How To Position Your Brand For Market Differentiation
You’ve probably heard the term ‘market differentiation’ thrown around in everyday business jargon, but what is it really about? How does it apply to your branding—and how do you go about positioning your brand in order to differentiate it from your competitors?
We’re here to help answer all of these questions. In this guide we'll look at what differentiation branding is all about, and we’ll cover a few strategies for positioning your brand effectively in order to stand out from competitors and establish a unique market presence.
What is Differentiation Branding?
Brand differentiation is the process of creating an identity that differentiates your business from other brands within customers’ minds. Brand differentiation allows businesses to demonstrate how their company offers something unique that others don’t—which helps them build loyalty within their customer base.
A brand strategy centred on brand differentiation can take many forms, including product differentiation, service differentiation, and channel differentiation. Each type of differentiation has its own unique benefits and challenges.
- Product Differentiation: Product differentiation is an effective strategy in the business world, giving companies a competitive edge and allowing them to stand out in the marketplace. This might be a standout product quality, or a unique product not available elsewhere.
- Service Differentiation: Service differentiation involves differentiating services to stand out from other providers and build loyal customer bases. With a unique service offering, you'll be more likely to stand out in a crowded market.
- Channel Differentiation: Channel differentiation means crafting a unique identity and value proposition across your marketing channels, such as your website, paid advertising channels, social media, and emails.
Why is Brand Differentiation Important?
Businesses need to stand out if they want to attract customers. Having strong brand differentiation can make all the difference here, as offering unique features, higher quality products or services, or outstanding customer service is one way to stand out in your customers minds.
Investment in unique brand-building is essential for any business, and can have a considerable impact when it comes to success. Brand differentiation is key to achieving long-term success and creating a competitive advantage, helping your brand remain relevant and on top even when the market is incredibly saturated.
How To Position Your Brand For Market Differentiation
Build a strong brand identity
A strong brand identity is important for both customers and employees. Your brand identity is the face of your brand, and will directly impact brand perception to potential customers and future potential employees. Industry leaders know that they need a standout identity to hit home with their target audience and ensure customer satisfaction from the get-go, even before they buy.
When building your brand, you want to encapsulate the unique qualities and brand values that make your brand stand out. Working with brand identity professionals is the best way to achieve this, as we know exactly how to craft a professional and differentiated brand identity, we just need to know more about you and your brand first.
Brands that establish emotional branding and evoke positive emotions such as joy, trust, and belonging can significantly influence customer perceptions and behaviours throughout the customer journey.
Develop a brand differentiation strategy
A brand differentiation strategy is a critical component of a professional services firm’s success, as it sets the firm apart from competitors and provides a competitive advantage. The digital marketplace is constantly changing, and what was once a competitive advantage may no longer be relevant. Differentiation is a continuous process that requires evaluating the marketplace and your brand regularly to ensure you are still positioning yourselves for success.
A strategy helps you make sure your brand's appeal lasts, with methods, goals and ongoing measurement to make sure you continuously meet customer demand and expectations in regards to differentiation.
Add an up-to-date and relevant USP
Once you have up-to-date user research and market research, you can identify where a relevant USP for your product or service might be hidden. What does your brand, product or service offer that others don’t? What specific problem does your product or service solve? Where do competitors fall short? Your brand should be all about the unique offerings you provide. Let them take center stage.
Personalize interactions
Did you know that emails with personalized subject lines have a 22% higher open rate than those that don’t? The fact is, personalisation catches peoples' eyes, turning unengaged users into new customers, and potentially loyal ones.
With the sea of data tools now available to businesses, you'd be holding yourself back not to make the most of them. Whether that's personalizing ads for specific audience sectors, crafting the perfect email subject lines for those sectors once they're on your email list, or having dedicated social channels for different products, purposes and audiences, there are a number of ways you can personalize channels in order to differentiate your brand from the rest.
Form co-branding strategic partnerships
Strategic partnerships can be a great way to differentiate your brand. Many companies take on joint ventures or partnerships to go after a new diversified audience or market, using the wider skills and brand image of the other brand to broaden their own consumer pool. General benefits of strategic partnerships can include:
- Access to new markets
- Increased resources
- Shared expertise
- Shared costs
- Increased brand awareness
By partnering with companies that have complementary but differentiated capabilities, brands can scale operations more quickly and efficiently while they leave a lasting impression on a new audience.
Focus on thought leadership and storytelling
Thought leadership is a tactic content marketers use to build credibility for themselves or leaders in their company. Expertise is a key component of thought leadership, and businesses can leverage their expertise to differentiate themselves. Whether it’s through SEO, email newsletters, or any other channel, a focus on thought leadership can be a great way to stand out.
Developing a unique approach to brand storytelling that defines your brand’s core values and mission statement can help create an emotional connection with consumers. Highlight the personality behind your company, including the founders and their journey, to help create a compelling brand. You can also use popular brand storytelling frameworks to help get you started.
Create exclusivity and scarcity
Creating a sense of exclusivity by highlighting the quality and craftsmanship of your products can help differentiate your brand. Offer limited editions of your best products to create a sense of scarcity and exclusivity, and higher price points to create a sense of luxury and value. Team your exclusive products with an effective marketing strategy to create and maintain consumer demand.
This goes hand in hand with "hype" marketing, where companies launch social media campaigns, often with the help of influencers or micro-influencers, to quickly grow a "hype" around their product or service. Successful hype strategies can go viral, quickly creating excitement and buzz around a product and ultimately boosting sales.
One prime example of this includes brands like... Prime Energy, who differentiate themselves based primarily on their "exclusive" aspects. While their physical products likely don't differ too broadly from other market entries, the differentiation branding has a feel of luxury and exclusivity, allowing for higher price points.
Final Thoughts
By following the strategies outlined in this guide, businesses can differentiate themselves and achieve long-term success.
At Huddle, we’re experts in transforming businesses into standout brands. We know how to package up your unique business offerings in the ideal way to help you make your mark in the industry. If you’re looking for support with branding services that help differentiate your brand, we’re the agency for you.
Brief us today to get started
Differentiation Branding FAQs
How to differentiate branding?
To succeed in differentiation branding, you should build a strong and unique brand identity that highlights your USP, stay on top of market and user research to see what gaps you can find and fill, create a sense of exclusivity and scarcity for your products or services, and prioritise thought leadership and building a unique brand personality through emotional storytelling. These tactics will help your brand attract attention and build customer loyalty over time.
What is an example of a brand differentiation strategy?
One recent example of a brand differentiation strategy is Prime Energy. They used hype marketing to create a sense of exclusivity around their product, allowing them to go viral with a high price point and make waves around the world. By making their product scarce but super on-trend, they drove desire for their products even if they weren't of a higher quality than others on the market.
What is a brand point of differentiation?
A brand's points of differentiation are the unique features, services and practices that contrast other companies in the industry. By maintaining brand consistency across all touchpoints with your points of differentiation as the focus, you can demand attention in your desired market.