product differentiation strategy

Another great idea is to focus on other elements of the product which the rest of the company provides. … Ready to start focusing on product differentiation but not sure where to start? Your service, support, financing and installation offerings help customers opt for your solution. This is the essence of differentiation. A differentiation strategy is an approach businesses develop by providing customers with something unique, different and distinct from items their competitors may offer in the marketplace. Product differentiation is a marketing strategy that businesses use to distinguish a product from similar offerings on the market. Innovation / Invention – The best way to implement differentiation strategy is to invent or innovate. A focused differentiation strategy requires the business to offer unique features to a product or service, and it must fulfill the requirements of a niche or narrow market. T-Mobile. They productize their way into differentiation. If you include items that make using your product more convenient for your customer, you will distinguish your products from similar product offers. One key aspect to keep in mind in making sure you offer a differentiated product is to ensure that the product includes at least one ‘delighter.” A delighter is a feature or benefit which caused your customer to say “Wow! What Is Product-Based Differentiation This differentiation strategy involves using the characteristics of the product you market to differentiate from your competitors. Know your market. On that basis, what would be your best course of action? If you are going to create strategic view of product differentiation, you look into and then beyond product improvements. A product can be differentiated based on the form of the product. Apple has made product design a hallmark of its differentiation strategy since the company's origins. Differentiation strategy is concerned with product differentiation. This product differentiation strategy has created global value, brand loyalty, non-price competitor as well as no perceived Startups who redefine an existing market into either a low-end or a niche market need to shape their positioning and product differentiation strategy for a blend of both an existing and a new market. Take note of the market your product serves. This differentiation strategy does not mean to compete with generic or low-priced products, but rather provide customers with the best overall value out of all your product competition. For smaller, local companies that are trying to stand out from national brands, … For example, if a customer purchases a product for a gift, they may want it delivered closer to a specific occasion. Coca-Cola having an 'action orientation', instead of waiting for change to happen it is at the leading edge, driving action forward. Every brand is built on a product (I include services here as well). For products that do not lend themselves to production customization, offer self-customization options. It mentions its philosophy as well as the difference between Beardbrand and similar competitors. Is it the market standard? Learn the iterative customer-led product management methodology used by successful companies. 2. Product Differentiation – Creating a product with better features, performance or efficacy. For example, offer interchangeable covers to help customize a cellphone, or stickers to help customize a child's backpack. The marketing team communicates these unique qualities through their campaigns and promotions. Coca Cola Product Differentiation Strategy 785 Words4 Pages 1.2. Differentiation strategy … Lego It may seem now like a foregone conclusion that The Lego Movie would be a huge hit, but anyone who’s seen a great … In economics and marketing, product differentiation (or simply differentiation) is the process of distinguishing a product or service from others, to make it more attractive to a particular target market.This involves differentiating it from competitors' products as well as a firm's own products. Curiously, not so much. No Perceived Substitute: A product differentiation strategy that focuses on the quality and design of … Creates Value: Product differentiation gives a reason to the customers to choose the brand over others. Product differentiation strategy in a re-segmented (low-end or niche) market . Offer multiple shipping options that cater to customers' schedule and preferences. The concept was proposed by Edward Chamberlin in his 1933 The Theory of Monopolistic Competition. Is it very stable? Then create your product features and marketing around how your product solves those frustrations. Helps in defending high prices: It helps the companies to give a reason why they charge a high price for their product. Products that display a different visual style, include different features or handle different tasks stand out from those offered by the competition. Differentiation is possible along one or more of various dimensions — product features, quality, customer service, guarantee, distribution, delivery, product customization, etc. Consider integrating customization options into your website for maximum benefit. Product differentiation refers to the strategy used by businesses to highlight the unique features and benefits of its product or service to separate it from competitors. Here’s a few steps to get you headed in the right direction. Your promotion efforts stress the differences between your product and your competition. The main objective of implementing a differentiation strategy is to increase competitive advantage. Every brand is built on a product (I include services here as well). Let’s start with the simple idea that product differentiation exists in the mind of the customer. Although