Skip to content
Show
What Is A Broad Differentiation Strategy (5 Best Examples)What Is A Broad Differentiation Strategy (5 Best Examples)Pulling a customer base that continually sends revenue through the roof is not an easy feat, especially in highly competitive markets. Companies grossing billions of US dollars in revenue use some kind of strategic positioning and differentiation to make their products or services appeal to a broad spectrum of audiences. A common strategy applied by companies seeking to attract a large customer base is the broad differentiation strategy. We’ll consider this strategy in detail, and also show how companies are utilizing it to achieve a competitive edge. Find Your Differentiation Strategy (26 Brand Positioning Examples & Ideas)One-click subscribe for video updates
What Is Broad Differentiation Strategy?A broad differentiation strategy is a strategy used by companies to appeal to a vast range of customers.
Companies that are successful with this strategy achieve it by being unique enough to have an edge on their competitors but broad enough to appeal to a market of millions or more. Creating a broad differentiation strategy involves understanding the needs of a large segment of customers, studying the competition, and using your brand’s uniqueness to increase value to customers. Other Types of Differentiation StrategiesGenerally, a differentiation strategy helps companies provide unique products or services to their customers in a way that helps set the brand apart to gain a competitive advantage with a smaller specific group of consumers or with a broader market. Differentiation strategies can be traced to Porter’s generic strategies for achieving competitive advantage in a market segment. The four main types as presented by Michael Porter include broad or narrow scopes namely
These are explained further below:
Broad strategies generally target “the masses” while focused strategies are directed towards a niche market, sometimes a tiny fraction of a bigger market. PRO Brand Strategy BluePrintBuild Brands Like A Pro Brand Strategist
PRO Brand Strategy BluePrint
How To Create A Broad Differentiation Strategy#1. Determine The DifferentiatorAs a brand or business, one of the things you should know like the back of your hand is what sets you apart from other brands. You shouldn’t be in a market without bringing a unique value.
This will require evaluating your business’ purpose and mission as well as your driving goals and objectives.
Review your areas of expertise, analyze your brand’s core strengths and weaknesses and those of the products or services you offer. #2. Research Your Target AudienceYou can’t achieve a competitive edge even when you chose to be different without applying those differences to meet specific customer needs.
To gather the information you need, send out surveys to your recent customers and ask them questions that will give you an accurate idea of their preferences in terms of product or service features they are looking for. #3. Develop DifferentiatorsNext thing is to develop differentiators that can’t be easily copied by your competitors. Such will be special product characteristics that are entirely unique in value to the consumers.
#4. Write Your Value Statement
Use the most essential characteristics you have identified to develop a positioning statementthat will specifically highlight the problems your product solves for the customer, the value it provides, the benefits to the customer, and while they should choose you over your competitors. #5. Tell The StoryStorytelling is one of the most important tools in marketing. By creating a compelling story around your brand’s uniqueness, you can build customer loyalty.
Craft an overall story that sets you apart from the competition and draws your target audience to your brand. #6. Implement Your StrategyBegin to implement your plan and monitor your results.
Set up some key performance indicators and metrics to measure the outcomes you’re getting and determine success. As you get results, you can continue to review, adjust, and iterate your strategy accordingly. Utilize different channels such as your company’s website and social media platforms. In presenting your products or services on your website, wrap some storytelling around it.
On social media, create ongoing short posts and other forms of content to continually engage with customers. You can also organize specialized events, workshops and webinars to reach your audience with storytelling. 5 Remarkable Broad Differentiation Strategy ExamplesThere are several companies out there implementing a broad differentiation strategy, however, the ones below look remarkable to share. #1. Costco
Costco, an American multinational corporation operates membership-based big box retail stores. With 65 million members, it’s the world’s largest retailer of specific products such as organic food, rotisserie chicken, and prime beef. It’s the second-largest food retailer after Walmart and the fifth largest world retailer.
With an annual fee as low as $60, members can purchase products in Costco warehouses worldwide as well as their other business centres such as the travel services, website, and gas stations. Costco also provides a food court (a seating area) in most of their locations. They offer low-priced menus in the food courts to attract customers and encourage them to stay within the store when they visit. #2. Zalando
Such is the story of Zalando, an e-commerce company based in Germany and Europe’s biggest online retailer of clothing and accessories. Zalando beats thousands of its competitors in the industry by providing superb delivery and returns services. Unlike other retailers that only accept returns within a shorter period, Zalando offers a 100 days free return policy.
