Brand Differentiation vs. Brand Distinctiveness – What Matters More?

This story was originally posted on BrandStruck.

If it were not for the academics representing The Ehrenberg-Bass Institute for Marketing Science, (mainly Byron Sharp, Jenni Romaniuk and the late Andrew Ehrenberg), we would probably still think that brand differentiation and brand distinctiveness are just two different words that mean the same thing – uniqueness of a product or company. Thanks to the Institute we now know that brand differentiation and brand distinctiveness are two very different concepts and that one is of much higher significance than the other.

Although a number of articles (including our own) have covered this topic already, we would like to further add to the body of knowledge on it for three reasons:

1. We believe that many professionals are still not aware of the findings of The Ehrenberg-Bass Institute and/or don’t know how to apply them.

2. We have noticed that some marketers and strategists misinterpret the Institute’s research conclusions in order to better fit their company agendas.

3. We would also like to contribute our own ideas to the discussion.

The original research paper on brand differentiation and distinctiveness can be found here(“Evidence concerning the importance of perceived brand differentiation”). We also recommend the book written by Byron Sharp entitled How Brands Grow.

 

Brand differentiation vs. distinctiveness – what’s the difference?

Put simply, brand differentiation occurs after a brand strategy (positioning) based on a unique selling proposition (USP) has been implemented. In fact, this is what many marketers are striving to achieve, ensuring the brand they are responsible for is perceived as different and more unique than its competitors.

Some brands build differentiation on a significant advantage of their offering, e.g., Amazonwith its promise of the widest selection of products, the lowest prices and the convenience of delivery. Some achieve differentiation by using specific words to describe their brand, e.g., Chivas Regal’s brand strategy is built around chivalry.

While brand differentiation happens primarily on a strategy level, brand distinctiveness is more tactical. It is about obtaining a unique look and feel and not being mistaken with competitors. Brand distinctiveness is achieved by using consistently distinctive brand assets – branding tools that help customers identify the brand in different environments – like logo, colour palette, font, tagline, images and words.

 

Brand differentiation vs. distinctiveness – what’s more important?

The Ehrenberg-Bass Institute, based on long-term research in multiple product categories, concluded that strategic differentiation (delivered through unique positioning) is not as significant as originally thought.

Marketers who believed that a brand’s strategy should be based on a unique proposition (“differentiate or die”) in order for it to achieve commercial success were presented with evidence that strategic differentiation is not as important as it was thought to be. In the majority of categories, consumers do not notice the communicated differences between brands, they do not find any of them particularly unique and, as a result, brand user profiles (within a category) are very similar to each other.

In contrast, brand distinctiveness (delivered through strong and consistent branding), is what really matters. Not because it makes people appreciate the brand more but because it makes the brand easily identifiable and memorable. As Byron Sharp in How Brands Grow explained, “Rather than striving for meaningful, perceived differentiation, marketers should seek meaningless distinctiveness. Branding lasts, differentiation doesn’t.” Therefore, the main conclusion from the research is that marketers should spend more time and money building distinctive brand assets and ensuring that they are associated with their brand only. They should spend less time and money developing elaborate positioning strategies rooted in unique selling propositions. Similarly for brand measurement, instead of measuring insignificant differences in brand image, companies should focus on measuring how unique and easily identifiable their distinctive brand assets are.

Think about brand pairs – Nike and Adidas, Coca-Cola and Pepsi, or UPS and FedEx – and how easy or not it is for consumers to decode their brand positioning. Would consumers be aware that Nike is about overcoming one’s weaknesses and that Adidas is about creativity in sport? Or that Coca-Cola promotes happiness and that Pepsi promotes fun? Would they be aware that UPS is “in the problem-solving business” while FedEx “connects people and possibilities”? It can be assumed that not many consumers would. However, most of them without any doubt would easily identify the Nike swoosh, the Adidas three-stripe logo, Coke’s red, Pepsi’s blue, UPC’s brown and FedEx’s purple. A picture is worth a thousand words.

Having analyzed the strategies of hundreds of brands for BrandStruck, we have also come to a conclusion that the best and biggest brands do not have a differentiating positioning. Rather, their brand strategies sound almost generic (read, for example, our article on the positioning of the most valuable brands in the world). It’s the relevance of their proposition and its flawless execution which makes them so successful.

 

Is brand differentiation always useless?

We support The Ehrenberg-Bass Institute’s research conclusions and we always advise our clients to apply these findings.
However, in our experience as brand strategists, there are at least three instances, when strategic differentiation, coupled with distinctiveness, can play an important role and lead to better commercial results. They are:

1. Meaningful differentiation
Meaningless differentiation is a waste of any company’s resources. If one company in a category defines its mission as “unlocking people’s potential” and the other as “empowering people to dream bigger”, it is unlikely customers will understand these subtle differences in messaging.

However,  differentiation can be achieved and noticed when it is based on a true and relevant difference in the brand’s offering, in particular, when the brand manages to create a new product sub-category.
Not many brands have succeeded in achieving that but there are some strong examples: Red Bull, GoPro, Tesla and even Target, which has managed to build a different brand perception (“affordable and chic”) than its biggest competitor, Walmart.

This does not mean that these brands’ user profiles are different to those of their competitors, it is likely they are actually quite similar. Yet in these rare cases, consumers can actually explain how the brands differ or are unique in what they are doing compared to a wider set of competitors.

2. Internal audience
While consumers do not generally pay a huge amount of attention to brands and their narratives, employees do. A good brand strategy differentiating the company from its competition can give workers a sense of purpose.

Our experience is that employees who don’t know their company’s strategy and who are not aware of its unique strengths are often disengaged and indifferent as to whether it will succeed or not. On the other hand, when they understand what makes their company different and better, they are more motivated and more inclined to stay there longer. For example, Microsoft’s performance, brand value and share price significantly improved after the appointment of Satya Nadella as CEO in 2014 when employees were made aware of the company’s new mission and the associated planned changes.

3. Guiding distinctiveness
From our experience, it is difficult to build brand distinctiveness without brand differentiation. Differentiation guides distinctiveness. The colours a brand uses, the fonts, tagline, tone of voice and many other branding assets are generally based on a sound brand strategy. Companies do sometimes create branding assets not rooted in strategy, e.g., distinctive but random colour or shape. However, in most cases, creatives such as designers and copywriters will want to work to a brief that defines what the brand stands for and what values and emotions it wants to build. Even if customers do not identify the brand message in the selection of colours or the typeface, subconsciously they will know that certain branding clues can signify strategic differentiators such as premium quality, a healthier option, a variant for children or a fun and cheeky character of the brand.

 

 

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