Once upon a time it was possible to differentiate a product or service by having a tangible advantage. “Tangible” means it can be seen, heard, tasted, smelled, or touched. Like a more powerful engine. A sleeker design. A secret recipe.
The problem with tangible advantages is, with today’s technology, they can quickly and easily be replicated. Companies that base their brand essence solely on material differences struggle to keep a step ahead of competitors.
Apple is a case in point. Known for its innovative technology and design, Apple commands worldwide attention with every new product announcement.
Yet Apple’s innovations are quickly duplicated. Copycat brands, by eliminating tangible advantages, tend to commoditize a category and cause consumers to buy based upon price alone.
As a result, the iPhone competes for market share in the smartphone category with numerous manufactures, such as HP, HTC, Motorola (Droid), Nokia, Palm, Research In Motion (Blackberry), Samsung, Sony Ericsson, and others.
Same with the iPod. Revolutionary in design, it faces competition from Archos, Coby Electronics, Cowon Systems, Creative, iRiver, Microsoft, Philips, RCA, Samsung, SanDisk, Sony and scores more digital audio player makers.
However, while the competitors play catchup, what Apple can and does sustain is an intangible competitive advantage: friendliness.
Based upon its design philosophy of making technology simple and easy to use, Apple has positioned itself as the friendly brand of personal technology. This brand essence is well portrayed by the approachable and laid-back character Mac in Apple’s TV spots.
Another case: FedEx differentiated itself by offering overnight package delivery in 1973. At the time, it owned the category. Now it competes with UPS, Airbourne, DHL, Emory, and the U.S. Postal Service. It’s initial advantage was matched by competitors.
FedEx didn’t sustain an advantage based upon delivering overnight. What it did sustain is reliability.
In each case, the intangible brand essence is perceived by customers as creating superior value and thus serves as an obstacle to competition.
Imagine, as a competitor, attempting to be more reliable than FedEx or friendlier than Apple.