and enriching people’s lives. Although Samsung’s offering is highly relevant, it is not much different to what its competitors offer. Many of Samsung’s campaigns are great from a creative perspective, but they don’t attempt to differentiate the brand in any way. Yet, it is a super successful brand.

Another example is Visa. Visa aspires “to be the best way to pay and be paid” and highlights its ubiquity and accessibility – it’s “for everyone, everywhere”. Similar to Samsung, Visa’s offering (when compared to, for example, Mastercard) is not overly differentiating, nor is its “ubiquity” positioning (even if highly relevant in the payment solutions category). Despite this, Visa is a household name.

Other examples of brands in this group include: Zara, Santander, Ford or Hilton.

Although meaningful differentiation is not the only way for a brand to achieve commercial success, it makes the brand easier to notice and easier to remember, which in turn may contribute to its growth.
On the other hand, lack of differentiation doesn’t necessarily lead to a commercial disaster, but it needs to be compensated for with great, visible branding, high share of voice and an effective sales force.

If you want to hire Magda for a brand strategy-related project, email her at: magda@brandstruck.co

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Magda Adamska is the founder of BrandStruck.
https://www.linkedin.com/in/magdalena-adamska-32379048/

BrandStruck ithe only online database of brand strategy case studies.
This is a tool that is dedicated to brand and marketing professionals, allowing them to better understand the positioning of the world’s most admired brands, the similarities and differences between them and to learn more about certain categories.

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