Differentiate or die

By Yuswohady

JAKARTA (JP): The above title is the title of Jack Trout's latest book published last year.

Jack Trout, as you may still remember, is the guru of positioning who, with Al Ries in 1969, invented a marketing concept that is powerful today. It is called positioning.

I like the title because it accurately describes the competitiveness in today's turbulent and volatile business environment.

What Trout said was right. In the hypercompetitive environment, your brand cannot survive without differentiation. Differentiation determines the life or death of your brand.

In one of the national newspapers last week, I specifically discussed Tempo's recent brand extension strategy.

With this strategy, Tempo magazine wants to leverage its brand equity by entering a new product class -- newspaper -- with a new brand name, Koran Tempo.

I said in the article that Koran Tempo might use Tempo magazine's strong brand name, but it would be meaningless if it was not followed by efforts to differentiate itself from its strong competitors like Kompas or Bisnis Indonesia.

Koran Tempo should clearly position itself as, say, "the investigative newspaper" to differentiate itself from its competitors.

Our message here is simple -- even with a strong brand name, clear differentiation is still needed to survive.

This is clearly seen in companies that have been successful thanks to strong differentiation.

Wal Mart has become a strong market leader in the mass- merchandise business because of its strong differentiation through its "everyday low price" strategy.

Dell has consistently grown at five times the industry rate, thus becoming the darling of Wall Street.

Its stock was up more than 36,000 percent last decade due to its unique approach, in serving its customers, using what we call "direct model," in its differentiation.

In Indonesia, BCA for example, has been able to differentiate itself with one key word "convenience" through its ATMs, debit card and recent KlikBCA services (Internet version of an ATM service).

If differentiation determines a company's life or death, how can companies establish strong differentiation.

To answer this, Jack Trout proposed four generic steps that can act as a guideline.

First, your differentiation has to make sense in the context of your product category.

It has to start with what the marketplace has already heard and noted from your advertisements.

Nordstorm's "better services" differentiation for example, played perfectly into the context of a department store sector that was reducing its employees and services to cut cost.

Lotus launched the first successful network of "groupware software" called Notes just as corporate America was networking its PCs.

Second, find a way to differentiate yourself.

"To be different is to be not the same, to be unique is to be one of its kind," said Jack Trout. "So, you're looking for something that separates you from your competitors."

Toy "R" Us, Staples and Blockbuster's differentiation strategies rest on their unique formula, "A narrow focus with in- depth stock."

FedEx separated itself from its competitors by creating a new service -- overnight delivery.

Aqua differentiated itself by branding their commodity product, and like Fedex, then created and owned the new category.

Volkswagen differentiates itself from its American competitors by positioning itself as a "small car that is economical, reliable and ugly."

Third, you must have credentials to support your differentiating idea, to make it real and believable.

Volvo's capability in building a safe car was its key credential for labeling the vehicle "the world's safest car."

As for IBM, size was the key credential in setting up its "integrated computing."

If you have a product difference, you should be able to demonstrate that difference.

The demonstration becomes your credentials. Claims of difference without proof is just claims.

If British Airways claims it is the "world's favorite airline", it should fly more people than any other airline.

The same applies if Coca Cola claims it is the "real thing", then it has to have invented colas.

And finally, you have to communicate your difference to your customers.

Having a good differentiating idea is not enough. You have to have the resources to build a communication program that proclaims your difference to your customers.

You need your difference entrenched in the minds of your customers.

This is critical. Every aspect of your communications should reflect your difference. You are your advertisement. Your publicity program. Your brochures. Your website. Your sales presentations.

The four steps above are not enough. Although you have made sense of the context, got a good differentiating idea, established credentials and conducted an excellence communications program, you still need to be consistent with your differentiation.

Consistency is at the heart of every differentiation building program.

Dell has been consistent with its differentiating idea, "Go direct to users with a lower price proposition."

Southwest has been consistent by positioning itself as the "low-fare airline."

And Marlboro has been consistent with its "Marlboro country" and "cowboy lifestyle."

Be different. And win the competition!

The writer is an associate consultant at MarkPlus&Co.