MARY KYRIAKIDI: TRUE DISTINCTIVENESS IS RARE. BUT WHEN A BRAND FINDS IT, IT REALLY PAYS OFF

The debate over whether there is any real differentiation between brands at all was reignited this year at Cannes Lions, where Byron Sharp stated that a decade of research had failed to identify any truly differentiated brands from the consumers’ perspective.

Brand differentiation can be measured. And it pays off.

Mary Kyriakidi, Global Thought Leadership Director at Kantar, responds to this claim with data from the BrandZ database. She shows that perceived differentiation has a concrete, measurable impact on how a brand performs. It is therefore not merely an abstract marketing concept.

What differentiation does for business

Perceived distinctiveness accounts for roughly half of the reason why a brand can command a higher price. Brand awareness alone contributes only about 6 per cent to this. Customers therefore do not reward brands simply for being familiar with them. Above all, they reward those brands that hold a clear and unique meaning for them.

Moreover, this ability to justify a higher price is not merely reflected in what the customer thinks. It has a direct impact on the company’s margins and overall profitability. Distinctiveness thus ceases to be merely a marketing metric and becomes a factor that influences business results.

Interestingly, this effect also works where we might not expect it. In financial services – a sector that people often perceive as almost interchangeable – brands with low perceived distinctiveness have only a 6 per cent chance of increasing in value. For distinctly different brands, this probability rises to 25 per cent – more than four times as high.

Why simply being visible isn’t enough

Marketing has long worked with the concept of salience – the ability to recall a brand at the moment of purchasing decision. This is undoubtedly important. If a customer cannot recall a brand, they have no chance of choosing it.

However, the data shows that recognisability and distinctiveness are not the same thing and do not serve the same purpose. Recognisability helps a brand make it onto the shortlist. Differentiation, on the other hand, determines whether the customer ultimately chooses that particular brand, and whether they are willing to pay more for it than for a comparable alternative.

Furthermore, differentiation need not be based solely on the product. A product advantage may be strong, but it is often relatively easy to imitate; sooner or later, competitors will catch up. Differentiation rooted in brand perception, customer experience, emotions, trust and long-term brand equity is more resilient. Competitors find it much harder to copy this form of differentiation, which is why it tends to be of greater economic value.

What this means for brands

The debate between advocates of salience and differentiation probably has no single definitive winning solution. However, data from BrandZ suggests that the most successful brands in the long term combine both. They are easily recognisable whilst also offering customers a clear, hard-to-copy reason to choose them.

A brand’s true strength, therefore, does not stem solely from the fact that people remember it. It stems from the fact that they perceive it as meaningfully different and valuable enough to be willing to pay a premium for it.

Read the full article by Mary Kyriakidi on Médiář.

Source: kantar.com