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Unless your product is entirely new to the world, chances are that you have a competitor selling an exact or similar product, targeting the same customer segment as yours.

One way out of such a situation is to differentiate your product. However, this is almost always time- and cost-intensive, and, in some cases, not even possible. The other way out is an advertising battle, but with similar products, that’s just noise to the customer.

What if there was another way out of this situation–one that could be a win-win? Where you and your competitor not only coexist but thrive!

The brand value pyramid

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The brand value pyramid

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The brand value pyramid is a structural way to look at how customers perceive the benefits provided by any brand and the hierarchy of those benefits. For marketers, it is a great way to arrive at the positioning for their brand.

Here’s what the pyramid looks like and what its tiers signify for the customer:

Bottom tier: Represents the core functional benefits of the product. It answers “What do I get?”

Middle tier: Represents the emotional benefits of the product. It answers “How does it make me feel?”

Top tier: Represents the self-expression benefits of the product. It answers “Who am I?“

Now that we have an understanding of the brand value pyramid, let’s look at how brands can position themselves differently at each tier of the pyramid.

Differentiation based on functional benefits

At the base of the pyramid lies the fundamental functional value. This is the core product or service that meets the basic needs and expectations of the customers.

Similar brands can differentiate in the following manner:

● Different technology/process: Differentiate by incorporating innovative technology into products or services, offering features that competitors do not provide.

● Superior quality and reliability: Emphasise higher quality materials, craftsmanship, or performance, ensuring a more reliable and durable product compared to competitors.

● Efficiency and convenience: Highlight streamlined processes, quicker delivery times, or user-friendly interfaces, showcasing how the brand’s functional benefits make the customer experience more efficient and convenient.

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Bounce and Yulu operate in the shared mobility category targeting busy urban professionals. While the former leads the race with its fleet of city scooters, the latter is known for its low-speed electric two-wheelers.

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For example, Bounce and Yulu operate in the shared mobility category targeting busy urban professionals. While the former leads the race with its fleet of city scooters, the latter is known for its low-speed electric two-wheelers.

Differentiation based on emotional benefits

Moving up the pyramid, emotional value plays a significant role. Brands that connect with customers on an emotional level often create lasting impressions.

This can be achieved through:

● Compelling brand storytelling: Brands can differentiate by crafting emotionally resonant narratives that connect with consumers on a personal level.

● Emotionally intelligent marketing communications: Tailoring marketing messages to evoke specific emotions that align with the brand’s identity and values can differentiate it in the market.

In the FMCG category, Maggi has built a strong emotional narrative around being an integral part of childhood as well as adulting.

Similarly, Tata Salt has earned its market leader position after years of weaving a brand story around the trust of the brand Tata and being the desh ka namak.

Differentiation based on self-expression benefits

At the pinnacle of the brand value pyramid is transformational value. Brands that go beyond the transactional and contribute to the personal growth and transformation of their customers stand out.

This could involve empowering customers to achieve their goals, inspiring them to pursue their passions, or facilitating positive lifestyle changes. Thriving brands in this segment differentiate themselves by becoming an integral part of their customers’ life journey.

For example, as sustainability and national identity becomes more and more important to the new-age customer, FabIndia have positioned itself as the choice of the Indian who takes pride in their culture and roots while staying responsible about the environment.

At the end of the day, there’s enough space for several brands to co-exist in the same category. All they need to do is strategically navigate the brand value pyramid and add different values at each level.

By understanding and addressing the diverse needs of their target audience, brands can establish a unique identity, build emotional connections, and create lasting relationships with their customers.

(The author is an independent marketing consultant with over 14 years of industry experience.)