Differentiation: This is why Brands should be like Ice Cream Flavors
Ice Cream comes in many flavors, but not everyone likes the same kind of ice cream.
In terms of differentiation, brands can learn a lot from these flavors.
Let’s dive in.
Contents
CHAPTER 1:
How Consumers select Ice Cream
Ice cream is one of the most popular treats on a hot summer day.
It’s safe to say that most people have enjoyed ice cream at least once in the past years.
The best way to get gelato (Italian for ice cream) is probably to get it in a waffle cone from an ice cream truck, where endless flavors are listed on an overhead board and displayed in buckets below.
Which ice cream flavors can people choose from?
When it comes to variety, there are many flavors to choose from.
Within the category of ice cream, you could categorize all flavors into sub-categories, like:
- Ice Cream and
- Fruity Sorbet
In each category, you’ll have the chance to choose from quite a number of flavors.
For example, you could choose ice cream flavors like chocolate, stracciatella, or vanilla.
Alternatively, you might as well opt for sorbet flavors like strawberry, orange, or lemon.
Then there are always new flavors (trends) trying to become popular.
Only some of them make it (like Cookie Dough, yum). Others not so much (like Bubblegum, gross).
While some flavors are more popular than others, which one you’ll choose solely depends on your taste, and your mood.
How people choose a flavor of ice cream?
Although most people like ice cream, not everyone likes the same kind:
- Some people favor having variety and like giving new flavors a shot.
- Others like a bunch of flavors and always choose among them.
- Again others only like one flavor and stick to it for their entire life.
Then again, some people don’t like ice cream at all. Others like every kind of ice cream.
As you can see, consumers benefit from a variety of flavors.
What if there was only one flavor of ice cream?
If there were only one flavor, many people would not eat ice cream at all.
For example: let’s say there was only chocolate and you don’t like that flavor.
Why should you eat it?
Basically, this is the reason why there are so many flavors.
Only in this way, there’s pretty much a flavor for everyone.
All in all, the example illustrates the functioning of natural market differentiation very well.
Next, let’s look at what the selection of ice cream flavors has in common with the way consumers choose brands.
CHAPTER 2:
How Consumers select Brands
Ice cream is a great metaphor to understand how consumers choose brands.
If all brands within a product category were the same (e.g., all brands were like chocolate), choosing a favorite brand would be impossible.
Consumers need diverse brands (or many flavors of ice cream) to develop preferences for the brands that suit them best.
How do Consumers compare Brands?
Within a market, all brands are fighting for market share, to put themselves at a competitive advantage.
However, not all brands are in direct competition with each other.
Consumers view brands in categories and sub-categories.
For example: let’s say you want to buy peanut butter.
In the store, you wouldn’t compare peanut butter to car tires or sneakers.
You’d compare all the different brands of peanut butter.
If anything, you’d compare peanut butter brands with different spreads (like jam or cream cheese).
However, in general, consumers compare brands within one product category.
How do consumers choose brands?
Consumers choose brands like they would choose ice cream:
- Some consumers are experimental like to try out new brands.
- Others have a relevant set in which they choose the one with the lowest price.
- And then again, others are incredibly loyal to a specific brand for their whole life.
It becomes clear that just like consumers benefit from a variety of ice cream flavors, they also benefit from a variety of brands.
What if there was only one brand?
If there were only one brand to choose from, many consumers would not be able to choose a brand that fits them and their needs best.
Instead of choosing the one brand, many would choose none.
Brands differ from one another in so many attributes, with the price being the most obvious:
If there was only:
- One expensive brand of peanut butter, many consumers would not be willing to pay the price.
- One cheap brand of peanut butter, many consumers would assume the quality to be bad.
Instead of choosing the only brand of peanut butter available, they would substitute for a different spread.
Only if the brands within a product category differ from one another gradually, consumers can pick the one that suits them best.
This is why differentiation is so crucial.
CHAPTER 3:
Differentiation done Wrong
Although many companies have the will to differentiate, they do not succeed in unfolding the actual potential of their brand.
Instead of a quantum leap in differentiation, every new brand project ends up with a tiny step in the right direction.
Because management follows the wrong differentiation strategy, they feel like they are just treading water.
What is the wrong differentiation strategy?
Differentiation is done wrong if a brand tries to beat the market leader with better products, better advertising, and better-motivated employees.
Anyone who has ever has worked for a non-market leader knows that this has never worked and never will.
Nevertheless, many marketers fall into the trap on below train of thoughts:
- “I don’t understand.
- Tests show that our products are as good as the market leader’s products.
- In fact, they score even better than the market leader’s products.
- Also, our prices significantly lower.
- Why do the “dump” consumers don’t understand?”
Because consumers don’t buy because of quality or price.
Consumers’ buying decision solely depends on their perception of a brand.
Why do so many Brands lack of differentiation?
Generally, brands lack differentiation, once they focus on competitors and standards in their industry too strongly.
If you look at brand communication in many industries, you will come across an interesting phenomenon: Products, services, and advertisements have become very similar to one another over time.
This creates the impression that everything is the same. Everyone claims that their product is better and cheaper.
The result: potential customers are perplexed.
As consumers get the impression that everything is the same, price becomes more and more as a decision-making criterion.
The consequence is that brands are competing on price with comparable products and services (while some also try to differentiate emotionally – hint: it does not work).
Everyone in the industry competes on the same features.
The best possible result is a slight edge in these features (which competitors will catch up quickly).
Establishing meaningful differentiation is the only way out of this rat race.
CHAPTER 4:
Differentiation done Right
Meaningful differentiation means that your products and services vary to the once of your competitors a lot.
It’s super important because it avoids interchangeability.
Here’s how you can do so.
How can differentiation be achieved?
Differentiation can be achieved by optimizing your brand, rather than adapting to the brand of a competitor.
Strong brands should always strive to be unique instead of trying to copy a competitor.
If strawberry were trying to be like chocolate (reread Chapter 1 to understand the similarities of brands and ice cream), strawberry would still just be a bad version of chocolate.
However, if strawberry were attempting to become the best version of itself by adding little pieces of strawberry and sprinkles, it would have the chance of turning chocolate fans to strawberry fans.
That’s why brands should always focus on optimizing their products and services instead of copying their competitors.
The best way to do so is by identifying the unique characteristics of your brand.
How to identify unique characteristics?
For your brand to differentiate within a product category, it must be truly different from your competitors.
By identifying characteristics that make your brand stand out, you emphasize the uniqueness of your brand.
To do so, identify relevant Points of Difference and Points of Parity:
- Points of Difference make your brand offers unique features that make it stand out from the competition.
- Points of Parity make sure your brand complies with essential features within a product category.
Points of difference make sure that your brand is
- desirable to consumers,
- deliverable by your company, and
- differentiating from your competitors.
Points of parity are essential attributes
- within a product category or
- in comparison to other attributes.
By integrating differentiating points of difference and essential points of parity into your brand positioning, you ensure that your brand stands out from the competition, while it doesn’t lack any key features.
In this way, your brand profits from the benefits of differentiation.