Choosing a compelling point of difference

Brands differentiate in two fundamental ways

1. Leverage performance associations

2. Leverage image associations

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0-60mph in 3.2 seconds 18 pages per minute

1. Performance associations are used when features are easy to assess prior to purchase

2 miles for every $1

Coffee in <1 minute 2x more suction than rivals Lasts 13.7 years

2. Image associations are used when performance associations are more difficult to assess

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Michael Jordan - Gatorade Beyonce - Pepsi George Clooney - Nespresso

Jared Fogle - Subway Peyton Manning – Papa John’s Jennifer Anniston – Smart Water

2. The food and beverage category differentiates largely via image associations

2. The health and beauty category also differentiates largely via image associations

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Emma Stone - Revlon James Franco - Gucci Scarlett Johansson – D&G

Tina Fey - Garnier Diane Kruger - Chanel Charles Barkley – Weight Watchers

2. Luxury goods are another category that relies almost exclusively on image associations

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Uma Thurman – Louis Vuitton Gwyneth Paltrow – Tod’s Roger Federer - Rolex

Nacho Figueras – Ralph Lauren Lady Gaga - Versace Christiano Rinaldo – Emporio Armani

Compelling differentiators must meet three fundamental requirements

• Relevancy: Attribute must be an important decision driver

• Credibility: Brand consistently delivers this attribute

• Uniqueness: Brand delivers this attribute better than rivals

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Differentiation: A high hurdle

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Most brands fail to differentiate in a meaningful way

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Points of difference change over time

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Points of parity and difference in the computer industry of the 1980s and 1990s

Points of parity

• Quality

• Design

• Reliability

• Price

Dell Differentiators

• Customizability

• Value

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Points of parity and difference after competitors launched build-to-order web sites

Points of parity

• Quality

• Design

• Reliability

• Customizability

• Value

Dell Differentiators

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Points of parity and difference in the mail delivery industry of the late 1970s

Points of parity

• Reliability

• Customer service

• Package protection

• Price

FedEx Differentiator

• Overnight delivery

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Fedex points of parity and difference after competitors launched overnight delivery

Points of parity

• Overnight delivery

• Customer service

• Package protection

• Price

FedEx Differentiator

• Reliability

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Points of parity and difference shifted again after fax machines and email were introduced

Points of parity

• Reliability

• Overnight delivery

• Customer service

• Package protection

• Price

FedEx Differentiators

• Security/confidentiality

• Attention grabbing capability

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Summary

• Brands differentiate in two ways: They leverage performance associations when features are easy to assess prior to purchase and image associations when they are not

• Differentiators must meet three fundamental requirements: They must be relevant to decision making, credible to customers and unique to the brands that claim them

• Finally, points of difference change over time so brands must seek new sources of differentiation when previous differentiators become points of parity

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