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Author: Gaurav Bahirvani Article source: http://www.kabish.com/. Used with author's permission.
The so called 'globalisation' has cluttered the world markets with so many products and services that nearly 90% of the marketing managers in competing companies do pretty much the same to sustain in the market. There is not much difference in the way P&G operates as compared to how Unilever gets its products to the market. Coke and Pepsi's operations nearly reflect each other and all that these two compete is on 'who spends more on advertising this year'! If one disagrees with this argument by saying "we provide better quality products/services", then don't forget that this is precisely where your competitors put their efforts as well. Southwest Airlines, the revolutionary domestic American low-cost no-frill airline, most of the time does exactly what its competitors do. Well, the only difference is that Southwest Airlines serves meals in the airport during waits and not on the plane. This in no way means that Southwest Airlines is performing better than its competitors. If you are doing well what you are supposed to be doing, then that is not differentiation but a prerequisite for competing. Also, doing the same things in a better way is a deserving effort but not a strategy, especially in the long run. If all the competitors in the industry tend to converge into an equable level, of prices/costs, quality, technological sophistication, service quality etc, how, then are you supposed to compete? In this scenario, what most management consultants will advise you is either to offer you clients with more than what your competition offers, for a higher price, for the same price, for a lower price or offer them less value for a lower price. But remember that all these options can give you a short-term edge, but will usually not sustain as you competitors will soon follow the bandwagon!
At this stage, one might say well why not target a niche market. You could offer something unique to a market that your competitor does not. You can cater a need not formerly satisfied by your competitor. The best example in this case is Nokia, the mobile giant who started selling cell phones more as a fashion accessory than a communication tool. Another example could be the retail chain NEXT, that saw the gap between the low cost low quality retail store such as PRIMARK and high cost standard quality stores such as GAP and entered the market to offer customers with products which fitted 'somewhere in between'. But as I have mentioned above, there is no guarantee that you would be the only one enjoying the benefits. Very soon, you will find yourself competing with many more competitors than what you had before you decided to enter this niche! But if your product/services is something that is difficult or impossible to imitate, or it is something that your competitors might not want to imitate - then you might just have created a mini-monopoly of your own. And this is definitely an accomplishment that should not be underestimated in a competitive market.
Many would agree that all the above mentioned moves are nothing but strategies to compete in the market. But what really is a strategy? By definition, strategy is a way by which you plan your moves to achieve your objectives. A more interesting view of 'strategy' can be gained by understanding John Nash's Game Theory. In simple words, strategy is not what you will do, but 'how' you will do it. It is not what you will attain in the end but more so on 'how' you will attain it. Every football team has a strategy before the match, Mike Tyson always had a strategy before he got down on the ring (sometimes quite brutal! ), Michael Schumacher always has a strategy before he decides to take a pit stop! What all these simply imply is that a strategy is the way by which you plan to achieve an advantage over your rivals/competitor - in the eyes of your customers. Almost always, preference can be achieved only by differentiation, by either doing something other than what your competitors are doing or by doing things in a markedly dissimilar manner. By being different you supply some of the consumers in some of the buying/consuming opportunities with a good reason to want you more (and if you are a great strategist indeed - to want you only).
A winning brand strategy—one that is integrated into a company's overall business strategy can make a huge difference in overcoming these challenges. Obviously, a powerful brand can cut through the noisy clutter of the marketplace, heightening awareness of a product or service and shifting demand in its favour. But a strong brand can do more than simply help companies stand out from the crowd; it can help them break away entirely. Increasingly, we see the winning company in an industry transforming its early lead into a brand driven emotional momentum that leaves runners-up in the dust. Thus, a strategic brand move is a bit more than just doing something different than your competitors.
Differentiation definitely gives one an advantage in the market but what is more important is to develop a 'strategic differentiation', which is not everyone's cup of tea. Other forms of differentiation that many companies have often adopted are either 'ephemeral differentiation' or 'indirect differentiation'. Ephemeral differentiation allows one to promote the brand in a short period of time. Some examples could be a month long advertising campaign or a big sales promotion campaign. Alternatively, indirect differentiation consists of things like historical monopoly, location etc. But none of these provide a long lasting circumstance crossing advantage. Many organizations believe that differentiation is necessary for enabling the consumers to choose between alternatives in the market. I agree. But what organizations fail to understand is that more than differentiation, it is the perception of the consumers towards the brand that has a strong effect on his/her buying behaviour. Coca-Cola, Pepsi, Nescafe, Tango, Milk, Evian etc. are all alternatives for a consumer to quench his/her thirst. But when he/she is in a store, it is their perception which activates and starts dominating the movement of their hands! Any of the above would ultimately provide value to the consumer by meeting his needs- thirst. More often than not, most of the available options in the market offer their consumers 'what matters most'.
The idea of differentiation is to develop your strategy in such a way that your consumers think of you as exceptional. They will act as your success engine, even amongst consumers who are not as definite in their attitudes. BMW fans do not believe that Mercedes is a bad car; it's just that it is not a BMW. For them, Mercedes is simply incomparable to BMW. That's how Apple fans feel about IBM. Strategic differentiation is thus a combination of the brand strategy and the competitive strategy in such a way that the brand itself becomes a strategic differentiator. Or more accurately - the brand strategy is the translation of the competitive strategy - into a language of promises made to the consumer.
Thus the strategic importance of branding is something that needs to be understood by those who want to make a difference. Today, brand building no longer constitutes a mere manipulation of the consumer's perceptions and desires, but it is a creation of a system that on the one-hand makes promises and arouses anticipations, while on the other-hand it delivers and realizes the promises that it makes. If your moves are right, you will definitely win the jackpot! You don't necessarily need to do something different, but you need to do the same things differently! By Gaurav Bahirvani
Gaurav Bahirvani is a Corporate Brand Development Analyst living in Manchester, England. For any further queries or discussions on issues related to branding and marketing, please feel free to get in touch with him on gaurav.bahirvani@gmail.com
*Special thanks to Dr. Herman's views on strategic branding.
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