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Marketing: this 10-year-old child will explain to you the concept of differentiation

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How do you succeed in business today? More than ever, you have to know how to differentiate yourself. Differentiation has become an essential marketing strategy for business success. In this episode of ” The Business World with Pierre-Raffaele? ” we explain the concept of differentiation in a simple way. We use a concrete example, that of Rusée, a high-end leather goods brand that differentiates itself on two main lines:

  • the use of recycled raw materials
  • an innovative design

 

This video is short, simple, and presents with humour (Pierre-Raffaele had a little trouble pronouncing “differentiation” during the filming) this often-misunderstood concept. If you like this video, don’t forget to like it, comment it and subscribe. A new video is published every Monday morning. It is the logical continuation of our other innovation video (which we also encourage you to watch).

A handbag by Rusée

A handbag by Rusée

Why choose a marketing strategy based on differentiation?

It is a fact that today’s customers are looking for an experience and their willingness to pay more depends on the strength of your brand, your products and the total customer experience. A vital aspect of the customer experience is the differentiation that you offer. Differentiating your offer requires a clear understanding of what customers need and the ability to innovate. For example, the Rusée products have been co-created through Design Thinking sessions. This technique is quite useful when it comes to reinventing a product, a service and providing a new customer experience.

Marketing is knowing what to sell, to whom and how. Marketing strategy is what makes it all happen.

Some examples of marketing strategies based on differentiation

The thousands of articles we have published on this blog inevitably contain several inspiring examples of differentiation strategies. In the following lines, we will not go back over the classic examples (Apple, Nespresso,) but over less known cases.

Flying Tiger

This is an interesting example of differentiation within a specific price range. Indeed, Flying Tiger of Copenhagen offers very affordable and fun products. It is the assembly of these products, the search for the best price/fun ratio that is the essence of the brand. And as we explain in this article, this marketing strategy is paying off since it is difficult to leave the store without having bought something (the author of this article is well aware since he bought an improbable nose-shaped pencil sharpener).

Merci

It is somewhat the opposite of the Flying Tiger. Here we are in the assembly of precise products, not always affordable. It’s a strategy of differentiation that is now quite often adopted in retail by “concept stores” (see here the example of the superb SMETS store which unfortunately closed its doors a few years ago).  In the case of Merci, the strategy works very well. We interviewed its manager several years ago, and he announced very high visitor figures.

Different pricing

A differentiation strategy does not necessarily have to focus on the product. It can also focus on other aspects of the offer, such as the price. Pay-What-You-Want (PWYW), for example, is a marketing strategy that gives the customer the choice to pay what he wants. Studies have shown that this system works well despite the fears it may cause. Customers do not show a tendency to cheat. It was implemented by Garçonne et Chérubin but also by a Belgian daily newspaper. One airport had also embarked on the experiment, but with safeguards that slightly undermined the essence of the system. On a different note, some brands have also implemented different ways of paying. The Nissan Café was a particularly interesting example since it was paid for with energy.

As you can see, there are many ways to differentiate, but to be effective, they must be relevant. In other words, a differentiation strategy must make sense in the customer’s mind to have a chance to be successful.

The World of Business with Pierre-Raffaele, videos that put business within everyone’s reach

The videos “The World of Business with Pierre-Raffaele” meet a dual educational objective: to popularise the terms “business” on the one hand, and to present a coherent set of themes useful for (future) entrepreneurs on the other.

The videos are published weekly (every Monday). Guests are chosen according to the themes, expertise but also according to the interest of their respective backgrounds. We, therefore, do not necessarily seek to interview well-known personalities; we also give the floor to remarkable people who by their specificities can bring an added value to those who view the videos.

For any request or suggestion, please contact us by email at pn@intotheminds.com.

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Author: Pierre-Nicolas Schwab

Pierre-Nicolas est Docteur en Marketing et dirige l'agence d'études de marché IntoTheMinds. Ses domaines de prédilection sont le BigData l'e-commerce, le commerce de proximité, l'HoReCa et la logistique. Il est également chercheur en marketing à l'Université Libre de Bruxelles et sert de coach et formateur à plusieurs organisations et institutions publiques. Il peut être contacté par email, Linkedin ou par téléphone (+32 486 42 79 42)

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