This Part 2 continues from
Re-discovering Differentiation: Part 1

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SUMMARY: Part 1 of this two-part article lays out a concept of business differentiation. This Part 2 describes the application of that concept. To illustrate this application we resort to familiar examples. So we return to our four previously discussed companies — Pizza Hut, Domino's Pizza, Little Caesars, and Papa John's — plus insert a fifth company, the “Independent.” Then for each of them we lay out a hypothetical differentiation scenario. (For another great article on differentiation, see Differentiation-builders: The Antidote to Point-of-difference Diminution.)

For this illustration we use the previously-cited 5-step differentiation process, which is:

1. DISCOVER a point of difference that can be translated into a unique consumer benefit.

2. DEFINE that difference in terms of a brief statement.

3. PROVE the truth of the statement through a logical argument or fact.

4. PROCLAIM the statement everywhere and project the point of difference through every aspect of the business.

5. PROLIFERATE and protect the point of difference by installing differentiation-builders on an ongoing basis.

The following analysis is, by necessity, rudimentary. For greater insight into the differentiation process, see Differentiate or Die (it's a quick, easy read). Also bear in mind that the content of this discussion is for illustration purposes and constitutes neither a recommendation nor a best-conceived idea regarding any company referenced herein.

Pizza Hut Example
Using the above-described 5-step differentiation process, here's how Pizza Hut might further differentiate itself for competitive gain.

Step 1: Discover a point of difference. This can be the toughest part of differentiating. However, a little noodling discloses four noteworthy points of difference for Pizza Hut. First, it's the most ubiquitous, or omnipresent, of all enterprises of the pizza industry. Second, it has the most free-standing buildings of any company in the industry. Third, its uniquely-shaped signature red roof is the most recognized architectural symbol in the industry. Finally, as of late it has enjoyed a measure of success at rolling out creative new pizza products, thereby putting itself into the tentative position of being viewed as the “pizza innovation leader.”

Step 2: Define the difference in a brief statement. A statement that embodies all four of the above-described possible points of difference is:

America's Pizza Home™

This plays to (a) the company's ubiquitous presence, (b) its universal and unique building, and (c) its product innovation leadership. Over time, variations on the statement could be coined for variety, but should always incorporate the core message. An example is: “Makin' it New at America's Pizza Home."

Alternate candidates for the differentiation statement, which put greater emphasis on the innovation aspect, are:

America's Premier Pizza Innovator™

or

America's Pizza Innovation Leader™.

Step 3: Prove that the statement is true. The “America's Pizza Home” statement is so intuitively true that evidence is hardly needed. However, if contested, the proof that we'd provide is the fact that there's more Pizza Hut's, or more Pizza Hut pizzas, in America than any other pizzeria or pizza. To validate either of the alternate statements, we'd simply point to the fact that we've sold more new or unique pizzas than any other pizza enterprise.

Step 4: Proclaim the statement everywhere and project it throughout the business. To make our differentiation statement as ubiquitous as our buildings, we'd make it the tagline on every ad and on every piece of packaging for years — indeed, decades — to come.

Step 5: Proliferate and protect the point of difference. A point of difference — when brought to life through the differentiation process (i.e., steps 2-4) — can be a powerful sales-builder. However, when competitors copy it, they succeed in killing the point of difference and, thereby, neutralize the resulting benefit for the originator. This happened to the Big Three in the latter 1980s and early 1990s. It appears to be happening to Papa John's at the current time. The purpose of this step 5 is to prevent, or at least mitigate, that occurrence. We accomplish this by installing differentiation-builders, or products, services, promotions, and methods that expand that difference and also protect it from competitive imitation. (For how to install differentiation-builders, see Differentiation-builders.)

To this end, some differentiation-builders that we might consider for America's Pizza Home (or America's Premier Pizza Innovator) would include the following:

• Trademark the phrase “America's Pizza Home” (or “America's Premier Pizza Innovator”).
  
  
• Create a “new” pizza product every six or 12 months on an ongoing basis.
  
  
• Obtain a competition-prohibiting patent on each new pizza creation (as much as possible).
  
  
• Introduce a new menu section featuring a line of revolving “new pizza creations.”
  
