Brand differentiation occurs when a brand strategy based on a unique selling proposition (USP) is put into action. The aim of many marketers is to make sure that the brand they are in charge of is perceived as being different and more unique than its competitors.
Some brands achieve differentiation by having a significant advantage over their competitors, such as Amazon’s promise of the widest selection of products, the lowest prices, and the convenience of delivery. Others use specific words to describe their brand, such as Chivas Regal’s brand strategy based on chivalry.
Companies must offer a unique value proposition that resonates with their target audience. That’s where meaningful differentiation comes in. Meaningful differentiation is the creation of a distinctive value proposition that sets a company apart from its competitors and resonates with customers on a deeper level. In this article, we’ll explore the power of meaningful differentiation and how businesses can achieve it.
1. Fully Meaningful brand differentiation
The concept of meaningful brand differentiation involves a brand’s ability to offer a product or service that is significantly different from its competitors. This difference must be understandable and relevant to consumers, who should perceive the brand’s offering as better than others. Brands that achieve meaningful differentiation have a greater chance of being mentally available to consumers and growing in popularity. However, it can be challenging for brands to achieve this type of differentiation, and those that do are often in the media spotlight. Two notable examples of meaningfully different brands are Tesla and Uber.
Tesla‘s success is largely due to its ability to cut through the noise and position itself as a leader in sustainable energy. While Tesla is known for its electric cars, the company’s ambition extends far beyond that, and it offers energy storage systems as well. Some analysts attribute Tesla’s success to its focus on software, rather than just cars.
Meanwhile, Uber‘s unique offering of ride-sharing and delivery services allowed the brand to quickly build global awareness and become a major player in its industry. Other brands that have achieved meaningful differentiation include Red Bull, Nespresso, Spotify, and Dollar Shave Club.
2. Partly meaningful brand differentiation
The previously mentioned brands are considered pioneers because they introduced something new to the market. However, not all brands need to be pioneers to be successful. There are many companies that offer similar products to their competitors and are not able to differentiate themselves for various reasons. Communication can help such brands stand out.
The brands discussed in this section may not seem different from their competitors in terms of their offerings, but they have found ways to distinguish themselves through communication. For example, Ben & Jerry‘s is a premium ice cream brand that is known for its involvement in social causes. The brand talks about these issues using a light-hearted approach and often makes references to ice cream to reach a wider audience. Another example is Diesel, which uses provocative communication to differentiate itself from other fashion brands. The brand challenges social norms and uses controversy and irony to express its values. Other brands that have successfully differentiated themselves through communication include Innocent, Dove, Hendricks Gin, and Old Spice.
3. Undifferentiated brands
These brands can still be successful, but typically only if they have other competitive advantages such as high recognizability, distinctiveness, high share of voice, or a super-effective sales force. Samsung and Visa are examples of successful undifferentiated brands that operate in highly competitive environments and target wide audiences.
Samsung‘s brand strategy is centered around inspiring the world, creating a better future, and enriching people’s lives. While Samsung’s offering is highly relevant, it is not significantly different from its competitors. Many of Samsung’s campaigns are creative but do not attempt to differentiate the brand in any way. Yet, Samsung remains a super successful brand.
Visa, on the other hand, 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 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 successful undifferentiated brands include Zara, Santander, Ford, and Hilton. While meaningful differentiation is not the only way for a brand to achieve commercial success, it does make the brand easier to notice and remember, which can contribute to its growth. However, lack of differentiation can be compensated for with great, visible branding, high share of voice, and an effective sales force.
The popularity and market penetration of a brand have a significant impact on how people perceive the brand and whether they consider it to be good. This is particularly evident when asking for recommendations for a tool or product, where people tend to suggest the biggest and most well-known brands in the category, rather than those that may actually perform better.
Many people are satisficers and do not conduct in-depth comparisons or analysis before recommending a brand or product. Instead, they often suggest tools that they have never used but see frequently, such as Salesforce, Intercom, Hubspot, Drift, Optimizely, and others.
It can be amusing to witness a Twitter conversation where one freelancer recommends Optimizely to another freelancer for A/B testing, despite having no real knowledge of how it works or the cost involved. Nevertheless, because they have heard of it, they recommend it.
Gaining market share is critical for a brand’s loyalty metrics, word of mouth, and overall consideration among buyers. The more people know about a brand, the more they are likely to like it and the more popular it becomes.
However, it is still crucial to have meaningful differentiation that people can easily articulate. This goes a long way in carving out a share of the market, particularly when there are already established brands dominating the space. By offering something unique and valuable, a brand can stand out and gain traction, even in a crowded and competitive market.