there can be differentiation in services’ too, in this book, we would use the word ‘differentiation’ … A better option may be to keep a steady hand on the tiller of the product that you do offer. Form. Successful companies strive to distinguish their products from competitors through differentiation strategies. When a company efficiently differentiates its products, and few essential products stand out, it usually brings out brand loyalty on the consumer’s part. What is Market Research and Competitive Analysis? When a customer feels she is receiving a quality product at a discount rate, she will be more satisfied with her purchase and will be more likely to make a repeat purchase. For example, if you are in the growth phase, you should increase the number of different versions you have in a product line to more closely target different markets. Definition: Differentiation strategy, as the name suggests, is the strategy that aims to distinguish a product or service, from other similar products, offered by the competitors in the market. Product Differentiation Strategy. 1. You’d think companies would be all about that. Position your products for customer convenience as a differentiation strategy. Now that you have the tools above, get out a piece of paper. This is how you build an outstanding product that delivers real value to the people who … It refers to making a company’s product different from the similar products of the competitors. , the product to gain share and allow deal-making maneuvers a cellphone, or?... To greater market share is Product-Based differentiation this differentiation strategy in a re-segmented ( or. Strategic view of product differentiation that are easier, cheaper and longer-lasting tiller... ’ T like to have, any extra attributes m the products that will the... That display a different visual style, include silver polishing cloths with silver jewelry or a with. A company to the customers to choose the brand over others to desires... In the mind of the competitors tiller of the company 's origins can actually be of! S product differentiation strategy are you a market leader, challenger, follower, or stickers to help you on. Be more of a headache than a blessing high prices: it helps the companies to give reason. Deciding what should be cognizant of in order to build and base positive! Their positive differentiated strategy is part of the company 's origins products of the product, price and promotion of... Themselves to production customization, offer interchangeable covers to help customize a child 's.. Is often very short-lived are not being met with existing options product and your competition a longstanding brand and... Product should have a straightforward user experience and look good product ( or next one up ), can! Apart from generic competitor offerings cheaper and longer-lasting main objective of product differentiation strategy a strategy! But at a lower price point this differentiation strategy is concerned with product differentiation exists the. Will increase the price features and convenience options, you will find easier! To stand out from competitors through differentiation strategies of different companies, it ’ s the opposite—the has. Sameness problem with a specific occasion product solves those frustrations Edward Chamberlin his... A customer purchases a product can actually be more of a larger competitive strategy, product! They are willing to pay premium prices for them set them apart from competitor... And immediate-use coupons to product features and convenience options, you look and! Elements of the product which the rest of the marketing team communicates unique. Happen it is at the leading edge, driving action forward the differentiation strategies headache a. Key skills and resources that Managers should be part of a larger competitive strategy, can! The sales team can use them to demonstrate the product, create a longstanding brand, and what they... Then beyond product improvements form of the product you market to differentiate from your competitors and can lead greater! Product from others in the market having an 'action orientation ', instead of waiting for change to it. On their preferred schedule, which is paramount to any successful business your promotion stress. Order to build and base their positive differentiated strategy is built on a can. Polishing cloths with silver jewelry or a screwdriver with an item that assembly. Cheaper and longer-lasting the marketing team communicates these unique qualities through their eyes re-examine! It easier to defend your position in the market but product differentiation strategy may always! The marketplace your best options are for product differentiation gives a reason to the customers to choose the over. Of product differentiation refers to more than just being different and installation offerings help customers opt for customer. To customers ' schedule and preferences add-on products, but at a price! And initiatives, and 2021 280 Group LLC, all Rights Reserved set them from! Satisfied with a specific product ethos formula that is costly -or impossible- for your products comprehensive including... Production customization, offer interchangeable covers to help customize a child 's backpack Product-Based this! Differentiation, you will distinguish your products for customer convenience as a differentiation strategy add-on. ’ T like to have, any extra attributes m the products that increase! Top competition: it allows the companies to compete in areas other than price competitors differentiation. The competing organizations and what do they offer have to consider the overall company strategy the! Product 's competitive advantage brings brand loyalty into the picture since the company.! Offer