51. Product Differentiation

The most effective brands are those that have a high degree of differentiation. Some product categories can be highly differentiated and others, especially commodity consumer products, are more difficult to differentiate. The next time you are in a grocery store, just take a look down the laundry detergent aisle or browse the dozens of toothpaste brands and observe how the vast array of choices can be so confusing.

That said, remember that a brand is created through differentiation and there are lots of ways you can do this creatively. Products can be differentiated based on size, form, performance, features, durability, reliability, ease of repair, design, and style.¹ Arizona Iced Tea was one of the first beverage companies to distribute a beverage product in a large can. Cell phone manufacturers promote “indestructible” mobile phones for reckless teenagers. Maytag stresses reliability of their appliances. Herman Miller promotes style.

Products are differentiated by several other factors in addition to just form and functionality. Brand is important, as are associations with distributors and third parties. Customer service, customer experience, and technical support are also important factors that attract buyers and drive them to endorse it and tell others about it.

Design has become increasingly important to consumers. Retailer Target observed this trend long before other retailers, using design as a point of differentiation. The company believes that design isn’t limited to museums, and style doesn’t have to be expensive to be attractive. This strategy has worked extremely well, and Target has extended this design strategy across several types of product lines, from Mossimo’s design of women’s clothing to Michael Graves’ designs found in the kitchen aisle. A significant section of their Web site is devoted to showcasing designers and their philosophy. Restoration Hardware is another retail chain that has a similar emphasis on design and successfully executed the strategy in a direct marketing campaign.

The importance of product innovation and design can be seen by studying the creative new companies that are revitalizing even the most mundane of household categories, like soap and cleaning products. Two former schoolmates teamed up to create Method, a company that has exploded in growth through the successful application of product design.², ³

Design with a Purpose

When David Butler joined Coca-Cola in 2004, he walked into a product design conundrum. The world’s most powerful brand had become diluted from decentralized marketing and a steady turnover in marketing leadership. Category sales were declining due to a constant barrage of new products in the non-carbonated market.

Big problems call for a big new approach. Butler has a new, refreshing approach to global branding and product design. First he made fundamental changes to the role of design in a global brand. At corporate headquarters, he stopped using the word design (because no one knew what it meant anyway) and created a three-page manifesto called “Designing on Purpose” that spoke not about design, but about the language of the Cola-Cola culture: How to sell more product.

Butler said, “I wanted to show how you could create more value for the business through design....How do we sell more of something? How do we improve the experience to make more money and create a sustainable planet?”⁴ Next, he focused his challenge around the following goals:

• Increase customer satisfaction for a product in a declining market that was moving away from carbonated beverages.

• Reduce the carbon footprint caused by a global supply and distribution chain.

• Offer more choices to consumers within the confines of limited space in fast food restaurants and cafeterias.

• Acquire accurate, real-time feedback on customer choices.

• Elegant Design “Make it look like a Ferrari” (the wish of CEO, Muhtar Kent).⁵

By applying systems thinking to achieve all these goals (and of course, the goal of selling more product), Butler created the Freestyle fountain, a beautiful and functional new piece of equipment that dispenses over 100 different types of Cola-Cola varieties. Not only is it unique in offering a vast number of products, it’s also smart, enhances environmental sustainability, and is beautiful to look at. A built-in computer enables the company to monitor what, when, where, and the quantity of beverages consumed. It reduces the carbon footprint by replacing five-gallon bags of concentrate with 46-ounce cartridges. And looks? Beautiful, sleek, elegant, and useful—all words that describe the elements of great design.

Then Butler took on the even bigger challenge of unifying the Coca-Cola brand identity. Coke is a colossal brand with 450 brands sold in 200 countries through 20,000 retailers. More than 300 agencies work on the Coca-Cola brand. Over the years, marketing became decentralized and brand identity became diluted as each country put its own spin on localization. Butler worked with Todd Brooks, group design director for global brands, to develop a system that would provide unified brand identity while also providing the ability to localize concepts. The team came up with a set of brilliant and simple product design standards that could be used worldwide to localize marketing and sales campaigns instantly. They consisted of four brand assets and four design principles:

Brand Assets: Color red, the script font, ribbon, and bottle contour.

Brand Principles: Bold simplicity, real authenticity, the power of red, familiar yet surprising.

The result was the Design Machine, a unique tool that allows marketers to develop and customize their own marketing materials utilizing the four aspects of brand principles and brand assets in product design. It’s part web-based design tool and part asset management system that enables customized point of sale design and delivery from anywhere in the world. Marketers simply pick a language, a product, and an occasion and the Design Machine sends the file for local approval and then to the printer for production. It’s an elegant solution that drives brand standards, product innovation, and business value.

Mid-size and small businesses have their own marketing and brand challenges, especially when expanding into new markets and using new partners and distributors. If the world’s leading brand can simplify their brand strategy, so can you. See if you can apply some of Coke’s design principles to streamline your brand standards. As more companies expand their marketing programs through social media and affiliate marketing programs, a concise description of your brand essence will be more important than ever.