Wholesome Marketing Ideas, Bite Size

Wholesome marketing ideas, bite size

Sunday, September 9, 2012

Differentiation vs. centrality

It was interesting, as always, to watch the spectacle of the Republican and Democratic conventions over the last two weeks.

Both parties were straining to capture the middle ground. Both parties paid the requisite allegiance to “these United States” and to the glorious merits of “hard work,” of course. But in addition, the democrats nudged to the right by including God in the platform and recognizing Jerusalem as the capital of Israel. The Republicans nudged to the left by placing emphasis on job creation (through lower taxes for business, of course), and cozied up to women voters.

But the parties also attempted to differentiate themselves: the Republicans stressing the value of enterprise and individual initiative; the democrats stressing the “we’re in this together” message. The usual differences on gay marriage and abortion also persisted and were vocalized.

Despite the differentiation, and despite the fiery, intense rhetoric on both sides, on most issues, the two parties are more similar than they are different. They have to be. They're both trying to appeal to the middle of the electorate. 

Classical marketing suggests differentiation is key: find a point of difference, or a unique selling proposition, and differentiate your brand on that basis in the customers’ mind. In an orange juice category dominated by frozen products or those made from concentrate, Tropicana differentiates itself by being “not from concentrate.”

But the thing is, over time, the not from concentrate claim comes to be emulated by competitors, the category becomes crowded, and customers switch in droves from concentrate-based orange juices to “not from concentrate.” Tropicana finds itself at the core of a large category of “non from concentrate” orange juices in which it is dominant player.

Now, at this point, is the recommendation to the marketer of the Tropicana brand still to differentiate, or is it to find ways to reap the benefits of being at the center of the category? What about other brands in the category, what should they do? Should they aim to differentiate or to challenge Tropicana for the center of the category?

On the one hand brand research demonstrates that the extent to which a brand is central or typical of a category bears a relation to how easily it is recalled and how easily it is included in the consumers’ consideration set. A typical brand is one that is located at the centrer of a category, lies at the "central tendency" of the category, shares features with other members of the category, and is used as a reference point for other brands in the category. Research also shows that a typical or central brand in a category also tends to be preferred over other brands by most consumers.

If such advantages accrue to brands that are considered central to their product category, then why do brand managers go to great lengths to differentiate their brands from other and to make them distinctive?  Because, from a marketing standpoint, a differentiated brand faces less direct competition with other brands. Differentiation can also justify a premium because competitor brands are not perceived as direct substitutes. Differentiation allows a brand to be targeted at specific customers or usage occasions. Finally, a differentiated brand may be perceptually more salient on the shelf and be more likely to be considered in an in-store situation.

In political terms, demonstrating centrality (stressing common features -- at least, those in common with the republic and the flag) allows both parties to pitch to the large middle, while differentiation aims to give voters, both at the center and at the fringes, a reason to vote.

Brand managers could learn a thing or two from watching the political parties’ balancing acts between centrality and differentiation at the conventions.

1 comment:

Chris Lau said...

Part of the idea of being central, but at the same time driving a wedge between the other party (which is also trying to be central), can be important in politics because the battlegrounds are the swing voters. So you have to come off as the more appealing alternative (differentiation), but at the same time you need to be familiar (centrality). For some brands, absolutely owning a niche might get to you the above average returns, so I think centrality can dilute these kinds of brands/businesses. But for other brands, especially massive brands in which the costs of swaying loyal customers are very high, the short term battleground is only the "swing" consumers, which is analogous to politics?