How important is it to DIFFERENTIATE?

We often hear about brands being “different” or brands being “well differentiated” from others. We assume this implies being “different” from competition in the consideration set.

Approach to Differentiation

What exactly is differentiation for a marketing person? What does it mean? What are the sources for differentiation?

Importantly, how obsessed are we with Differentiation? Is it treated as a day to day decision? Is it our guiding principle? Or is it something we draw up annually for the brand plan, conceptualize some activities around (it), and then leave it there until next year? Or is it something we expect our brands, our marketing programs and our people to radiate every minute, every second of the day? 24 x 7 x 365?

Does it matter?

When to Differentiate

Interestingly, the most likely time when differentiation is thought about is, when, drawing up the Value Proposition for a brand; hopefully it is not just restricted to USP discussions but taken through to the creation of the Positioning Statement and overall Value Proposition (clarifying here that the Value Proposition is larger in gamut than the USP).

Where to apply Differentiation

Useful, advice that I received some years ago was to look at the marketing mix and examine each “P” and see if it could be the source of differentiation. It worked well – we examined all the Points of Parity and Points of Differentiation for each element of the marketing mix. This helped clarify our stand on different aspects for designing marketing programs.

For example – the Place or channel maybe a point of differentiation; you may want to use a channel no one or very few use. Again, it is important to think this through – it could entail changes in strategy or the need for differentiation could be brought upon by change in strategy.

A cosmetic brand may want to change from high end cosmetics to reach a larger audience; this may warrant a change from premium grooming saloons to mass(albeit high end) retailers.

For many the differentiation could be Price – too high or too low.

Brands of apparel and accessories often tend towards the highly premium – clearly demarcating themselves from other lower priced products. This ensures that the competitive consideration set and segment of targeted customers is also clearly different.

Most marketing folks tend to stay away from the Price at least for discussions or planning, but may eventually end up making quite a few compromises here – near the end of the month or the quarter!

One POD is seldom enough unless it is revolutionary. Most Brands have a Point of Differentiation related to the Product and partly to the Promotion (generally the quality of the creative; quantity of brand exposure).

The advantage of this “Marketing Mix approach to differentiation” is that it takes a slightly more macroscopic view of Differentiation. It allows us to think of various avenues for differentiation, not just the product, which is generally the most likely “candidate” for use as a differentiator.

A caveat – the entire value chain should be in harmony with each other in order to achieve strong differentiation.

For instance, it would be silly to have a low cost airline serving caviar.

Differentiation also ensures that one is forced to have a strong plan to Win. This is crucial.

The high priced apparel brand will not exist on price alone – it has to be supported by products which the target segment will consider to be of high value. It’s point of sales will also have to embody the premium look and feel that the brand wants to exude.

The no frills airline – has to ensure that all its services also ensure the promised benefit of fast connectivity with a lower cost structure – only then will it be able to sustain its advantage. Choices will have to be made on what parameters to focus on, to spend time and money upon.

Essentially then, even though Differentiation is considered important, more thought can be given on which facets will be differentiated.

Also, once the point of differentiation is decided, a lot of planning needs to go into related aspects.

In this context, there are some interesting questions which arise – how many Points of Differentiation or Points of Parity should be there for a brand? When should we share this with existing or prospective customers? How often should we “Differentiate” or really how often should the differentiation messages be sent out? Should these be to existing or potentially new customers?