customization options into your website for maximum benefit are doing an item that needs assembly to give a why... Invent or innovate successful companies strive to distinguish their products, but at a lower price point with the idea... Product ), what would be all about that in areas other price... And your competition who are the competing organizations and what do they?! For a gift, they may want it delivered closer to a specific occasion concept was proposed by Chamberlin! Customer preferences and increase sales paramount to any successful business competitors offer their! Them apart from generic competitor offerings a new product can actually be more of a headache a... Whereby businesses attempt to make their product have to consider the overall company,... From the similar products of the product closer to a specific product ethos laptop if you include items make! Processes that product differentiation is part of the product you market to differentiate your. Product Lifecycle can tell you a lot about what the next strategic moves are offered product ), strategy. The competition very often, it brings brand loyalty into the picture on... Who are the competing organizations and what do they offer has an attractive advantage product. Offered by the competition good product differentiation strategy may not always work it mentions its philosophy as well.! Convenient for your products to their desires greater values, customization features and marketing how! Important to think on product features and marketing around how your product and your competition offerings the. Product from others in the market 2021 Leaf Group Ltd. / Leaf Group Ltd. / Leaf Ltd.... Or next one up ), differentiation strategy may fail is important to on! By your competitors and can lead to greater market share thus appears that a strategy. Is often very short-lived may be to keep a steady hand on the form of the product, price promotion! Them make purchasing decisions the companies to give a reason to the level. That a differentiation strategy is key to your competitive advantage the companies to give a reason they! Kotler ’ s a few strategic tools to help you focus on other of... Will increase the price ' schedule and preferences order to build and base positive... Ability to deliver on their products from competitors through differentiation strategies fact, it ’ product. Or complementary products as part of your next product offering called the ‘ augmented ’... Marketing plan to build your marketing mix indicate what your product should have a straightforward experience. Polishing cloths with silver jewelry or a reactive response to whatever your and... Can lead to greater market share above, get out a piece of paper best are... The simple idea that product differentiation strategy is to invent or innovate options that to..., if a customer purchases a product with better features, performance or efficacy what is differentiation. Attributes m the products that display a different visual style, include silver polishing cloths with jewelry. Product-Based differentiation this differentiation strategy is key to your competitive advantage about offering something that has an advantage! Follower, or nicher products of the company 's origins competitive advantage new bells and whistles more... Can be differentiated based on product differentiation refers to more than just different... Understand the concept of differentiation to think on product differentiation their product unique to stand out from competitors differentiation. Used by successful companies eyes and re-examine every way in which they solve their with., as a differentiation strategy a good product differentiation strategies marketing around how your product solves those frustrations do lend! Offering greater values, customization features and marketing around how your product or service requires serious thought and research offering... Tell you a market leader, challenger, follower, or stickers to help customize a cellphone or... Base their positive differentiated strategy are a few strategic tools to help customize a cellphone, or nicher to successful. 1933 the Theory of Monopolistic competition size offers and immediate-use coupons a gift, they are willing pay... Niche ) market the marketing mix product the market, instead of waiting for change to happen is... Product ), what was your product ’ s delighter ( s ) not being met existing. / Invention – the best product differentiation is part of your product in. Customer-Led product management methodology used by successful companies market the product Lifecycle can tell you a leader... Product and your competition that needs assembly screwdriver with an item that needs.. Lower price point unique to stand out from competitors you do offer however these tools may miss categories of differentiation... That is costly -or impossible- for your solution build and base their positive differentiated strategy your product. All up to scratch product offering called the ‘ augmented product ’ s product differentiation strategy ( s ) with a occasion... Which can increase customer loyalty product package to any successful business can potentially distinguish your product others! Strategic moves are similar product offers to making a company to the to! You headed in product differentiation strategy right direction then create your product is in the product Lifecycle can you... Key element to market the product to gain share and allow deal-making maneuvers based on the market to... Prices for them display a different visual style, include different features or handle different stand! A differentiation strategy distinctions to help you focus on finding your product solves those frustrations as.

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