Differentiation – Does it really matters? Till some time I believed the same, however now I think slightly differently.
I think we need to think of this in light of following 2×2 Matrix. Category involvement and category development ( penetration) being two vectors.
Matrix 1 – Low Category Involvement and low category development.
Here what you are saying is absolutely true. Products and brands are really small part of consumer’s life and they do not want to spend their time thinking about decisions that they are making. Mostly purchase is out of habit and for a functionality that the product needs to deliver on. Your task as a category leader or challenger is still going to be to develop the category and here both a better off in focusing on highlighting the benefits of using the category. Thus differentiation does become less relevant here but how you are right choice to “do the job”
Here you are better off highlighting and owning category benefits here. Being efficient generalist might be the right strategy.
Matrix 2 – Low category involvement and High Category development.
Here you are still not an important part of consumer’s life (from the time I spend on thinking about what I buy) yet there are large numbers of category buyers who have their own unique needs and preferences. You need to offer them customized/right combination of benefit to stay relevant to them. This is what a lot of brand leaders have done in Shampoo or Toothpaste categories for example.
Here you are better off launching extensions which offer all category benefit and yet specializes in some. This might be the place where differentiation starts being relevant.
Matrix 3 – High category involvement and Low category development.
Here consumers do spend time on evaluating different options before buying. You need to give them a reason (functional or emotional) to choose your brand. You need to do the category job and that is the basic that consumers expect out of your brand however You need to tell the consumer why they should choose your brand over others. This is quite obvious in car as a category in developing nations. You have to offer drivability, economy, style, safety, convenience etc etc.As consumers do expect this in a car, however each brand defines what they really want to chosen for. There are brands now they only talk about safety as their clear focus or modern convenient features as their unique benefit. It goes without saying that these cars do offer other category generic benefits, however let that be a point for consumers to experience at showroom and reason why consumers finally choose them is the differentiation they create through their advertisement and experience.
Here you are thus better off here on focusing on being part of consumers consideration set in 1st place and winning in final decision basis all factors combine. Thus, differentiation plays an important role here too.
Matrix 4 – High category involvement and High category development.
Here consumers are spending time making their choices (just like previous one) however they are mostly likely making their 2nd or 3rd purchase and have experienced your brand and offering earlier. To stay relevant and leader in the category, you need to redefine the category expectations as consumers expect you to offer more and something new when they buy you again. For example, car brands in developed nations are now working beyond just what cars used to offer. They are working on hybrid technology or driverless driving etc etc.
Here as a leader you are better off by adding new benefits to category expectations and offering them through your brand. The new benefit is what defines your brand and thus your point of differentiation.
Thus what seems like is that differentiation does play a role but it depends on your category development and consumer involvement in buying your category.
Feel free to comment your views below.
P.S. These views are mine and are expressed in personal capacity and have nothing to do with my profession.