  
• Create for the new menu section its own logo-ized name and trademark it.
  
  
• Integrate marketing and the new-product innovation process, to make the new pizzas into “America's pizzas” — for example, get pizza-eaters involved in the testing, naming, and promotional planning of new Pizza Hut products.
  
  
• Have Celebrity Pizzas — i.e., new pizzas dedicated to and named after particular celebrities — which might be dubbed the Pizza Hut Celebrity Line.
  
  
• Create a wall section in each restaurant called the “Pizza Hut Great Pizza Hall of Fame” — showing pictures and telling the “story” of the history of Pizza Hut product innovations (including those no longer on the menu).
  
  
• Include in each restaurant a story-board telling the “Pizza Hut All-American Success Story.”
  
  
• Adopt a pizza package concept that embodies our unique building architecture within the structure of the carton, thereby making our carton an extension of America's Pizza Home. (If you'd like to view an example of how this might work, see GSI: Pizza Chain Brand-builder in the Pizza Packaging section of this website.) To further promote the pizza home tie-in, we'd consider creating a unique specialty carton in the form of the actual restaurant — perhaps for kiddie meal purposes (for an example see GSI Example 14).

Domino's Pizza Example
Using our 5-step differentiation process, here's how Domino's Pizza might further differentiate itself for competitive gain.

Step 1: Discover a point of difference. Domino's Pizza was built on the 30-minute free delivery guaranteed point of difference. However, that difference vanished in the early 1990s. Of course its new storefront sign includes the phrase “The Pizza Delivery Experts” in small print on the bottom. While this hints at a point of difference, there's a problem with it — about a thousand other pizza companies could make a credible claim to being delivery experts, as well.

So what separates Domino's Pizza from its competitors today? Basically one thing: Domino's is the creator of pizza delivery on a national scale. It put pizza delivery on the map. In addition, the company's use of the red, white, and blue color scheme sets it apart from other pizza company color schemes (which lean toward earth-tone colors). Finally, several years ago the company introduced heated delivery technology — dubbed HeatWave. This has tended to position — or, perhaps, re-position — the company as the “delivery technology innovator” within the mind of the pizza-buying public.

Step 2: Define the difference in a brief statement. A statement that embodies all three of the above-described possible points of difference is:

The Great All-American Delivery Pizza Co.™

An alternate candidate for the differentiation statement, which puts less emphasis on the American aspect and more on the global, is:

World's #1 Delivery Pizza™

In both cases, each point of difference puts the focus on a PRODUCT (i.e., delivery pizza) rather than a SERVICE (i.e., pizza delivery). This is a subtle but important distinction. Product is tangible, service is intangible. What's tangible can be sensually experienced and, therefore, easily conceptualized and marketed. What's intangible is invisible and, thereby, hard to market.

Step 3: Prove that the statement is true. With the first statement, the proof of its correctness derives from the fact that we have more Domino's Pizza stores than that of any other pizza delivery company. The proof of the second statement derives from the fact that we sell more delivery pizzas than does any other company.

Step 4: Proclaim the statement everywhere and project it throughout the business. To make our differentiation statement as widespread as our delivery pizza, we'd make it the tagline on every ad and on every piece of packaging for years — indeed, decades — to come.

Step 5: Proliferate and protect the point of difference. To insure that our competitors don't co-opt our point of difference, as they did with 30-minute free delivery, we'd install an ongoing stream of differentiation-builders to expand and protect our difference within the public mind. To this end, some differentiation-builders that we might consider for The Great All-American Delivery Pizza Co. or World's #1 Delivery Pizza would include the following:

• Trademark the phrase “The Great All-American Delivery Pizza Co.” or “World's #1 Delivery Pizza.”
  
  
• Install a program of revolving or perennial promotions that drive home our differentiation statement of Great All-American Delivery Pizza or World's #1 Delivery Pizza.
  
  
• Give our original product (the hand-tossed pizza) a distinctive, distinguished-sounding name that reinforces the differentiation statement. An example would be: Domino's All-American Classic™, which we'd honor by giving special status on menus and in advertising. During certain times we might embellish it with the tagline The Pizza that Made Delivery Pizza Famous™.
  
