Brands in Kenya today are engaged less in competition and more in copyitis, pronounced copy-it-is, meaning that they copy each other and don’t attempt to differentiate themselves among their target audiences. The opinion of South African investors I know is that this is a market where a new product is launched today and replica products are introduced tomorrow, as is the case in the sports betting arena currently. In a situation where you are faced with prevalent copyitis, there is a great opportunity to differentiate your brand to gain marketshare and build customer loyalty.
Brand differentiation can be defined as those unique qualities offered by a brand that sets it apart from the competition in the customers view. It goes beyond the logo design, brand image, packaging and advertising, and into the customer experience and the brand performance. 50 years ago brand differentiation revolved around product development and continuous product improvement to ensure that its performance against competitors was unmatched. As competing products became more alike, the emphasis shifted to marketing communications, packaging and customer experience.
When Equity Bank transformed from a building society into a bank, they used the concept of differentiation to find their niche in the market. Their product was focused on lower income groups and they did what was necessary to reach and appeal to that target audience. For example they opened up branches in locations that other banks had shunned because they didn’t have desirable customers. In fact, that was the time when banks began to dispose of customers by raising their minimum balances in order to get rid of customers that were not perceived as profitable. Equity Bank’s branch locations, livery and staff were constituted with the primary aim to make their target customers comfortable in order to build the necessary relationships that would lead to brand preference. Not only did they attract a large number of customers from other banks, but they also began to grow the market exponentially and attract the unserved population.
They also differentiated their bank by bringing the decision making closer to their customers. The branches were charged with making quick decisions to acquire customers, whether through opening new accounts, loan disbursements and other services. It was also interesting to note that most of the community investment and charity activities were initiated and implemented at branch level. At local soccer tournaments for example, the branch manager would quickly decide how to support the event with ambulances, transport, drinking water for the athletes and other forms of sponsorship, endearing the brand to the local communities. This was in contrast to the CSR initiatives of the competing banks that had relatively slow and arduous centralised decision making processes, diminishing the perceived impact and the ability to demonstrate the sense of urgency that Equity portrayed. Equity was able to leverage on this customer centric decision making process to create closer ties with their customers and address their needs.
There is the story about a branch in Meru in an area where a majority of the customers were engaged in the farming sector, and they would make trips to the bank straight from their farms while still wearing their muddy gumboots. The staff noticed that the customers were making fewer trips to the bank because they were uncomfortable with soiling the clean floors. So the staff purchased bales of sawdust which they used to cover the floor so that the customers would feel less conscious of creating a mess. This one action greatly improved the customer relations and increased the average number of transactions at the branch.
The effects of differentiation on the bottom line is demonstrated by the company’s performance as they grew their profits from Ksh. 218 million in 2004 to 22.4 billion in 2014 and their customer base from 413,000 in 2004 up to 9.7 million in the same period.
Al Ries and Jack Trout developed the concept of positioning and they indicated that it is possible for a brand to reposition the competition through its actions. This was the case as Equity Bank repositioned KCB which initially had the ‘people’s bank’ tag. Equity aggressively captured the top position in that segment through word and deed up to and including their tagline which states that they are your ‘listening, caring financial partner’, while KCB states that its ‘making the difference’.
In a country where companies face little competition and a lot of copyitis, brands can gain marketshare and grow an entire sector through differentiation right from product development and innovation, to marketing communications, and finally through to the total customer experience at every touch point.