Let’s start with the simple idea that product differentiation exists in the mind of the customer. On that basis, what would be your best course of action? Is it the market standard? Product differentiation is part of the strategic marketing process. Consider using promotions to increase value-based differentiation. What Is Product-Based Differentiation This differentiation strategy involves using the characteristics of the product you market to differentiate from your competitors. It thus appears that a differentiation strategy may not always work. Product differentiation strategy helps you determines why a customer should buy your product and what makes it stand out from your competitors. When used as part of a larger competitive strategy, differentiation can be essential in propelling a company to the next level of growth. If you include items that make using your product more convenient for your customer, you will distinguish your products from similar product offers. WEBINAR: Watch our webinar, ‘8 Trends to Track for Product Success in 2021’ WATCH NOW, NEW COURSE AVAILABLE: Digital Product Management GET STARTED, Watch our webinar on-demand to learn how to establish the right culture for your Product Management team to flourish WATCH NOW, Product differentiation strategy helps Product Managers answer these key questions “Why should a targeted customer buy my product?” and “How can I make my product stand out from the rest?”. But product differentiation refers to more than just being different. Is it very stable? Apple has made product design a hallmark of its differentiation strategy since the company's origins. 7 tips on product differentiation is … Make your products comprehensive by including necessary or complementary products as part of your product package. 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. Customers will appreciate your ability to deliver on their preferred schedule, which can increase customer loyalty. 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. 1. The physical structure, size … There are several ways to achieve product differentiation. Product Differentiation – Creating a product with better features, performance or efficacy. Location and Service. Top Competition: AT&T, Verizon Wireless. Product Differentiation Strategy. Helps in non-price competition: It allows the companies to compete in areas other than price. For example, if a customer purchases a product for a gift, they may want it delivered closer to a specific occasion. Where you want to focus your differentiation efforts depends on a lot of factors unique to your product (industry, type of service, etc), but these are some examples and common ways products approach a differentiation strategy: Design. The way you differentiate should not be an arbitrary decision or a reactive response to whatever your competitors are doing. Successful companies strive to distinguish their products from competitors through differentiation strategies. Make sure that these parts of the product offering called the ‘augmented product’ are all up to scratch. It mentions its philosophy as well as the difference between Beardbrand and similar competitors. You price the product to gain share and allow deal-making maneuvers. Every brand is built on a product (I include services here as well). I want it!” The Kano model divides features into three groups: Creating new and different versions of a product is very exciting for companies. Service Differentiation – This includes not only delivery and customer service, but all other supporting elements of a business such as training, installation, and ease of ordering. This differentiation strategy involves using the characteristics of the product you market to differentiate from your competitors. The marketing team communicates these unique qualities through their campaigns and promotions. Product differentiation is a process used in marketingthat identifies and communicates the unique value a product or brand brings to the table when compared to competitors. Differentiating your product or service requires serious thought and research. Coming up with a differentiation strategy is essential to the products and services you sell, but it’s also important for your branding and marketing efforts. 3. Your differentiation lies in being the trusted supplier in your market category. Differentiation is possible along one or more of various dimensions — product features, quality, customer service, guarantee, distribution, delivery, product customization, etc. It is a key element to market the product, create a longstanding brand, and … Sameness is the default for most companies today. According to Porter’s generic strategies, the differentiation approach involves the creation of new and unique products (or services) that create exceptional value for their customers.And, as a consequence, they are willing to pay premium prices for them. This is how you build an outstanding product that delivers real value to the people who … The marketing team communicates these unique qualities through their campaigns and promotions. This is not to be confused with a value propositionwhich communicates your overarching promise. Customers buy from you not only based on product features. Know your market. Helps in defending high prices: It helps the companies to give a reason why they charge a high price for their product. Position your products for customer convenience as a differentiation strategy. Every brand is built on a product (I include services here as well). Product Differentiation Strategy. A major aspect of a product differentiation strategy comes from product design. Your promotion efforts stress the differences between your product and your competition. No Perceived Substitute: A product differentiation strategy that focuses on the quality and design of … Coca-Cola having an 'action orientation', instead of waiting for change to happen it is at the leading edge, driving action forward. Product differentiation strategy helps Product Managers answer these key questions “Why should a targeted customer buy my product?” and “How can I make my product stand out from the rest?” The seemingly easy answer is: because my product is different from the others on the market. What is Market Research and Competitive Analysis? Differentiate your products by providing the highest customer value. 