Lifestyle Branding: The New Frontier of Competitive Differentiation
Lifestyle positioning has become an increasingly common approach among managers, especially in categories in which functional differences are hard to maintain. In addition to the traditional lifestyle brands such as Ralph Lauren, Abercrombie & Fitch, and Harley Davidson, a number of performance-oriented brands—including Gillette, Dove, Nestle, and Puma—have transitioned their focus to consumer lifestyles.
Marketers view lifestyle positioning as a way to break free of the cutthroat competition within a category by connecting with consumers on a more personal level. But they may be setting themselves up for even fiercer competition, according to Northwestern University’s Alexander Chernev.
Chernev discussed the strategic implications of lifestyle brand positioning at MSI’s February 2014 conference on “Brands in the Balance: Managing Continuity and Change.” As professor of marketing at the Kellogg School of Management, he has taught and written extensively on brands and effective brand marketing strategies.
“The open vistas of lifestyle branding are an illusion: functional brands are trading in-category competition for even fiercer cross-category competition, competing not only with their direct rivals but also with brands from unrelated categories,” he says. “Because lifestyle brands compete for a share of a consumer’s identity, this competition is not bound by product categories. They compete with virtually any self-expressive activity, such as ordering one’s favorite coffee, listening to one’s favorite band, or social networking. Focusing on lifestyle puts brands like Abercrombie & Fitch, Harley-Davidson, Gillette, Puma, Starbucks, and Facebook in direct competition with one another.”
The need for self-expression, like most needs, can be satiated when consumers are exposed to multiple lifestyle brands and diverse self-expressive activities, Chernev says. As more brands enter the self-expressive domain and consumers find more non-brand ways of self-expression, the relative importance of many lifestyle brands will likely decline.
Chernev points to a 2011 Journal of Marketing study in which he and Ryan Hamilton and David Gal investigated the effects of alternative means of self-expression on consumer brand preferences. They found that presenting consumers with multiple self-expressive brands made each of these brands less personally relevant, less differentiated, and less desirable. Furthermore, this brand satiation occurred by merely asking consumers to think about self-expressive brands and even by engaging consumers in non-brand self-expressive activities.
These findings may prompt marketers to reconsider the viability of lifestyle positioning as a brand differentiation strategy. They also raise a number of important questions: Should a functional brand consider repositioning itself as a lifestyle brand? How does such repositioning change a brand’s competitive landscape? How does such repositioning change a brand’s equity? How can a brand sustain its lifestyle strategy?
There will be winners and losers in the lifestyle branding game, says Chernev. Lifestyle branding requires a different set of core competencies and strategic assets than competing on functional attributes, and only those brands that can truly relate to their customers’ identities will succeed.
From "Competing for Consumer Identity: Limits to Self-Expression and the Perils of Lifestyle Branding" by Alexander Chernev, Ryan Hamilton, and David Gal, Journal of Marketing (May 2011).
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