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As the number of states legalizing medical and recreational cannabis continues to rise, more consumers than ever are purchasing products from adult-use and medical markets, and cannabis businesses now dominate the US market as one of the fastest-growing industries.
In 2020, legal sales across the nation reached a record $36.9 billion, and this trend shows no signs of slowing down. The 2021 Annual Marijuana Business Factbook estimates that cannabis sales in the US will hit $48.4 billion this year, an increase of 31% from 2020 sales, and Marijuana Business Daily projects that this growth will skyrocket to $84.3 billion in 2025.
Due to these unprecedented levels of success, even amid a global pandemic, the cannabis industry has become saturated with businesses expanding throughout both new and mature markets across the nation. If you own a cannabis business, you already understand how difficult it can be to stand out among literally thousands of competitors in the legal market.
The key to success in such a highly competitive and constantly evolving market is creating a brand that resonates with consumers emotionally and allows you to differentiate your offerings from your competitors’ products.
Today’s cannabis consumer base encompasses a wide variety of clients, from affluent cannabis connoisseurs willing to pay top dollar for artisanal products to average middle-class clients who want to enjoy the benefits of cannabis without straining their budgets.
As the cannabis industry grows, so does the opportunity to secure potential customers by featuring value-priced cannabis brands as part of your business plan. Review the information on creating online differentiation for your cannabis brand.
Understanding a Brand Versus a Business
Before diving into the specific branding and marketing tactics you can use to differentiate your cannabis brand from competitors, it is critical to understand the difference between a business and a brand.
A business or company refers to the organization that creates products or services. At the same time, a brand is defined as the image and personality a business creates to engage its target audience and establish itself as a valuable resource for what it is seeking.
In other words, a business is composed of the organization’s daily operations and its employees, and a brand serves as the public face of the company’s particular line of offerings. Your brand works to influence consumer preference and purchasing decisions.
Because a single business can encompass multiple brands, businesses in consumer markets primarily promote their brands rather than the overall company name. Each brand targets different prospects, sometimes in entirely different market sectors, and therefore must take different approaches to market their products with highly targeted campaigns.
For example, the international cosmetics company L’Oréal owns several cost-effective brands such as Maybelline New York and Garnier, as well as luxury brands such as Yves Saint Laurent and Giorgio Armani Beauty.
Even though these brands all offer beauty products, each one has its own distinct personality and is carefully marketed to appeal to different types of consumers with varying needs, preferences, and budgets.
The Principles of Effective Marketing Strategy
Many different marketing theories and models exist, but the most helpful strategy is customer-value driven, meaning it focuses on determining what cannabis customers really care about and using this information to guide your marketing efforts.
To make your target audience care about your brand, you should be able to prove that your brand understands their needs, desires, and preferences. Ensure they can identify with your brand.
When your marketing campaigns can accomplish these goals, you can engage a broader range of potential clients, give them the information they trust, demonstrate your credibility and authority in your market, and convince them to buy your products.
A customer-value driven strategy involves the following three essential elements:
- Targeting/segmentation: Who is your ideal customer?
- Positioning/differentiation: What makes your product unique?
- Value proposition: Why should customers buy your product?
When you have the answers to these questions, you can implement the four Ps of marketing to develop your brand identity while satisfying the three elements above.
The four Ps are:
- Product: What goods or services will you be selling?
- Price: How much will your products cost?
- Place: Where will you concentrate your sales efforts?
- Promotion: Where and how will you advertise your products to drive sales?
Marketing Value-Priced Cannabis Brands
Taking cues from other successful businesses, many cannabis companies have diversified their offerings across several brands, each with its own distinct products and accompanying marketing strategy.
Like brands in other industries, data-driven marketing for cannabis brands is crucial for differentiating these brands from competitors, making connections with prospects, and turning them into paying customers.
An effective cannabis brand differentiation strategy involves many components, including how brands are created, which products will be offered on the market, how these products are displayed, and even the language used to communicate with consumers.
Utilizing a customer-value-driven strategy for your value-priced cannabis brand means you need to deliver economic value to your customers at a price point that accurately reflects this value. After identifying your target audience and developing a brand with unique products that interest them and offer value, you can implement a targeted strategy based on this insight to promote brand exposure and awareness.
As customers engage with your brand and have positive experiences, they can become advocates for your brand and create further engagement and viral opportunities to expand your reach. With a comprehensive strategy in place, you can firmly establish your reputation for high-quality yet affordable cannabis products and create a foundation for future success and growth.
Cannabis Brand Targeting
The first step in marketing value-priced cannabis brands requires conducting thorough research into your desired target audience to define who they are and understand their needs, interests, and preferences. With this information, you can determine what motivates them and build your marketing strategy around engaging them and giving them the information they need to make a purchasing decision.
Detailed demographic data can include age, gender, income, occupation, location, shopping behaviors, motivation for cannabis consumption, and any concerns they have or challenges they face, as well as how they discovered your brand.
It might seem like a good idea to develop a brand identity and message that appeals to everyone who could potentially become a customer, but this strategy actually undermines your marketing effectiveness. Instead, you should target the minimal viable audience or the smallest group of customers you can work with to sustain your business and focus on making unique products that can help improve their lives.
