But most brands are failing. A 2006 study by Copernicus Greenfield showed that brands in 48 out of 51 product/service categories were perceived to be undifferentiated by consumers. And 80%+ of products still continue to fail, according to Ernst & Young, because of lack of differentiation.
Yet the benefits of differentiation as shown below (in terms of profit margins, operating earnings, market cap growth) are tremendous, as demonstrated by Y&R’s Brand Asset Valuator.
So why are most brands failing. Because differentiation actually requires you to think different and do different, starting with your strategy. Which requires original thinking – which is sorely lacking today. But there are some brands that are truly differentiated, and that transcend their categories.
These brands:
• are aligned – with the culture of the organization behind them (e.g. Nike, Southwest Airlines)
• are relevant and deliver on their promises – what people want and performing the way they want them to (e.g. Ikea, Nordstrom)
• are surprising – raising the bar relative to expectations (e.g. Virgin, Jones Soda, Cirque De Soleil)
• tap emotions – as product benefits have become table stakes (e.g. Harley-Davidson, Tiffany)
• execute brilliantly – through their actions and interactions (e.g. Ralph Lauren, Zappos)