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Strategy

Is Brand Differentiation Possible In a Crowded Market?

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Duracell package design company

We’re all familiar with brand differentiation as a concept. It’s an idea that applies to many aspects of your business, from how you position yourself to your target market to the products you sell. There are plenty of marketing philosophies around the idea, including those like the Blue Ocean Strategy. For those unfamiliar with it, Blue Ocean is a marketing idea championed by professors at the INSEAD business school. The strategy details the value of differentiating yourself in the marketplace. 

The whole thing is a rather extended metaphor describing the business landscape as an ocean, with traditional, competition-based business strategies representing a “red ocean” philosophy: bloody, competitive, and oversaturated waters. Conversely, companies that seek to differentiate themselves enough to avoid competing altogether are adopting “blue ocean” philosophies: they avoid the fight and leave themselves free to sell on their own terms.

You can differentiate based on anything.

The concept of differentiation isn’t new. Brand differentiation is an ongoing goal for every company, even if a company isn’t able to avoid competition altogether. And brand differentiation is always possible, even if it doesn’t seem like it.

For example, certain consumer packaged goods (CPG) purveyors might believe that their products are too commoditized for meaningful differentiation.  How many different ways can you sell a bottle of water?

As it turns out, quite a few. Even something as basic as water can be branded to great effect – and it has. We all know that brands like Fiji and Evian command higher price points than bargain brands, but what many don’t know is that these luxury brands barely scratch the surface of what people will pay for artisanal water. Certain brands of bottled water cost hundreds of dollars per liter, based off little more than the strength of effective branding and bespoke packaging.

We can chalk this up to the well-established fact that emotion drives purchasing behaviors more than logic or reason. (As if a $600 bottle of water didn’t hammer this point home. But hey, if the market will bear it – that’s capitalism, baby.) Regardless of the justification, these are companies that have taken a simple commodity and turned it into a high-value product targeted at a specific niche.

Finding your own angle.

It might seem crazy to those of us who can’t afford to spend a month’s rent on a beverage, but the above is differentiation in the truest sense. Of course, most CPG brands can’t simply slap a few jewels on their packaging design, double the sticker price, and call it a day.

Differentiating yourself in meaningful ways relies on a thorough process of self-reflection. Companies need a dedicated brand development process, based on self-assessment and target market research, to determine where their advantages are – and how to position those advantages to make an impact with consumers.

And while we can’t perform this research for you, we can offer some non-traditional tips for brand differentiation that may spark your imagination about how to position your own products.

Behave differently from expectation.

Based on whatever research you conduct, you’ll find that your target market has some expectations of what they’ll see from your brand. These might be stereotypes based on what you sell, or they might be learned behaviors from past experiences with competitors. Either way, identify what your market expects – and then throw it in the trash.

This idea applies to just about any element of your marketing strategy, but it can be particularly striking when it comes to price. (Remember our artisanal water?) Starbucks prices its coffee higher than competitors to telegraph a sense of quality. Apple charges a premium for its products for the same reason – and because they’ve built so much brand equity over the years that people will continue to pay it. In both cases, these companies adopted a confident pricing model beyond what customers may have expected at the time, and the market responded.

You don’t need to be Apple or Starbucks to pull this off. This is a foundational part of brand differentiation. When your competitors are all looking right, you look left.

Differentiate based on ethics.

Particularly for younger market segments (Millennials, yes – but also Generation Z and future Gens to come), we’re seeing differentiation happen on ethical, moral, and sustainable criteria. It’s not a secret; younger shoppers are savvier about the ethics of global supply chains and prefer to do business with companies that hold similar values. Fair trade products. Sustainable organics. Free-range farming. These are all common points of differentiation that brands can leverage to stand out on the shelf. (Provided that you actually practice what you preach!)

This ties into transparency as well. Modern consumers prefer to know what companies stand for and what’s going on behind the scenes. Even if you can’t differentiate yourself on the uniqueness of the product, you can leverage these branding elements to stand out from the crowd.

Cultivate relationships.

If you’re struggling to compete on product originality or price, consider competing in another way – relationship management. Consider how Lay’s used this strategy to generate buzz for their products. (Not that Lay’s needed to differentiate themselves in this way, per se – but it’s a great example all the same.)

Rather than simply testing and rolling out new chip flavors as many brands are wont to do, Lay’s set up a series of contests to encourage customers to send their own ideas in for consideration. (Remember the “Do Us a Flavor” contests?) The campaign was interesting, it was unique, and it made customers feel like they were actively contributing to a brand they loved. These types of strategies, often dubbed relationship marketing, can be a great way to differentiate yourself from competitors who couldn’t give a hoot what their customers have to say.

Brand differentiation is always possible.

Differentiation is the name of the game for most brands, regardless of what industry you’re in. Every company wants to position itself as a unique leader in its niche. And while some companies will have an easier time of it than others, it should never feel like a chore. Differentiation is the way you speak to customers and earn their attention over the dozens of other brands vying for their headspace – and as such, it should be a goal that your company tackles with gusto. Find the meaning behind your brand, learn what your customers expect, and test out new ways to surprise them.

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