Differentiation is taken for granted by people who run companies, especially visionary founders. Yet, differentiation has to be clear, simple, and well-defined for everybody else. Articulate's Glenn Harrington cites Coke and Pepsi.
prosper in peace
Direct competition is an unnecessarily difficult way to do business. The level of difficulty relates to the maturity of the market and the innovative capacity of the competitors. Yet, all markets mature and it’s better to prosper in peace than to fight and starve.
fill a niche
To enjoy a more comfortable place in a competitive market, it is wise to identify and satisfy an under-served niche through differentiation from competitors. This way, you strive not to dominate the game but to dominate one particular aspect of the game – your own.
cheap like Cott
Even if your product was a knock-off of Coke or Pepsi, you could claim market share by selling it at a lower price. This way, you could attract the most price-conscious segment of the market through price-based positioning and avoid the Coke-Pepsi fight. This is how Cott has prospered in the cola market.
different like Jones
An alternative way to create a niche through differentiation is to create a strong brand image that attracts people to your product – even if the product is essentially the same as everybody else’s. The Jones Soda Company does this. Its clear-glass bottles labelled with black-and white photos and overtly modest writing are a hit with the market segment that likes quirky originality.
position for profit
The principles of avoiding direct competition extend well beyond the convenient examples of niche marketing in the soft drink business. Every enterprise has its competitors, but intelligent market positioning can make an enormous difference in how fun and how profitable life can be. At Harrington Newsletter, we enjoy helping businesses achieve profitable positioning and have helped to create effective brands. Contact us with your thoughts.
- Glenn Harrington, Articulate Consultants Inc.
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