The Power of the Branded Differentiator

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If a brand fails to develop or maintain differentiation, consumers have no basis for choosing it over others. The product's price will then be the determining factor in a decision to purchase. Absent differentiation, says the author, the core of any brand and its associated business — a loyal customer base — cannot be created or sustained.

In a time when the competitive terrain for most brands is difficult to brutal, the author describes a new tool that can help companies maintain an advantage: the branded differentiator. A branded differentiator can be a feature, service, program or ingredient. To be worthy of the term "differentiator" — to be more than just a name slapped on a feature — it must be meaningful to customers; that is, it must be both pertinent and substantial enough to matter when people are purchasing or using the product or service. It must also be actively managed (and thus be able to justify the investment of management time) over an extended period — years or even decades — so that it does not become stagnant.

This article explores the different types of branded differentiators, the pros and cons of developing them internally versus looking outside for them, and questions about managing these brands-within-brands.

David Aaker is vice chairman of Prophet, a brand-strategy firm, and professor emeritus of marketing strategy at the University of California at Berkeley's Haas School of Business. He can be reached at daaker@Prophet.com.

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