From OFF Brand, Koto’s Newsletter

https://offbrandkoto.substack.com/p/brand-differentiation-stand-out-or?subscribe_prompt=free

“At Koto we prefer a less prescriptive, yet more practical definition: that a brand’s point of differentiation should answer three relative questions. Does it build on a truth at the heart of a business? Is it distinctive within the category? Will it feel compelling to the audience?”

Starting Point 1: Product

Some questions to consider:

• Is your product a market-leader? (Think ‘No one got fired for buying IBM’ )
• Does your product interface with the other products your consumers own or use? (Think Slack)
• Is your product more powerful or does it perform to a high standard? (Think Porsche)
• Is there an ownable technology that powers your product? (Think Dyson)
• Does your product meet rigorous technical standards or is it reliable? (Think Volvo)
• Is your product made in a significant geographic location? (Think Swatch)

Starting point 02: Experience

Some questions to consider:

• Is there an ownable aspect of your user experience or interface? (Think Tinder’s swipe mechanic)
• Do you serve a particular need or desire, above all else? (Think Amazon Prime’s commitment to convenience)
• Is your after-care support better than anyone in your category? (Think Applecare)
• Do you have an outstanding warranty or customer promise? (Think Rimowa)
• Can users customize or tailor your product to be their own?(Think Tylko)
• Do you have a loyalty or rewards scheme that adds value to your offer? (Think Amex)

Starting point 03: Price

Some questions to consider:

• Is everything about your business laser-focussed on budget and bottom-line? (Think Hans Brinker)
• Do you have a pricing strategy that strips back all the added extras? (Think Ryanair)
• Do you have a commitment to price matching? (Think John Lewis’ ‘Never knowingly undersold’)
• Is your price iconic or fixed? (Think Poundland or Dollar Tree)
• Do you offer economies of scale when customers purchase in bulk? (Think Costco)
• Does your business model or infrastructure challenge a price monopoly? (Think Warby Parker)

Starting point 04: Channel

• Does your brand turn up in convenient places, where people need it most? (Think McDonald’s)
• Or is your brand in a location where people visit with specific intention? (Think Ikea)
• Does your brand turn up in exclusive, or culturally relevant places? (Think LVMH)
• Is your brand an intermediary or marketplace? (Think eBay)
• Does your business model side-step conventional distribution? (Think Dollar Shave Club)
• Does your business currently or does it have capacity to sponsor cultural events? (Think T Mobile)

Starting point 05: Purpose

• Is your business known for its social or environmental commitments? (Think Patagonia)
• Does your product or service cause less harm than your competitors? (Think The Body Shop)
• Does your brand stand against the malpractices of the category? (Think Tony’s Chocolonely)
• Does your brand stand in support of a defined group? (Think Dove)
• Does your business set out to improve or replace a fundamental aspect of society? (Think Coinbase)
• Will your business change perceptions or habits of your consumer group? (Think Backmarket)

Brand Ladder: a model to uncover the emotional value of your business

As with all models, this is just one of many tools that can spark ideas. But what the brand ladder is particularly good at is bringing about a shift in perspective – from focussing on what the business offers, to how that offering resonates emotionally with customers.

The enduring power of simple ideas

At Koto, we use a litmus test to ensure an idea’s simplicity endures: “Could a 10-year-old understand this idea?” If the answer is ‘yes’, then we are on the right track.

Differentiating Brands (Types)

1. Reverse Brands: to be an oxymoron and an agreeable one at that. E.g. Apple (simple, human, creative)
2. Hostile Brands: strategy feels counterintuitive, errect barriers to consumption, by standing firm and refusing to conceded, these brands also feel more authentic, achieving cult-like status, e.g. Apple
3. Breakaway Brands: intentionally place themselves outside of their category, e.g. Liquid Death

Differentiation is rarely about being as different as possible.