In recent times, the company has also developed its design standards and invested in new recycling technologies while also transitioning towards a platform business model. At the end of the third quarter of 2021, Zalando has grown its customer base to 46.3 million with an average of 5.1 orders per customer. #3. Nintendo WiiWith over 101 million total lifetime sales, the Wii is a leader in the next-gen video games consoles industry. It’s ahead of other top next-gen systems like Microsoft Xbox 360 and Sony PS3.
Rather than focusing on beating Microsoft Xbox’s and Sony PS3’s computational graphics and power, Wii uses novel gameplay to target a broader demographic of players. This makes it a video game of choice for families with kids. As of 2021, Wii is the sixth best-selling home console of all time according to Statista. #4. Whole FoodsWhole Foods positions itself as the best source for healthiest, natural, and organic foods. It targets individuals and families that are earning above the national average income, manage a healthy lifestyle, and are conscious of their environment.
In 2017, 58.9% of polled US consumers have shopped at Whole Foods, and 20% of Americans aged 18 – 29 said they bought most of their groceries at Whole Foods Market in 2018. In 2020, Whole Foods posted an annual net income of $21.33 billion. What sets Whole Foods apart from its competitors like Fresh Market and Trader Joe’s is not only about the quality of their groceries but their storytelling ability as well.
By mixing traditional marketing with inbound marketing, they show consumers the “why” of their products in terms of health benefits and wholesomeness.
#5. AppleCompanies like Apple focus on building products of higher value and prestige for the masses.
These are made available to a broad market segment at premium prices. Benefits of Broad Differentiation StrategyHere’s how implementing a broad different strategy can help turn things around for your company. Want Actionable Brand Strategy Tips & Techniques?
Reduction in Price CompetitionWithout the broad strategy, your company will only be left to compete in terms of price when a competitor’s products are cheaper than yours. This may lead to reduced profit margins and losses.
If a consumer can have the feeling that your product or offering resonates with their needs more, they won’t mind paying more to get yours. Creation of Unique ProductsThe product differentiation strategy can push your company further to build products based on authenticity and uniqueness and use that as the main selling point to customers.
Better Profit MarginsWhen you focus on offering differentiated products and services, you can relax a bit on the price war and focus more on creating the value that can earn you higher profit margins on sales. Increased Brand LoyaltyIf you maintain a perceived quality for your products over a long time, you will soon have a reputation with customers, and that increases brand loyalty. Reduced Competition
It’s not that there won’t be companies offering similar products but none can offer customers the same unique features and value that your product offers. Clarity In MarketingOne of the brainers in marketing is creating the right messaging to convince consumers to prefer your products.
Over To YouThe broad differentiation strategy is what you need if you want to be distinct enough to achieve a competitive edge in your market and broad enough to attract millions of customers and more. It’s a required addition to your bucket list of strategic management techniques that you can use for specific products in your line or for your entire brand. When effectively deployed, the strategy can pretty much turn things around for your company or brand. On-Demand Digital Program Brand Master SecretsMake the transition from hired-gun to highly valued brand strategist in less than 30 days. The systems, frameworks and tools inside this comprehensive program are all you need to level up. Stephen Houraghan2022-08-01T20:22:20+10:00 Related Posts
What are the two ways a company can translate its low cost advantage over rivals?What are the two ways a company can translate its low-cost advantage over rivals into attractive profit performance? Eliminating or curbing nonessential activities and doing a better job than its rivals in performing essential activities.
What are two characteristics of a broad differentiation strategy?2. a broad differentiation strategy: seeking to differentiate the company's product or service from that of rivals in ways that will appeal to a broad spectrum of buyers.. the provide a path to competitive advantage.. they lay out the means for pleasing customers.. they establish a formula for improving performance.. What do you mean by focus strategy?A focus strategy is a method of developing, marketing and selling products to a niche market, which could be a type of consumer, product line or geographical area. A focus strategy would center on the expansion of marketing tactics for your company while aiming to establish a new relationship with your target audience.
Which of the following is a difference between a standardization and segmentation strategy quizlet?A standardization strategy may lose sales from customers who desire more functions and features and are prepared to pay more for them while a segmentation strategy meets the needs of different groups of consumers and thus sells more in total.
|