When you're first launching a new business venture, it may feel like you've got more important things to worry about than what makes you different from your competition. But the truth is, finding the unique space for your product or service can be the difference between shuttering your doors or turning a profit during that tenuous time when you're just starting up your operation.
Differentiation is a fundamental concept in marketing. Without differentiating what you're selling, the customer has no reason to give your brand a try. In an era when there will very likely already be multiple competing companies in any given industry, your startup has to stake a claim as to why it is needed and what value it brings that others do not.
That leads us to another essential marketing term: Positioning. Many people confuse positioning and differentiation -- others think they are one and the same -- but in fact, the latter is needed to determine the former.
O.C. Ferrell and Michael Hartline give one of the more succinct descriptions in their Marketing Strategy (Cengage Learning) textbook, which is now in its 5th edition and available through Google books: "Whereas differentiation is about the product itself, positioning is about the customers' perceptions of the real or imaginary benefits that the product possesses."
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Watch almost any television commercial, and you can see these principles in action. A mouthwash adds peroxide and promises whiter teeth. A beer describes its cold-filtered brewing process and promises better taste. An airline promotes its free luggage policy and promises lower costs.
All of these are examples of using points of product differentiation in a way that establishes a market position. Once owned by a company, it becomes difficult for competitors to break in without finding their own unique selling points.
Here are some differentiation strategies to consider as you formulate your own marketing plan:
Features."A product that solves problems faster, solves the same problem cheaper, a product that has more features than a competitor is worth paying more for,"writesBrand Uniq blogger Michael Baicoianu. Think about a valuable component of your product or service that competitors are not touting and make that the focal point of your campaign.
Process. Anyone who has seen the pilot episode of Mad Men is familiar with strategy. Even though every cigarette at the time toasted its tobacco, Don Draper was the genius that made it sound singular to the Lucky Strike brand. Using how something is made as a differentiator frequently falls under the "imaginary benefits" in the Ferrell/Hartline definition, but it is effective in establishing a market position.
Price/Quality. These can be two sides of the same coin. A premium product or service would use superlatives like "superior" or "finest" -- to imply it is worth the additional expense. Meanwhile, a less expensive product would use words like "cost-effective" and "affordable" to create the impression of similar quality at a lower cost.
Service. While good customer service should be a given for any business, there are aspects that can be used to differentiate your business. In much the same way, adding a feature to a product, being open later or on weekends, or offering guarantees creates a market position that puts you in a position of strength against your competitors.
Technology."Mobile operators make liberal use of this strategy. (Think 4G, HSPA, WAP)," says Graham McInnes on the ninth slide of this excellent presentation. While it can be tricky to communicate the value of more sophisticated technologies in laymen's terms, it can be a powerful differentiator in the right industries. Verbiage like "latest" and "innovative" helps people who might not grasp every nuance of why a technology is better that it is indeed an improvement.
Keep in mind that you won't be the new business on the block forever. Other competitors will enter your markets space with their own attempts to differentiate and position themselves against you. However you choose to differentiate, be prepared to evolve and adapt your differences, and you will have a thriving enterprise for years to come!
Chris Lenois is a small business owner and freelance journalist writing for Vistaprint Deals, the official coupon site of Vistaprint.com, offering discounts on custom marketing products to small business owners around the world. Chris has covered marketing and entrepreneurship topics for many newspapers and business publications, including Wired and The Times-Picayune.