  
• Stay at the forefront of delivery innovation technology by introducing new innovations as “build-upons” to the HeatWave innovation — and obtain competition-prohibiting patents on those innovations.
  
  
• Adopt a pizza package concept that exemplifies one or more of the above-described points of difference. For example, we might adopt a square-shaped carton with an eight-sided internal infrastructure (for an illustration, see GSI Example 11 in the Pizza Packaging section of this website) — thereby achieving an innovative classic-looking box with a unique interior structure that protects the product in transit. Or we might adopt PCE technology and market it as an extension of HeatWave to demonstrate our commitment to delivery pizza quality and delivery technology leadership. (For the technical details of PCE, go to PCE: Hot Feature of the Future.) In building upon the HeatWave concept, and to promote the quality and preeminent status of our delivery pizza, we might consider a cover graphic like the following:

Little Caesars Example
Using our 5-step differentiation process, here's how Little Caesars might further differentiate itself for competitive gain.

Step 1: Discover a point of difference. Differentiating Little Caesars is perhaps the most challenging of these five examples. In the 1970s and 1980s the company was successful in using the two-for-one concept as a point of difference (brilliantly promoted as Pizza!Pizza!). However, the competition effectively neutralized that by 1995. Further, it's virtually impossible to re-invent that point of difference. As Jack Trout points out, differentiating on the basis of price is hard to sustain over the long term.

So what remains for Little Caesars to differentiate on? Perhaps five things. First, the company has always focused primarily on carry-out, as opposed to delivery. Second, it was the originator of bundling large quantities (i.e., two pizzas, breadsticks, etc.) for the purpose of feeding the family, from which it has acquired a “family pizza” image. Third, it has the most recognizable mascot in the industry in the visage of Little Caesar. Fourth, it created during the 1980s-90s a reputation for fun, humorous, clever advertising. Finally, Little Caesars is still owned by the original founders — Mike and Marion Ilitch and their family. This makes it the largest family-owned pizza enterprise in America.

Step 2: Define the difference in a brief statement. An obvious statement that embodies our carry-out preeminence is:

King of Carry-out Pizza™

This also has an indirect tie-in to the Little Caesar, as he's a king, of sorts.

Another statement, which derives from the fun-family pizza image, is:

America's Family Fun Pizza™

And a final statement, which plays on the family ownership angle as well as the family pizza image, is:

America's Pizza Family™

Step 3: Prove that the statement is true. To make any of these statements credible we must produce proof. Proving the first one is easy. We'd point to the fact that we sell more carry-out pizzas than any other pizza company. Proving the third one is probably easy as well, since the company is most likely the largest pizza company in America still owned (directly or indirectly) by the founding family. Proving the second one is slightly problematic. To make this one work we'd have to re-institute the humorous advertising of the 1990s and instill a family fun side to our marketing and store décor. This shouldn't be hard to do.

Step 4: Proclaim the statement everywhere and project it throughout the business. To make our differentiation statement as widespread as our carry-out pizza, we'd make it the tagline on every ad and on every piece of packaging for years — indeed, decades — to come.

Step 5: Proliferate and protect the point of difference. Some differentiation-builders that we might consider for the above statements would include the following.

• If we opted for the “King of Carry-out Pizza” statement, we'd institute a 12-minute Carry-out Guarantee along with store operational systems to enable meeting that promise most of the time. Then we'd make this concept a pillar of our marketing program and advertise it on an ongoing basis.
  
  
• If we opted for the “America's Family Fun Pizza” statement, we'd continue to focus on fun advertisements. Plus we'd market Family Packs along with tie-in promotions aimed at the family and kids. We'd also convert our pizza package — currently the ho-hum traditional pizza box or the U-board and bag — into a unique, fun, attention-grabbing carton. For an example of this concept, see GSI Example 9 in the Pizza Packaging section of this website.

Papa John's Example
Papa John's is currently pursuing its “Better Ingredients, Better Pizza” point of difference. So steps 1-4 are done. All that's needed now is for the company to do step 5: Proliferate and protect the point of difference. We would accomplish this by installing differentiation-builders. If we fail to do this our position and credibility in the public mind as regards our point of difference will gradually erode (which, indeed, appears to be happening already). To prevent this from occurring, we must institute an all-out Quality Proliferation and Protection Program. This would be a combination marketing+ops initiative that would likely include the following:

• Re-tool operational-management systems to insure that the pizza that's sold looks like the pizza that's advertised (currently there's often a wide discrepancy.

