Differentiation and the ‘deadweight’ economy

With recent reports suggesting that inflation may be stabilising, Gartner describes the new climate as a “deadweight” economy and it will involve businesses investing in differentiation to succeed, the research firm argues. 

Why differentiation matters

“Branding lasts, differentiation doesn’t,” argued marketing science guru Byron Sharp, but some thinkers are beginning to disagree. 

The debate between distinctiveness and differentiation has started to assume an “ideological” profile, as Mark Ritson put it, but the debate is vitally important to marketing and sets out the why and the how of the discipline. Getting around two incredibly similar words is tough, however. Check out this WARC Podcast on the topic featuring Ehrenberg-Bass’s Jenni Romaniuk and Northeastern University’s Koen Pauwels. 

What Gartner says

An illuminating new blog from Gartner’s finance practice breaks down the challenges facing finance departments at major businesses, all of which are interesting, but the big ones for marketers are:

• Zero-sum growth
• Waning pricing power

Where the debate comes in

Value rather than volume becomes important for marketers in an inflationary environment, as Dom Boyd, managing director, UK Insights and Effectiveness practice at Kantar, and Felipe Tomasz, of Oxford University, explained earlier this year. 

“You’ve got to design for difference in every way in your brand strategy; in your innovation, in your communications, in your experience – design for difference,” explained Boyd. 

For finance professionals, too, Gartner argues focusing company investments on points of differentiation or uniqueness in a battle for market share. 

Key quote

“The deadweight economy challenges an organization’s ability to meet corporate performance expectations by constraining traditional avenues for growth, pricing, investment funding, cost management, people management, and productivity gains, and deadweight economic conditions can be expected to linger through most, if not all, of organizations’ current strategic planning horizons” – Randeep Rathindran, distinguished vice president, research, Gartner Finance practice.

Sourced from Gartner, WARC