The following excerpt is from Chapter 8 of Profitable Marketing Communications: A Guide to Marketing Return on Investment by Antony Young and Lucy Aitken. “The book introduces investment disciplines and strategies to marketing practices and gives insight into how marketers have delivered outstanding marketing return on investment. Finally, it provides a blueprint to maximize the returns from marketing communications” (Kogan Page ).
 

Chapter 8: Differentiate any way you can 

“If marketing and sales departments aren’t helping to deliver a premium, what are they doing?”

Woody Harford, BA’s Senior Vice President Commercial, North America

Investors frequently make the same mistakes as marketers in terms of following the herd: they rush to buy stock in companies that are the flavour of the moment rather than analysing whether their purchase is a good long-term investment.

If a company has taken the trouble to differentiate, however, it’s a good bet for an investor because it will be more attractive to customers. Differentiation offers the additional advantage of helping marketing communications to stand out, making the marketing investor’s job much more straightforward.

One of the most famous examples of a company that zigged when others zagged is Apple. In 1984, when Apple launched its ‘Think Different’ slogan with its legendary Super Bowl spot, it sold a corporate vision that was anti-establishment. From that point onwards, Apple Macs were for the cool crowd and PCs were for nerds.

In 1998, Apple launched the iMac, a more acceptable item of furniture to have in the front room than a boring beige box. The slogan? ‘I think, therefore iMac.’ Three years later, the iPod arrived and was trumpeted by a multicoloured integrated campaign that achieved instant stand-out.

Of course, the success of all three Mac products has had as much to do with their aesthetically pleasing design as with the advertising that wraps them up and presents them to consumers; there were other MP3 players on the market before the iPod, and lots of choice in the PC market before the Mac. But by following its own advice to ‘Think Different’ right from the start, Apple has marked out its territory. It’s different to the competition in design, packaging and marketing. Apple has seeped into the national
consciousness so much that, like Hoover before it, the iPod has become the generic term for an MP3 player. Thinking differently has paid off for Apple: its shares nearly quadrupled in value in 2004 when iPods started to fly off the shelves.

‘Think Different’ should be the slogan of all marketers who want their marketing communications to deliver a return. There is no point in being identical to the competition and saying the same thing – only perhaps a bit louder and across more platforms. As Jason Frost, Managing Director of Publicis Blueprint, points out: ‘Any successful brand has found a way of differentiating, whether it’s through accident or design.’

And each and every sector has its own cliché when it comes to marketing. For cars, it’s a series of body shots interspersed with scenic views; hence the praise that was heaped upon Honda’s ‘Cog’. The ad, by Wieden+Kennedy in 2003, showed how a Honda Accord was constructed by filming a complex chain reaction involving 85 individual vehicle parts. Subsequent W+K ads maintained the Honda hallmark of being somehow different to other car brands, with ‘Grrr’ using animation to promote Honda’s cleaner
diesel engine, and ‘Choir’, a spot for its Civic model, which featured a 60-strong choir imitating the sounds by the car. The ads buck the trend in the car sector because they don’t just show the product.

For beers, humour is de rigueur, so Stella Artois, with its arty, cinematic communications, is memorable. For banks, an erstwhile seriousness dominates, giving Halifax in the UK (see Chapter 12) instant appeal when it took a more light-hearted approach.

Differentiation can come from product benefits or clever communication. When Unilever’s Elida Gibbs division launched its mild shampoo brand, Timotei, in the early 1980s, there was little about the product that was radically different to what was already available. Yet because women were showering daily and starting to wash their hair more frequently, the shampoo identified and occupied a new gap in the market for a mild shampoo that was ideal for frequent hair-washing. Sales soared. As Pamela Robertson (1998)
points out, ‘The real brilliance was in the targeting and positioning of Timotei… By positioning Timotei as a natural herbal shampoo with the attendant visual cues, the implication of gentleness was implicit. The differentiation was much more in the positioning than in a major product breakthrough.’ The ideal situation for marketers is if they are promoting a product that already offers consumers a real unique benefit rather than a perceived one.

