Such a fantastic webinar that defends differentiation from Mark Ritson. He nails it by talking about “relative” differentiation rather than “uniqueness”.
I’ve always believed that #Differentiation and #Distinctiveness work beautifully together. There is no need to put them in a battlefield. We’ve just been unfair to Differentiation over recent years and it’s time we revisit this with an open mind.
According to Empirical Generalizations about Marketing Impact, published by the Marketing Science Institute, “Long- term sales growth for a brand is derived mainly from category growth.” Such growth is hard to come by in many mature categories. But the value of a brand isn’t determined simply by sales; it is also determined by profitability.
If you can command a premium price, you can increase the value of your brand without significant volume growth. This is a considerable advantage. McKinsey finds that, if volume remains stable, a 1 percent increase in average price improves operating profits by 8 percent. That is three times the increase generated by a 1 percent increase in volume.
Unfortunately, a 1 percent decrease in price has the opposite effect. McKinsey concludes that a strategy that cuts prices to drive volume is “generally doomed to failure in almost every market and industry.”
So what can justify a price premium? Perceived differentiation. A brand can thrive at a higher price point when it is seen as a well-differentiated, desirable choice — that is, when it has a meaningful, relevant, and valuable point of difference.
This is such a great example of getting an idea right with AI in current times of inflation.
“The Inflation Cookbook is a digital platform helping users to pick dishes based on live ingredient prices, with some help from AI, nutritionists and chefs. Developed by food delivery marketplace SkipTheDishes, the online tool helps Canadians to find affordable nutritious foods and optimise grocery budgets. The tool first tracks the price evolutions of hundreds of food products in real time. The platform also offers seven weekly recipe suggestions crafted using cost-efficient items as star ingredients.
Strategic Opportunity
This iteration of what is called Budget Bots in the kitchen shows how businesses can commit to combating food insecurity and support communities without being condescending, but encouraging creativity and resourcefulness.”
You’ve all loved #TheMiniStrategyBites, thank you! Now welcoming you to the #MiniAIBites. Over the coming weeks I’ll be sharing some great innovations around AI. Watch this space.
Here goes the first one. Heinz AI…… Ketchup! An AI campaign done SO well. The ultimate mash-up of Brand, Creativity and AI. Check it out!
