What is Differentiation Marketing?

Simply stated, it means that you are perceived differently, in a positive way, from your competition.

A typical reaction might be to say, “I don’t need to differentiate. All I need is to give my client a quality product at a low price and that will do the job.” The fact is, that on one level, that is differentiation. You are setting your product apart by selling it for a lower price than your competition.

But why minimize revenues and profits when its not necessary? Selling at a reduced price doesn’t take full advantage of everything differentiation has to offer. Differentiation Marketing affords you the ability to sell on many levels and achieve all of your marketing goals. People will pay a premium for a preferred brand and selling on price alone does little to establish brand preference. Department stores do this all the time. Otherwise, Bloomingdales wouldn’t be able to sell the same name-brand clothes for twice the price as Marshall’s. By selling a product or service that is similar to your competition’s on price alone, you’ve left little else on which your customer can make a buying decision.

Differentiation Marketing has four major goals:

1. Build brand preference
2. Position your company as a leader in your market
3. Create product/service awareness
4. Build customer loyalty

None of this happens if your customer can’t distinguish you from your competition. Differentiation is key to any successful marketing program, because it is what gives your customer an understanding of your unique personality and a reason to remember you when it is time to buy. It gives your customer the special reason they are looking for to buy from you. Positively different makes the perception of your product better.

Lets take the the product that was selling only on price and add Differentiation Marketing. Develop a unique corporate identity with concept driven capabilities and product brochures and you start to build brand preference and position your company as a leader. Develop ads that not only promote economy, but unique features, benefits and quality manufacturing and you begin to build product awareness. Design a high-end identity and package, and all of a sudden, you have raised the perceived value of that product. Follow through by delivering what you promised, when you promised and you build customer loyalty. The difference between this and a typical marketing program is that with every effort you do everything you can to distinguish yourself.

In business to business marketing, differentiation is the process of positioning a company, product or service to avoid confusion with a similar company, product or service. To be different, you need to try new approaches, approaches never before attempted. This involves taking risks, not doing the same things that your competition does. Differentiation Marketing works when brands and products are remembered and purchased.

For marketing to work, brands and products must be remembered. To be remembered, marketing must be unique. Being unique means being different.

Benefits and Characteristics of Differentiation Marketing

• Unique Identity
A unique identity is what separates your brand and product from your competition in your customer’s mind. When this identity is carried throughout all of your marketing, your customer is less confused about who you are and what your product or service are all about.

• Top of Mind Presence
Before your customers can buy from you, they must remember you. When Differentiation Marketing is done right, you benefit from your company and product or service being more ‘rememorable’.

• Reason To Buy
Differentiation marketing makes it clear to your customer exactly why they should buy from you–it gives your customer a unique reason to do business with you.

What Are The Characteristics of Differentiation Marketing?

• Big Idea
The “big idea” is the single message that you want your customer to understand. The “big idea” is an important part of what it takes to get your customer to buy from you. Your “big idea” is not your competitor’s “big idea”, it is uniquely yours.

• Fresh Approach
Now you have to communicate that “big idea”. It’s not enough just to say it, it’s all in how you say it that makes the difference. The best and most effective marketing assumes a new and fresh perspective to deliver the message. Nothing differentiates more than a concept driven, new way of looking at a market. If the “big idea” is communicated in an innovative, interesting and entertaining way, it is more ‘rememorable’. (see above)

• Appropriate
The message, concept and delivery must be appropriate for the market. This does not mean expected advertising, however, it just means that it must be done in a manner to which your market and the audiences within your market will relate and respond.

Now that you know what Differentiation Marketing can do, the logical question is “how does it get done”?

Four Steps of Differentiation Marketing; The Four I’s

1. Investigate
   This is the stage where you take a close look at your strengths and weaknesses. It is when you objectively look at your company and its brand identity. The goal of this stage is to gather enough information to make intelligent decisions throughout the next four stages. Here are some questions you should ask:
   
   • What is(are) my market(s) and what audiences do I need to address in that(those) market(s)
   • What products or services do I offer?
   • How good or bad are they? How do they stack up against the competition? What do I do well and what am I doing correctly?
   • What do I do poorly and what am I doing wrong?
   • What is my competition doing and what are they doing right and wrong?
   • How do I measure up to my competition–where do I beat them and where are they beating me?
   • Is there anything new that I should offer?
   • Is there anything I am offering that I should not?
   • How am I marketing, how is my competition marketing and where do we differ? Where are we the same?
     
     
2. Identify
   Now it is time to specifically identify your brand and discover how to apply it to your products. What are your strengths and weaknesses? What do you throw away and what do you keep? This is the time to establish the identity of your company, to strictly identify the products and services you will offer and where should these products and services be positioned in the market. Set a direction for yourself and identify what you want your market to know about your company and its products and services. Now is when you identify your market(s) and the audiences within the market(s).
   
   
3. Innovate
   This is where differentiation marketing takes form. Look at how your competition is marketing itself and figure a way to to do it differently. This calls for innovation and and it can come in any form. Next, you need to decide what vehicles you are going to use to get that message to your audiences. How are you going to tell them what it is they need to know. An engineer will get your message from one vehicle–maybe your web page, a tech note or engineering publication–while an executive will probably get information from somewhere else like a magazine written especially for him. There are many vehicles you can use to market yourself–direct mail, advertising, the web, public relations; they just have to be right for your target. The innovation stage selects the best ways to reach your market and get your powerful marketing message to your customer base.
   
   
4. Initiate
   Initiate the development of your marketing program. Review all your possibilities and make a road map for your action. This is where the work gets done and the program takes form. Identities are established, brochures are designed, media is planned, press releases are written. The purpose of this stage is to develop your plan of action that will get your message to the right market and audiences within that market.
   
   Now that you have your plan and the tools to start, do it. Follow your program but don’t be rigid. There will be unforeseen circumstances that you did not predict and therefore did not plan for. Think of them as opportunities to expand on your existing program and use them to your advantage.
   

A Few Words About Differentiation Marketing and Corporate Identity

Differentiation Marketing requires a unique corporate identity. Most companies want to be perceived in a way that will encourage customers to do business with them. To do that you must first know what sort of “personality” appeals to your customer. With what sort of identity will your customer feel comfortable doing business, while at the same time, differentiating you from your competition? Your corporate identity is the cornerstone to developing a successful brand. Most people think of a corporate identity as a visual thing. And the visual thing, of course, is a big part of it. But your corporate identity is, or has the opportunity to be, much more than visual. Your corporate identity goes way beyond the logo and stationery. The identity of your company includes graphics, sure, but it also includes words. These words speak volumes about your company–not only in what they say, but in how they say it. These words and images give your organization its own distinct personality and your corporate image plays a large role in forming your customers’ opinions about your organization.