To thrive in competitive environments, businesses must devise an effective brand differentiation strategy that reflects their brand positioning statement. By differentiating themselves from the competition, brands can create brand advocates, establish credibility, and ultimately increase customer loyalty and market share.
However, in a globalizing world economy, brand positioning has become more challenging, especially for private labels that have attracted much attention from emerging markets, spawning their own internationally competitive companies. A brand differentiation strategy helps businesses gain an edge in such situations by differentiating their products and services from competing brands and ensuring it resonates with their customer’s needs. Hence, it’s evident that brand differentiation can help brands sustain a competitive edge.
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What is a Brand Differentiation Strategy?
A brand differentiation strategy is a detailed roadmap that businesses can rely on to differentiate their products or services and make them unique and distinct in the marketplace. The outcome of an effective brand differentiation strategy is a well-thought-out plan to enhance product effectiveness and brand reach.
About the Client
The client is a multinational e-commerce chain based out of Canada. The e-commerce retailer recently unveiled its new private-label topical antiseptic products to cater to customers’ growing needs across geographies. With private label products emerging as significant sales drivers for retailers primarily due to the pandemic, the client plans to expand its product line across various categories by the end of 2021.
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The Business Challenge
Though several e-commerce retailers are introducing private-label products, only a handful have thought through private labels’ role in driving actual business value. For example, few private labels have come into being simply because vendors can mass-produce products at a lower cost and higher margin than an existing brand. In some instances, we also witness retailers being more deliberate in launching private labels by setting targets and penetration rates, adjusting those targets as needed, and even making changes in their organizational structures.
Retailers that seize new opportunities and redefine their brand differentiation strategies can turn customers into brand advocates and establish a strong brand presence. In this case, the e-commerce player’s new private label products witnessed a huge market success in the pre-COVID-19 phase, but the demand soon died down with other new competitors entering the topical antiseptics products market. Facing tough competition and realizing the need to differentiate its products, the client approached Infiniti Research seeking help devising a brand differentiation strategy backed by in-depth market insights and best-in-class research methodologies.
To help the client devise a brand differentiation strategy, we conducted in-depth research and market gap assessment to better understand the market in which they operate, the competing products, and the overall market demand for topical antiseptic products.
Using Market Segmentation and Competitive Insights to Drive Brand Value
Our experts conducted in-depth market segmentation with a core focus on five areas: brand strategy development, price benchmarking, product packaging, product design, and business operating model, and developed an action plan for each segment.
Using the data obtained, customer personas were created to understand the needs of consumers. Advanced research methodologies also enabled the client the find answers to several questions, including the following-
- What are the needs of the brand’s target customer segments?
- What is the brand’s unique value proposition, and what distinct consumer need does it meet?
- How are we monitoring compliance across categories concerning price positioning, quality, innovation, and other critical dimensions?
Creating a Brand Differentiation Strategy with Market Research Insights
Successful creation of a brand differentiation strategy depends on various aspects, including the need to offer unique features and communicating the value of these features to the right group of target customers. Hence, in the second phase, the focus was on creating a brand differentiation strategy using insights obtained in the initial phase to help the client bridge the gap between the demand in the marketplace and product features.
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The devised brand differentiation strategy enabled the client to differentiate their brand from their competitors through unique value additions. The solutions offered also enabled the client to-
- Establish new market segments
- Bridge the gap between the market demand and product features
- Create added value for customers through unique offerings
- Increase customer loyalty and product demand by 3x
- Boost margins and market share by 25%
Hence, it can be said that the brand differentiation strategy helped the client to gain a competitive advantage and drive profits by enabling them to identify and fill capability gaps quickly.
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