Comments on The Marketing Spot Blog - Turning Entrepreneurs Into Marketers: Conversation Starters: Differentiation, Pricing, a...

@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.

I'm so glad we met at blogworld Jay. I really ...

2009-11-08T23:14:58.677-06:00

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

Most people want value - and differentiation is al...

2009-11-07T16:11:51.147-06:00

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.

Thanks for chiming in, Patrick. So do I understand...

2009-11-07T15:02:54.435-06:00

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)

You really got me thinking with your post, Jay. Th...

2009-11-07T12:04:11.147-06:00

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.