Trying to market in the middle of today’s crowded digital field is a little like knocking on the customer’s door and finding 50 other salespeople on the porch with you — all selling a similar product at a lower price.

This isn’t a new phenomenon. It’s been growing for more than a decade.  The growth of search engine content and popularity gave rise to Search Engine Optimization (SEO) techniques and services, and services like Google AdWords — launched in 2000 — allows vendors willing to put down the cash to "bid" for ad placement at the top of hit lists.

While these techniques have worked, the continued growth of content has made them less effective and more expensive. In AdWords you bid against other vendors who want the same position — which leads to a more product focused, vendor controlled approach where content is more likely to be seen and acted upon by prospective buyers. 

This approach has several names, the most descriptive being “Product (or Brand) Differentiation” — the process of creating content that encourages potential customers to think of your company and products instead of your competitors when deciding what to buy.

Just What Are You Selling?

Product differentiation offers a number of strategies and tactics to create the kind of content designed to produce interest leading to new and repeat sales. But like so many of today’s marketing strategies, most focus on what the vendor can do to differentiate its products and services, with less attention to what the consumers are likely to do.

In a market that can easily span large parts of society, addressed rapidly through a range of digital media, it’s increasingly important to know who your target consumers are, what they are most likely to respond to in product messages and why they do it. It wouldn’t be a stretch to say that product differentiation is all in the perception of the prospect or customer, and differentiation strategies, whatever their approach, succeed or fail based on how well they understand and mold that perception.

But first you need a clear picture of what you, the vendor, is actually selling. While the final transactions are for actual product or service, consumer’s paths to get there are usually more complex and nuanced.  For example, Mercedes Benz automobiles are fine products, but marketers, especially in the US market, know that the typical Mercedes buyer could probably get nearly as good a vehicle without spending the kind of cash a Benz requires.  In truth, many (if not most) Mercedes buyers are buying status with that large check, hence the Mercedes differentiation strategy focused heavily on how elegant the product is, but less on reliability and seldom on economy.

Perception of wealth, social position, sophistication, demographic inclusion, quality/convenience, economy, expertise: all are potential contributors to why consumers select and buy products and services, albeit not always aware they are doing it.  

Every sale involves at least three elements:

  • The product or service itself and the use to which it is put: some products are staples that must be part of every home or business, while others are logical choices or impulses
  • The logical reasons why someone should or should not buy it: cost, reliability, functionality, cost, etc.  Some products are sold clearly on their tangible characteristics, hence differentiation strategies based on those variables
  • The unexpressed reasons why the product is or is not attractive to a particular buyer: who are you if you buy this instead of another product? No matter what the product is, how does buying, using and having others know it make you feel about yourself? Some products rely heavily on these subliminal factors, a few exclusively so

Much is being written about the first two — and they are important parts of many transactions — but the third, often the component that actually determines which product or service ends up being selected and purchased, receives a smaller share of consideration. This despite the fact that consumers usually have multiple product choices any of which would be acceptable, leaving the less tangible elements to make one product or service more attractive than its competitors, thereby swaying the choice.

And What Are They Buying?

Sigmund Freud said that our choices in life are “over-determined,” meaning that we usually do things for more complex reasons than we are aware of. While Freud couldn’t have been thinking of product choice in 1895 when he first used the term, over-determined factors are often important parts of why people choose a product or brand. And while they are usually unconscious to the buyer, these over-determined preferences are discernible by marketers who can appeal to them in brand identification, packaging and presentation.

While the details associated with this concept end up tightly bound to the product itself, there are a few basics that can help build the foundation for effective differentiation:

  • Does the product have a natural market? High end machine tools — Makita, Milwaukee and DeWalt come to mind — have a natural connection to the building and serious DIY worlds. All expensive enough that weekenders aren’t likely to choose them, and used in critical operations that make their reliability and longevity important to a prospective buyer, hence buyers’ willingness to search for and use product specifications and technical reviews as buying guides
  • Is the product a staple that buyers must or will buy often? Laundry detergent falls into that category and sellers’ task is not to convince buyers to buy the product but to buy their brand of the product. Any review of detergent marketing makes clear that sales strategies aren’t based solely on claims that the product works well
  • If neither, is the product an upgrade or a whim? Duluth Trading sells shirts, underwear and pants of various kinds, all staples of most working wardrobes.  Duluth positions its products as major upgrades with significant advantages over other brands and types of outdoor and work clothing. And because its products target the work and outdoor marketplace, Duluth also designs its ads with appropriate language and visuals — Buck Naked Underwear, for example — appealing to the motivations of what the firm considers its core market. Conversely, Pandora Jewelry, high-end and comparatively costly, must be considered a whim, purchased when the buyer wants to give a high-end gift or indulge herself. Accordingly, Pandora ads and web pages make no price comparisons against competing jewelry — and there are many copies at much lower prices — focusing instead on how well the wearer, giver, receiver will feel wearing or receiving this unique jewelry

Identifying these market characteristics can be complex and difficult, but knowing what you are selling and what your target audience will respond to is a critical prerequisite to an effective product differentiation strategy.

Seeing the Light

Vendors are beginning to understand and investigate the unexpressed reasons for purchase decisions.  Market surveys, for example, especially those conducted online, are becoming more searching, longer and increasingly tuned to uncovering factors beyond simple brand preferences in buying decisions. As that trend continues, we can expect better and better strategies to differentiate products and their vendors and, as some do better than others, changing populations of products at the top of their markets.

Sun Tzu’s famous quotation about war could be applied to product differentiation… with a few changes:

"Know your customers and know what they like about you, and you needn’t fear even in a crowded market.” 

If you can take that advice to heart, you can find and attract a customer base that will not only buy your products but will feel good about themselves having done it.

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