I. Differentiation vs. Branding
Yesterday, I returned from a trip to Seoul, Korea, where I was speaking at the Global Golf Marketing Conference, attended almost exclusively by Korean golf facility executives. The conference organizer requested that I speak on differentiation. It seems there is no Korean word for branding and I was asked not to use the word. Not only did I have to re-write my branding presentation, I had to re-think the terminology I use.
This got me thinking (maybe too much) about branding and differentiation. Are they really the same thing or different marketing disciplines? So I went to my bookshelf and pulled out my copy of 2001's Differentiate or Die by Jack Trout and Steve Rivkin (a recommended read). An argument could be made that the book could have been titled Brand or Die, although it doesn't quite have the same ring. Chapter 2, "Whatever Happened to the U.S.P.?" could be "Whatever happened to the brand promise?"
Questions: Is "Branding" just a marketing jargon word? Is there really a difference between differentiation and branding? Or am I catching a case of Marketers' Overthink?
II. The Ryanair Pricing Model
A couple of weeks ago I had a golf course owner tell me that he has substantially lowered prices on his green fees to compete in an overbuilt industry during a tough economy. He intends to make up the revenue by raising the prices of items not included in green fees. His reasoning? He says that people will call and ask "How much are your green fees?" but they never call and ask "How much is your beer?" He called it the "Ryanair pricing strategy."
Ryanair is the Ireland-based airline that is famous for it's low-price, no-frills flights. I've never flown Ryanair, but from what I hear, you get what you pay for and nothing more; a seat on an airplane. If you want more, you pay for it. Ryanair has used this pricing strategy to become the world's largest international passenger airline, and Europe's most profitable airline.
Questions: Is pricing really the most important factor right now in consumer decisions? Should we forget about branding or customer service? What's marketing's role in all this?
III. Presentations and the Customer Experience
During my trip to Korea I read Carmine Gallo's new book: The Presentation Secrets of Steve Jobs (a recommended read). Gallo dissects and analyzes Jobs most important presentations, then uses them as a platform to teach good presentation skills. The book is divided into three sections or "Acts": Create the Story, Deliver the Experience, Refine and Rehearse. I think this is also a good marketing formula for delivering a customer experience.
Create the unique story about your business, deliver a remarkable experience, then refine the experience and rehearse it with your employees until they deliver it flawlessly. If you are a marketer or small business owner, you are also a presenter. Every day you are making presentations to your customers. Business owners would be wise to read this book and develop a presentation on their customer experience.
Questions: What do you think about teaching employees presentation skills? Could you make a presentation about your customer experience that people would want to watch?
Feel free to discuss.
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5 comments:
You really got me thinking with your post, Jay. Thanks!
I personally believe that differentiation and branding are very different.
For small businesses, branding is certainly an important marketing initiative, but only if several important questions are answered first. Questions like:
* What is your company’s business goals or “end-game”?
* What is your point of differentiation and core message?
* Who is your Ideal Client?
* What is your current position in the marketplace?
I talk a lot about differentiation because I believe that a clear differentiation strategy is the foundation of real competitive advantage (and one way to avoid the need of implementing the Ryan Air Pricing Model). Prior to developing a branding strategy, small businesses must understand the ways in which they are uniquely valuable to their customers.
Branding is something you do after you’ve figured out what it is you’re trying to brand and should be fourth among five linked small business marketing pillars: strategy, differentiation, positioning, branding and marketing communications.
Branding is crucial to the success of small businesses, but I think we need to be careful not to let branding initiatives drive strategy. The reason most some small business branding efforts fail is because firms don’t first understand where branding fits along the continuum of other marketing initiatives.
Thanks for chiming in, Patrick. So do I understand you to say that branding is a subset of differentiation? The process you outline are steps I go through with my clients during the branding phase. To me, branding is differentiation.
Can you give me a practical example so that I can wrap my mind around how you think it's different?
(Also, please list your website or blog, Patrick)
Most people want value - and differentiation is all about unique, competitively defensible value.
As for Ryanair, if that's what they are about...I don't need to get anywhere that bad. I'll be happy to spend a little more and enjoy a little comfort.
I'm so glad we met at blogworld Jay. I really appreciate reading your posts. Personally, I think customer services is the most important thing. I am not too sure yet what I think about branding. And lower prices often lead to a "race to the bottom". I'd rather be able to offer people a really great product, that meets their needs, and maybe even some of their desires.
Listened to a podcast years ago, don't know which one, but I think it was from itconversations.com. The jist of this one fellow's argument is that people don't mind paying more for a great stereo system, a really enjoyable game, or an Apple computer.
I know the recession has hit haaard, but I think there is better mileage in creating value and charging a (perhaps small sometimes) premium
@pat & Arjun
I agree, I think it is about value...mostly. The price reduction game is a death spiral for a business. You can never raise your prices again, unless you significantly raise your value.
But supply and demand does enter into the picture. With unemployment rates at 10% in the U.S., and less cash in the economy, the pie is definitely smaller. Business owners have to decide how they want to handle it. Will they lower their price to make up for it, or will they ad value through differentiation?
@Arjun
Enjoyed getting to know you at BlogWorld, my friend. I agree with you. The recession is hard, but those that keep the faith and stick to value, will be the winners on the other side.
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