By targeting this audience instead of sharing a diluted version of your message for the sake of mass appeal, you can develop a compelling, impactful message for the people who matter most rather than wasting time trying to please people who are unlikely to interact with your brand.
When targeting your prospects, it is crucial to recognize that value-priced cannabis customers have different goals and budget constraints than affluent buyers seeking luxury cannabis products. Research shows that value customers are frequent users, typically consuming at least once per week, but they tend to earn lower incomes and avoid heavy spending or splurging on fancy material goods.
In addition, they tend to be 40 years old and up and have been cannabis users for a long time or have consumed in the past and recently decided to start again. In most cases, they began purchasing cannabis from the informal market and are focused mainly on price and convenience, not flashy marketing tactics or promotions.
Cannabis Brand Positioning
After you have acquired essential data about your audience, you have the information you need to develop your value-priced brand around their needs and preferences. You should be in total control of your brand image from the very beginning so you can distinguish yourself from other brands, tell a compelling brand story, and create a positive and lasting first impression for your customers.
In such a saturated market, your brand identity must have a solid personality, so you can engage prospects, show them what makes your product unique, and make sure they can find your brand among a sea of competitors. Because cannabis has a long history in the black market, it is imperative that your branding presents a respectful image. Hence, clients view you as an established, law-abiding business they can trust for quality products.
Unfortunately, many brands neglect this opportunity for creativity and use a stereotypical symbol that can already be found on thousands of products—the cannabis leaf. According to the US Patent and Trademark Office, 44% of logos registered by cannabis-related businesses as trademarks include the cannabis leaf, meaning a great deal of existing brand logos have similar appearances that make them nearly indistinguishable on the shelves.
If your competitors use the same symbols, you need to do something different to stand out. Keep in mind that your logo should be professional enough for your marketing campaign yet cool enough for customers to wear on T-shirts, hoodies, hats, and other merchandise.
Cannabis Brand Unique Value Propositions
The final element of your customer-value marketing strategy is your value proposition, a statement that explains why prospects should choose your brand rather than a competitor’s offerings. Ultimately, customers are motivated by receiving more value from a product than the money they pay to purchase it, meaning this value is not solely based on price but consists of a relative measurement of perceived value.
Similar to audience targeting, creating a value proposition requires understanding your minimal viable audience and what they want, so you can tailor your offering to meet their demands and solve their problems. In addition, it should review your angle in the marketplace and include hard data about benefits and costs to prove the value your brand delivers to clients.
A value proposition usually includes a worldview or mission statement and is designed to target people who share your views or mission. The way people view the world and interact with brands significantly affects how they make purchasing decisions and the stories that prompt them to act.
The knowledge people believe to be true serves as a more accurate predictor of browsing and purchasing behavior than age and economic status. The correct value proposition indicates to prospects that you can offer what they genuinely care about—consistency and integrity. Customers want to know that they will receive the same value from your brand every time they make a purchase and that your company will promptly resolve any issues that may arise.
How Most Cannabis Brands Are Lacking Clear Differentiation
Just as many cannabis brands settle for unremarkable logos, they also tend to market their products on the ambiguous claim that they provide the highest quality for customers. However, quality is subjective and depends strongly on each person’s definition, so this claim is not adequate for differentiation.
Customers will only remain loyal to a brand if they continue to receive products that they consider to be the best value unless brands find an accurate way to differentiate their offerings from others. Without a comprehensive branding and marketing plan in place, value-priced brands are forced to compete solely on price. They will inevitably find themselves in a race to the bottom to offer the cheapest products.
Should Your Cannabis Business Have a Value Brand?
Because so many value-priced cannabis brands lack clear differentiation, it can be challenging to see the potential that these brands have for helping businesses reach wider audiences and generate more sales. These brands recognize that most of today’s cannabis consumers are not the sophisticated connoisseurs that previously dominated the initial legal market looking for high-THC, small-batch cultivated, and hand-trimmed products from luxury brands.
While affluent consumers value these characteristics, many average consumers are very conscious of price and want to enjoy the benefits of cannabis without making a considerable investment. Thus, the cannabis market offers a real opportunity for cannabis companies to find exciting ways to differentiate themselves and offer affordable products while still acquiring substantial profits.
Where Cannabis Brand Marketing Is Going
The cannabis industry features several unique challenges in terms of marketing, particularly considering cannabis remains illegal on the federal level. As the laws continue to change and cannabis consumption rises, your business must take advantage of this rapidly growing market segment. By identifying your consumers and giving them what they actually want, you can increase your exposure, drive engagement, and boost sales. However, it is imperative that you differentiate your value-priced cannabis brand from other brands if you want to stay relevant in this competitive, highly saturated, and ever-evolving market.
To learn more about how you can create a value-priced brand for your cannabis business, contact Eminent SEO today. We understand this industry’s unique challenges and opportunities and have provided leading health and wellness brands with expert digital marketing strategies for decades.
Our team can help you develop and promote a brand that effectively reaches your target audience and gives them exactly what they want when purchasing cannabis products. With our help, you can establish your reputation for providing high-quality products at competitive prices and set your business up for future success.