Meaningful differentiation: what it is and why your business needs it - IMD Business School
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Meaningful differentiation: what it is and why your business needs it

To stay relevant and keep customers engaged, businesses need to establish a clear, meaningful identity and innovate proactively, said IMD Professor Dominique Turpin at OWP in Dubai.
November 2019

The topic of branding isn’t new, but in an ever-competitive landscape where innovation is getting harder and harder to sustain, how can companies set themselves apart from their rivals?

To really stand apart, said Dominique Turpin, IMD’s Dentsu Chaired Professor of Marketing and Dean of External Relations, companies need to focus on two keywords: ‘meaningful differentiation’.

This, explains Turpin in his session at OWP in Dubai, is a “strategic process to create your company’s story”.

Success stories

Pricing is no longer the only thing that matters to customers, Turpin said. A consumer will buy a Nike t-shirt for $100 that has come from the same factory as a t-shirt made for $5 – because they have an emotional connection with the logo.

This shows how businesses and investors are increasingly recognising brands as the company’s most valuable asset.

Take the success story of Havaianas, for example. “They are, at the end of the day, just rubber flip-flops”, Turpin said.

But the Brazilian brand moved into the fashion market and became a premium product. How did it do it?

Through meaningful differentiation, said Turpin.

The company knew, for consumers to see Havaianas as a premium product, traditional marketing communication and advertising wouldn’t be enough.

In response to this, they created emotional an emotional connection with their audience by communicating the backstory of the sandal, which was a basic shoe for poor plantation workers in Brazil.

The company hired leading designers to create attractive, colourful designs and, critically, included the consumer during every step of the design process. Soon international celebrities were wearing the new designs, and this allowed Havaianas to use an “A” class acceptance as an endorsement.

The company also used innovative marketing strategies such as placing a giant model shoe in Sydney and using graffiti artists to market the flip-flop on the side of buildings in New York.

This marketing message suggests innovation and aspiration, said Turpin. It also built on Brazil’s positive image overseas by portraying Havaianas as a colourful, joyful, simple product.

“And they stayed relevant,” said Turpin, “with new annual collections and now more than 300 different styles and colours are on the market.”

“Soon consumers started seeing Havaianas as a premium product. Sales increased and net profit boomed. Now, about 200 million of the flip-flops are sold every year.”

Principles of meaningful differentiation

What can companies learn from this?

“Every business needs to establish a clear and meaningful differentiation identity and ask themselves, ‘what is our brand character, what are our brand values, and what is our brand purpose?”, said Turpin.

Tech giant Apple, for example, has a brand identity that is “artistic and liberated”, he added. “Their brand values are non-conformist and fun. Their brand purpose is great design and being easy-to-use.”

Critically, companies also need to be customer-centric and listen to their consumers – then communicate with them with clear and consistent messaging.

They also need to innovate proactively and broadly, said Turpin.

“Positioning is all about finding and then focusing on that idea that differentiates your brand from the competition in a meaningful way – this is the foundation for building a stronger, more valuable and sustainable brand,” he said.