To be or not to be different: Exploration of norms and benefits of color differentiation in the marketplace

Abstract

Building a strong brand identity is central for increasing brand equity. As a result, oftentimes, brands develop differentiation strategies in order to stand out from competitors. Yet, is value always gained through differentiation, or is it possible that some value could be forfeited by straying too far from established product category associations? This research examines color norms within product categories and addresses the question of whether visual differentiation is always helpful. With data for 281 top brands, the authors calculate product category color homogeneity scores for 15 product categories and 40 subcategories to empirically explore color norms. Then, these calculations are used in conjunction with brand equity scores to examine the relationship between color differentiation and brand performance. The results show that while color differentiation is helpful for some product categories, it can also be harmful for others. Specifically, the investigation reveals that adhering to color norms may be beneficial for product categories containing a dominant market leader, especially high-involvement categories. The results of this research highlight the existence of visual product category norms, and emphasize both the benefits and risks of visual differentiation should be considered.