Effective positioning and differentiation of a brand in any market is what defines its success or failure. In today’s highly competitive market place, where companies are constantly trying to get consumers attention it is differentiation and positioning which ultimately sets one brand apart from another. I always stand in admiration of companies that start out as newbies in highly dominated sectors of the market, and then, within a relatively short space of time turn the market on its head to become outright market leaders. The secret to how companies achieve this lies in how well they position and differentiate their brands in the market place. So what exactly is positioning and differentiation and how does it work?
As defined by Wikipedia, “positioning is one of the most powerful marketing concepts, it refers to the place that the brand occupies in the minds of the consumer and how it defines its differences from it’s competitors”.
The first steps involved in effective positioning begin with defining the correct segment and target market, understanding the customer needs and then moving through to communicating the benefits of the brand to the market. Further to this the competition in the particular segment needs to be analysed so as to clearly define the difference between the brand and it’s competition. The brand needs to ensure that it differentiates itself from its competitors and that the difference is effectively communicated so that the brand becomes the product of choice amongst consumers.
One South African company that has been very effective at positioning and differentiating itself in a highly competitive market is Capitec Bank. In fact Capitec have been so good at it that their achievements have not only been recognized locally, but internationally as well. Capitec is a relatively new company, which started out as a micro lending company in the financial services market in 1999 and then subsequently evolved to become the 3rd largest bank in South Africa. Capitec Bank is now considered as one of the fastest growing brands in the country.
The Lafferty Global rankings awarded Capitec a 5 star rating, the only South African company to be awarded 5 stars and also making it the top rated bank in the world. Further to this, Credit Suisse in their analysis of over 3000 companies around the globe, recognized Capitec bank as a company that would out perform its competitors within the next 3 to 5 years. Interestingly enough, Capitec Bank was the only South African company to make it onto the Credit Suisse list.
These remarkable achievements have been gained in a relatively short time frame, where the company has grown from entry level banking to obtaining a stature where it is now also acceptable to high income earners. So exactly how has Capitec bank achieved this? the answer lies in their effective brand positioning.
The company’s main focus is on the low to middle income groups as it continues to enjoy strong growth in the banking sector, where it is said to have a third of the employed people in South Africa as clients. So what has Capitec done differently?
Capitec has recognized the needs of consumers and has served those needs well, they have positioned their brand as simple, affordable and transparent. These attributes are evident in every touch point of the brand, from the branch through to the digital banking platforms. These brand elements have been introduced to the market as the new and smart way to bank and the company’s primal focus has been to help clients to improve their financial lives.
So exactly how is this different from any other bank? First and foremost they identified the high cost of bank charges and the effects these have on banking clients. They cut out the frills and offered banking products with attractive and simple pricing options with no hidden costs, which had massive appeal to the working class. They further simplified the banking experience, made customers feel that they were in control, offered affordable and transparent banking charges and allowed customers to personalize their interest rates and then established a personalized client experience to build long term relationships. In other words, they looked at where the competition was weak and offered products and services which capitalized on those weaknesses to gain massive market share. While Capitec Bank is a relatively new player in the banking sector, they adopted the slogan “The smart way to bank” and left the other banks to play catch up.
The fundamentals of the Capitec brand to help customers improve their financial lives are simplicity, value for money, accessibility and client experience. These brand attributes extend into how the Capitec business model is run and the company is seen to be living the brand.
Capitec is a client centric brand and has focused strongly on customer satisfaction with a multi disciplined approach to marketing, where they don’t just focus on selling, but also educate people in a way to help improve their understanding of money. www.capitecbank.co.za
In today’s world, where the consumer is constantly bombarded by marketing noise, brand positioning and differentiation is the difference between win and lose. Those that effectively position and differentiate their brands are the ones who become front of mind in the consumer and these brands will continue to dominate their respective segments of the market.
References:-http://www.marklives.com/2019/05/brandfocus-capitec-on-branding-a-client-centric-bank/ https://www.iol.co.za/business-report/capitec-is-overall-brand-leader-in-south-africa-report-10501048 https://www.fin24.com/Companies/Financial-Services/why-sas-capitec-is-best-bank-in-the-world-20170627-2
https://www.bizcommunity.com/Article/196/82/45534.html
https://www.capitecbank.co.za/bankbetterlivebetter/articles/capitec-rated-top-bank-in-sa
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