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! Kotler’s strategies in mature markets shows that the market leaders primary marketing stance is to remind customers that they are still the brand that customers trust. Differentiation is possible along one or more of various dimensions — product features, quality, customer service, guarantee, distribution, delivery, product customization, etc. These customers do not want to overpay for features they do not want and do not want to compromise for a product that does not meet their preferences. It is a key element to market the product, create a longstanding brand, and … 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 … T-Mobile. Work with your entire team to establish ways you can potentially distinguish your product from others in the market. Offer multiple shipping options that cater to customers' schedule and preferences. That’s cool! The product, price and promotion portions of the marketing mix indicate what your best options are for product differentiation. It refers to making a company’s product different from the similar products of the competitors. What types of key customer needs are not being met with existing options? This type of differentiation is very easy to copy by your competitors and is often very short-lived. Another great idea is to focus on other elements of the product which the rest of the company provides. This strategy focuses on … Learn the iterative customer-led product management methodology used by successful companies. Then create your product features and marketing around how your product solves those frustrations. Tagged on: competitive differentiation examples differentiation strategy examples excellent differentiation strategies types of product differentiation ← 6 Ways Whole Foods Market Makes Social Media the Difference Ok, you can make notes on a laptop if you must. Here are a few strategic tools to help you focus on finding your product differentiation strategy. Product Differentiation •A business level strategy intended to: -increase the perceived value of the firm's products Savvy consumers research their purchases and know what components and features they want prior to making a purchase. Differentiation Strategy is the strategy that lays emphasis on offering a superior product, on some dimension (s), compared to what competitors are providing. Features which provide more – or less performance. Product differentiation is a marketing strategy whereby businesses attempt to make their product unique to stand out from competitors. 4. In business, competition is hard. And, as a consequence, they are willing to pay premium prices for them. A product can be differentiated based on the form of the product. Allow customers to tailor your products to their desires. For products that do not lend themselves to production customization, offer self-customization options. Differentiation Strategy is the strategy that lays emphasis on offering a superior product, on some dimension(s), compared to what competitors are providing. The main objective of implementing a differentiation strategy is to increase competitive advantage. But so do your competitors’ products. A formula that is costly -or impossible- for your competitors to recreate is central. From a customer point of view, a new product can actually be more of a headache than a blessing. It resonates with a certain group of people who then become devoted custome… Creates Value: Product differentiation gives a reason to the customers to choose the brand over others. Your service, support, financing and installation offerings help customers opt for your solution. However these tools may miss categories of product differentiation that are easier, cheaper and longer-lasting. Product differentiation strategy in a re-segmented (low-end or niche) market . Use buy-one, get-one free offers, free add-on products, increased size offers and immediate-use coupons. For smaller, local companies that are trying to stand out from national brands, … Where you want to focus your differentiation efforts depends on a lot of factors unique to your product (industry, type of service, etc), but these are some examples and common ways products approach a differentiation strategy: Design. Copyright 2021 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Products that display a different visual style, include different features or handle different tasks stand out from those offered by the competition. Position your products for customer convenience as a differentiation strategy. When a company efficiently differentiates its products, and few essential products stand out, it usually brings out brand loyalty on the consumer’s part. A differentiation strategy is the efforts to make a product, brand, or service unique as compared to all other competitors, hence providing a competitive advantage (Pearce & Robinson, 2011, p. 219). Then create your product features and marketing around how your product solves those frustrations. Product differentiation strategy in a re-segmented (low-end or niche) market . Here’s a few steps to get you headed in the right direction. 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