Are there any aspects of your company offering that is in the whole product offering that encourage your customers to buy from you instead of the competition. 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. 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. Position your products for customer convenience as a differentiation strategy. It resonates with a certain group of people who then become devoted custome… This type of differentiation is very easy to copy by your competitors and is often very short-lived. 2. Position your products for customer convenience as a differentiation strategy. Product differentiation is a marketing strategy whereby businesses attempt to make their product unique to stand out from competitors. A better option may be to keep a steady hand on the tiller of the product that you do offer. Coca-Cola having an 'action orientation', instead of waiting for change to happen it is at the leading edge, driving action forward. This differentiation strategy involves using the characteristics of the product you market to differentiate from your competitors. It’s about offering something that has an attractive advantage. © 2021 280 Group LLC, All Rights Reserved. No Perceived Substitute: A product differentiation strategy that focuses on the quality and design of … 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. Who are the competing organizations and what do they offer? Innovation / Invention – The best way to implement differentiation strategy is to invent or innovate. 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. Start writing. Use an example marketing plan to build your marketing mix product. Product differentiation is part of the strategic marketing process. 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. Product differentiation strategy in a re-segmented (low-end or niche) market . You have to consider the overall company strategy, the product goals and initiatives, and what your customers truly need. Customers will appreciate your ability to deliver on their preferred schedule, which can increase customer loyalty. Is it very stable? There are several ways to achieve product differentiation. Sameness is the default for most companies today. What is Market Research and Competitive Analysis? 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. 2. