What makes a brand different?
In Chapter 8 of How Brands Grow, Byron Sharp states: "Rather than striving for meaningful, perceived differentiation, marketers should seek meaningless distinctiveness. Branding lasts, differentiation doesn't."
Brands need to be different and distinctive
I believe that truly strong brands – the brands that command a price premium and still grow faster than their competition – possess both qualities and that both are important. But people often assume that differentiation and distinctiveness are the same thing. With that in mind, here is my take on differentiation. You can find my definition of distinctiveness here.
Differentiation separates a brand from its competition
To be perceived as different a brand must possess a contrasting element that distinguishes it from close competition.
Differentiation is grounded in how a brand is experienced and perceived by the consumer. Differentiation for differentiation's sake, however, will have little positive effect, the customer must perceive that the difference makes the brand more valuable to them. To influence purchase behavior, it must make the brand more meaningful to the buyer in some way.
Differentiation based in tangible brand assets
Differentiation is most potent when it is based on a relevant and tangible aspect of the product or service that can be experienced through the senses. But, as many are quick to note, this form of differentiation can easily be matched by competition if it appears to offer the brand some form of advantage with customers. And features that might be technically differentiating might go unappreciated by the public. Which is why perceived differentiation is often based on less tangible qualities.
Differentiation based on intangible assets
Differentiating and intangible assets can include provenance, a track record of innovation, or, increasingly, social and environmental responsibility. And people's memory of unique product features can long outlast their existence in the real world. A large part of the function of effective marketing is to create perceived differentiation, highlighting differentiating aspects of the brand or creating unique memories and experiences that help distinguish the brand in peoples' minds.
Brands are perceived as different
Sharp et al are keen to note that relatively few brands are perceived to be different from their competition. This is true to a degree. And therein lies its importance. Look at disruptive brands like Tesla, Amazon, Netflix, Uber, and TikTok. They are all perceived to be different from their competition. Look at long-established brands like Geico, Nike, Heineken, Olay, and Coca-Cola. They too manage to be perceived as different. Perceived differentiation allows a brand to grow fast and command a price advantage over close competition.
Unperceived differentiation
Much of the debate over whether differentiation matters focuses on consumer attitudes. But brands can gain competitive advantage over the competition from aspects of their business model not directly perceived by the end-consumer. In The Great Repeatable Business Model, Chri Zook and James Allen identify 15 basic categories of differentiation, only half of which might impinge on directly on consumer perceptions. So do not assume that just because a brand is not perceived to be different that it is commoditized, its business model might be what sets it apart.
Brands need to be different and distinctive
I believe that truly strong brands – the brands that command a price premium and still grow faster than their competition – possess both qualities and that both are important. But people often assume that differentiation and distinctiveness are the same thing. With that in mind, here is my take on differentiation. You can find my definition of distinctiveness here.
Differentiation separates a brand from its competition
To be perceived as different a brand must possess a contrasting element that distinguishes it from close competition.
Differentiation is grounded in how a brand is experienced and perceived by the consumer. Differentiation for differentiation's sake, however, will have little positive effect, the customer must perceive that the difference makes the brand more valuable to them. To influence purchase behavior, it must make the brand more meaningful to the buyer in some way.
Differentiation based in tangible brand assets
Differentiation is most potent when it is based on a relevant and tangible aspect of the product or service that can be experienced through the senses. But, as many are quick to note, this form of differentiation can easily be matched by competition if it appears to offer the brand some form of advantage with customers. And features that might be technically differentiating might go unappreciated by the public. Which is why perceived differentiation is often based on less tangible qualities.
Differentiation based on intangible assets
Differentiating and intangible assets can include provenance, a track record of innovation, or, increasingly, social and environmental responsibility. And people's memory of unique product features can long outlast their existence in the real world. A large part of the function of effective marketing is to create perceived differentiation, highlighting differentiating aspects of the brand or creating unique memories and experiences that help distinguish the brand in peoples' minds.
Brands are perceived as different
Sharp et al are keen to note that relatively few brands are perceived to be different from their competition. This is true to a degree. And therein lies its importance. Look at disruptive brands like Tesla, Amazon, Netflix, Uber, and TikTok. They are all perceived to be different from their competition. Look at long-established brands like Geico, Nike, Heineken, Olay, and Coca-Cola. They too manage to be perceived as different. Perceived differentiation allows a brand to grow fast and command a price advantage over close competition.
Unperceived differentiation
Much of the debate over whether differentiation matters focuses on consumer attitudes. But brands can gain competitive advantage over the competition from aspects of their business model not directly perceived by the end-consumer. In The Great Repeatable Business Model, Chri Zook and James Allen identify 15 basic categories of differentiation, only half of which might impinge on directly on consumer perceptions. So do not assume that just because a brand is not perceived to be different that it is commoditized, its business model might be what sets it apart.
What do you think? Do you have a different take on differentiation? Please share your thoughts.
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Comments 3
Guest - Mark Russell
on Friday, 01 April 2022 10:15
Hi Nigel, I’m commenting here after you posted a link to this article on April 1/22.
Volvo is still perceived to be different based on their long-held safety positioning, even though technically most competitors have equaled Volvo. People believe it, so it’s still effective.
But, this ‘safer’ perception is never/ can never be tested because of course no one wants to crash their Volvo, and even if they do, the result of the crash can’t be compared to another brand.
So is this the most perfect point of differentiation? It’s perceived to be real by owners but cannot be tested by owners.
Nigel Hollis
on Friday, 01 April 2022 10:29
Perfect! In a similar fashion, I still tend to think of Audi as having great AWD, initially based on seeing ads demonstrating its capabilities, and then owning one. Of course, you then realize that tires have as much to do with traction as the drive system!
Guest - JD
on Wednesday, 31 May 2023 06:01
Great article and analysis - thanks Nigel. It was very balanced.
I would agree about the importance of the interplay between tangible / intangible assets.
I also think you're spot on about perceived differentiation, in that it is much sought after but difficult to attain - strong, perceived differentiation is the Holy Grail of branding, but it can't be the Holy Grail if it's easily achieved, can it? It also can't be achieved without an extremely consistent, enduring brand positioning.
So, I think you and Sharp are right - Sharp emphasises the importance of the heuristics of brand (via distinctive brand assets), and access (the prosaic, but often overlooked stuff), but after this brands should pick a strong defensible position by deploying both tangible, and intangible brand assets and sticking to them.
Together, they can create a compounding effect that results in the 'Truly Great Brands' that are so rare, and so often the object of scrutiny (and awe) among brand managers and aspiring marketers.