• Create ways to further enhance the current ingredients going into the pizza (including the sauce), and protect those “ways” by making them a trade secret or by obtaining competition-prohibitive patents on the processes.

• Develop and promote exciting new ingredients of uniquely outstanding quality. One of the many areas in which this would be done is the sauce arena. We'd roll out a “unique sauce menu” containing our original signature sauce plus two new sauces — all of outstanding quality and taste. We'd do something similar with cheese and toppings. And we'd advertise and promote each new ingredient with fanfare and fun. So, while the competition is continuing to dilute any of its remaining “point of difference” and to erode its long-term image and customer credibility by continuing to push short-term sales gains driven by give-away promotions involving sub-standard freebie products, we'd go on a “quality-building offensive.” We'd expand the quality gap between us and the competition and, thereby, strengthen our original Better Quality sales proposition.
  

• Adopt pizza packaging that embodies, supports, and reinforces the differentiation statement of superior quality and that provides a superior pizza-eating experience to that of the competitions' package. One way we'd do that is by installing PCE on our current carton, perhaps as an exclusive feature. (For the technical details on this concept and how we'd use it for high-impact differentiation, see PCE: Hot Feature of the Future.)
  
  TO SUM UP, the above strategy of installing differentiation-builders to enlarge the quality gap and, thereby, strengthen the Better Ingredients, Better Pizza point of difference is the most promising and cost-effective way (in the immediate future) that Papa John's can return its AWUS growth to an upward trend that out-performs that of its competitors. Failing to do this, it will slowly slide into playing its competitions' game, which will be a losing proposition over the long run. Pulling off this strategy will pose interesting logistical and store ops challenges. But they're all surmountable, given creativity and determination. (For more on Papa John's, go to Papa John's: Is It Back to the Future?)
  

Independent Pizzeria Example
Using our 5-step differentiation process, here's how an independent pizzeria (company) might further differentiate itself for competitive gain.

Step 1: Discover a point of difference. Many pizza-eaters equate the independent pizzeria with personal care, professional dedication, and artisan craftsmanship. They also equate it with superior quality pizza and ingredients. In some cases this perception is a reflection of fact; in other cases it's merely perception only. Either way, we can build on it.

Step 2: Define the difference in a brief statement. An example of a possible statement of differentiation would be:

________'s Quality, Caring, Independent Pizza-maker

We'd fill in the blank with the name of our neighborhood, city, county, or state … or, perhaps, our country!

Another one is:

________'s #1 Independently-owned Pizza Co.

Step 3: Prove that the statement is true. To prove the veracity of either of these statements we'd look to public surveys or polls that rate us #1 in our area. If none are available, we'd conduct our own poll and hope that the results support our contention. If they don't, we'd institute operational and marketing programs to make that happen. If we couldn't do that, we'd change our statement to something that's provable.

Step 4: Proclaim the statement everywhere and project it throughout the business. We'd put our differentiation statement on signs, advertising, and packaging for years to come

Step 5: Proliferate and protect the point of difference. As much as possible, we'd attempt to implement the differentiation-builders described in the prior four examples that are applicable to us. In addition, we'd occasionally introduce a “new” creative pizza product, or pizza topping, to support our image of being a pizza craftsperson. Further, we'd stay constantly aware of what competitors are doing — through up-to-date field reconnaissance — and never let them get a leg up in terms of product innovation or image enhancement. Finally, we'd study the differentiation strategy and marketing approach of Stanislaus Food Products (i.e., Dino Cortopassi) over the last decade. Then we'd adapt that strategy and approach to fit our pizza enterprise and, finally, we'd apply it vigorously. This tomato company's marketing concept is a perfect model for an Independent Pizzeria to emulate for achieving maximum competitive effectiveness. (For more on the Total-impact Marketing stratagem of Stanislaus, click here.)

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This article was authored by John Correll.
Response may be directed to john@correllconcepts.com.