Marketing 101: Branding your business in a competitive environment

Establishing a brand identity in a competitive environment can be challenging for any business, particularly small businesses and startups.

And it’s especially challenging if you’re starting a new business.

Not every company represents a “new-to-the-world” idea, and not every company has the luxury of exclusive ownership of a market segment.

There are literally thousands of examples of this: a new entrant in a market establishes a brand presence, executes a powerful marketing strategy, and achieves operational efficiency, and can capture a significant piece of that market, often becoming the market leader in the process.

A great example of this is the rise of Google and the demise of AltaVista, Lycos, Yahoo, and a raft of others.

In 1998, Google was the new kid in an established (if not quite mature) market for Internet search, and by 2004, it was by far the leading Internet search engine, handling almost 85% of the search requests on the web.

Google, and its brethren in the world of new entrants, found success by asking three key questions:

1. Have we established a “frame of reference?”

2. Are we effectively leveraging our “points of parity?”, and

3. Are the points of differentiation compelling?

These questions can serve as a simple framework for establishing a new brand in an existing or mature market and can provide a strategic approach for a company battling to gain market share against existing competition.

Here’s what you must do to brand your business and gain a competitive advantage.

1. Establish a frame of reference

You can establish a competitive foothold only if you understanding how your products and services would compete in your target market.

For instance, a company producing a new snack bar should ask if they are positioning their product correctly: is it a kid’s snack? An energy bar? A diet supplement? This is how they will determine against whom they are competing and on what value offering they are competing.

A good example of this would be Coke; this popular beverage competes in both the “soft drinks” frame and the “thirst-quenching drinks” frame. Companies can expand their frame of reference to preempt competition; when a competitor introduces a new sports drink, not only must they compete against other sports drinks, they must compete against Coke as a thirst-quenching beverage for a scorchingly hot day.

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2. Leverage points of parity

Your customers must first think of your brand as a legitimate competitor in the market. To accomplish this, you must demonstrate how you differentiate from your competitors.

This is particularly important when building a new brand but can be challenging even with established products.

In the Google example, the company first had to show that its search engine could provide fast response time to a user’s query and meaningful and accurate search results. These were the basic requirements of a search engine, and without these, Google would never have been viewed as a valid offering.

Also, it is critical for new brands to attack and effectively neutralize established competitors’ points of difference, recasting these as points of parity. A great example of this is Visa’s introduction of gold & platinum cards to compete with American Express’s prestige; In fact, Amex’s main point of difference was turned into Visa’s point of parity.

3. Differentiate in a compelling way

There are three essential types of brand differences:

1) brand performance associations,

2) brand imagery associations, and

3) customer insight associations.

A combination of these differences allows companies to illustrate how they are different from the competition clearly and to do so memorably and compellingly.

Brand performance associations are ways in which an offering attempts to meet its customer’s functional needs; in other words, does the product do what it says it will do?

With search engines, on a fundamental level, the functional requirement is that a query returns accurate and meaningful results. Google’s (incredibly) compelling point of differentiation was that the results were returned in a clean, spare interface, with no distracting elements or extraneous information.

At the time, Google’s established competitors all used search as an individual function among many others: news, weather, widgets; Google made search about search and nothing else, and this clearly addressed the performance association and provided a compelling differentiator.

Brand imagery associations – a brand’s visual identity – determine how a customer looks at a brand’s palpable qualities and features. Google’s simple-as-can-be interface defined its brand imagery, so the association in the user’s mind was just with the service’s functionality and serviceability.

Companies like Google have to establish this by understanding who will use the offering and under what circumstances. Google communicated this clearly, and its message propagated: Google was the leading organizer of the web’s information.

When a brand’s performance and imagery don’t differ from the competition, customer insight associations show customers that a brand has an awareness of the problems they face.

A good example of this is Lee jeans and their advertising showing women searching fruitlessly for a pair of jeans that fit well. This imagery served to position Lee as the brand that offers a superior fit and built that association in its consumers’ minds.

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