A case for Differentiation Strategy by Brands

In today’s business environment, one of the most important marketing strategies deployed by businesses is the ‘Differentiation strategy’. With the marketplace filled with different brands, large varieties of products and very loud advertising noise; it can be very difficult but ultimately very necessary to differentiate your brand from competition. In order to achieve this, different top brands and industry headliners use differentiation strategy for their products, and they are intentional about it. There are various ways to put the toga of distinction on your product through the use of a differentiation strategy

1) Innovation / Invention
The best way to implement differentiation strategy is to invent or innovate. By innovating or inventing, you become the market leader because your product is the pioneer in the market. Inventions are, of course, difficult and require regular Research and Development (R&D) expenditure. Even with that, many companies, especially technological brands, put premium on innovations because they are more practical and invaluable as a differentiation strategy. Apple, Google and Microsoft are some of the brands that speak for this.

2) Product-level differentiation strategy
Differentiation strategy can be executed at product level too, and this is known as product differentiation. Using the tourism industry as an example; tour packages of all companies are different, each with its own differentiating factors. Some give international tours, whereas others may focus on national and regional tours only. Thus, by incorporating product differentiation strategy at product level, the brands can use differentiation strategy to position themselves different from competitors, in the eyes of the customer.

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3) Price differentiation strategy
The most used form of differentiation strategy is price differentiation. In the above example of tour packages, some brands might give the luxury package whereas other brands might give a cheap and affordable pricing. Mobile phone companies like Samsung and Apple target the cream segment whereas brands like Itel, Tecno and Infinix target the price sensitive segment. Price segmentation can be the biggest differentiation weapon in the hands of marketers.

4) Branding
The promotion mix, as well as marketing communications of a company plays a crucial role in the differentiation strategy of its product. Many brands rely heavily on their branding efforts to convert customers to their products. A brand’s promotion mix helps it to target the correct segment and hence plays a crucial role in differentiation strategy.

5) Packaging
If you go to any publications and ask them what are the critical factors in selling a book, the publication agency will say that, after the story of the book, the top cover of the book plays a critical role in the success of the book. In fact, many a times, customers might buy a book based on the top cover. Thus, packaging is important. The same can be seen when you enter a store and you see shelves stacked with different types of products. At such a time, the colour, the packaging, the taglines, the ease of handling can play an important role in converting the customer to the brand.

6) Pre and post-sales service
Word of mouth marketing is another product differentiator and all brands targeting a niche audience know the importance of word of mouth marketing. And how does word of mouth marketing happen? This is done through very good pre and post-sales service. Ever heard a friend say that not only does the restaurant serve good food, but the service and the ambiance are awesome as well? If your service is beyond customers’ expectations, then that can be a big boost to your differentiation strategy

7) Point of customer interaction
There are different categories of customers. A brand has to ensure that it takes care of all kinds of customers, when they interact with the company. For this, point of interactions is important and any brand willing to be the preferred choice of customers, must ensure that they get good experience whenever they interact with the company. This should not be a once-in-a-year customer-service week thing. A service company which does not have good interactions with its customer will always suffer in its profits and operations.

8) User convenience
The banking industry shows us an example of how User convenience is a good differentiation strategy. The banks differentiate themselves with the different types of banking services and products that they offer, all aimed at making banking convenient and stress free (although a good number of them still fall short of what they advertise). But it is an excellent example of differentiation through user convenience.

9) Offer variety of products
Another way to implement differentiation strategy is to attack the psychology of the customers. Many a customer will tell you that they picked a brand just because the brand had more variety in the number of products it offered. Customers like to have varieties to enrich their assessments and choices. Thus, the more variety of products offered, the more chances a brand has of getting a higher positioning in the mind of the customers and therefore, differentiating itself from competition. This is a high investment strategy, because you need to invest in a product line, but it is useful and profitable in the long run.

Last line: What any brand has to realise is that it cannot sit back and hope to freely enjoy customers’ loyalty today. In this saturated business environment, each and every company has to take steps to differentiate itself from competition and ensure that it has a high positioning in the customer’s mind.