Using Ecomagination 

In 2003, General Electric (GE) launched a new slogan – Imagination at Work – which topped a poll of US consumers through an online vote hosted by Yahoo! Two years later, it launched a business strategy, Ecomagination, which formed the basis of a subsequent marketing campaign. This achieved genuine stand-out thanks to highlighting the unique nature of GE’s product portfolio and environmentally friendly stance.

The global initiative, which launched in May 2005, has four goals: doubling the R&D investment by 2010, introducing a more extensive portfolio of energy-efficient products, reducing greenhouse gas emissions by 2012, and keeping the public up to date about GE’s progress.

GE wanted to address its customers’ needs and this meant helping them to reduce carbon emissions, make cost efficiencies and be mindful of their impact on the environment. The wind turbines and eco-locomotives featured in the communication – which ran across print, online, TV and outdoor – sold out, and GE’s revenues increased from $6.2 billion in 2004 to $10 billion in 2005. The business objective is to reach $20 billion by 2010. GE came top in Fortune‘s ‘Most Admired Companies’ list in 2006.

Value versus price 

Decreasing price to increase a brand’s fortunes is a dangerous drug. While its effects are often dramatic and instantaneous, its repercussions are insidious and long-standing. Businesses that chase volume by cutting price invariably end up sacrificing value, sometimes in the short term and almost always in the long run… The City intuitively understands this cycle, tending to mark down stock the moment price heads south.

Richard Storey, Planning Director, M&C Saatchi (Storey, 2005)

The biggest advantage of differentiating your product is that brands don’t get sucked into competing on the lowest common denominator: price. Marketing is the most important vehicle through which you can maintain or grow product or service margins.

A combination of low cost and high quality will always be a hit with consumers. In Europe and the United States, over 50 per cent of the population shops at mass merchants such as Wal-Mart, buys flights from low-cost operators and visits websites for bargains. Value players attract customers with low prices and ‘good-enough’ quality, and this can serve as a differentiator in its own right. But when too many companies occupy this space, they fail to be distinctive to consumers.

 Rishad Tobaccowala, the chief executive of the consultancy Denuo, also points out that competing on price has serious ramifications for products and services with competitors in China and India, where manufacturing and servicing costs are a fraction of the price of Europe and the United States. He observes: ‘Marketing officers tend to spend too much on the cost line rather than on the revenue or imagination line.’

Target, the US department store chain, is one retailer that eschewed the bargain basement approach for a strategy that set it apart from the competition. Founded in 1962, its market niche was described in the 1980s as ‘upscale discount’. Designers like Michael Graves started to produce goods for the store. In a nod to its own delusions of grandeur, its advertising slogan became ‘C’est Target’ (with Target pronounced with a French accent, ‘tar-jay’). Continuing its upscale ascent, a recent media first for the
brand was to take every ad in the New Yorker. Sales continue on an upward curve, and Target opened 60 new stores across the United States in 2005 as its ‘design for all’ proposition resonated with the country’s middle class.

If Target had followed a similar tactic to Wal-Mart or Kmart – two stores that pride themselves on offering consumers rock-bottom prices – it would have been lost in the wilderness. By differentiating itself from the start and positioning its range as more premium, it created a space into which it could grow.

Westin: the heavenly hotel 

The Westin Hotel invested in beds that had double the number of springs and that were smoother and softer than average hotel beds. Westin organized its marketing around the ‘Heavenly bed’ and has since added to the ‘Heavenly’ range with a two-nozzled shower, soap, shampoo and towels.

A week after the bed’s introduction in 1999, Westin guests were enquiring about how they could purchase it for their own homes. More than 30,000 guests have now bought a Heavenly bed.

A Westin survey showed increases in guest loyalty and satisfaction, and it was surely no coincidence that ‘comfort of bed’ scored 8.96 out of 10 in 1999, a figure that rose to 9.19 in 2004. Home orders are still popular, with the Heavenly line predicted to generate $8 million in annual revenues.

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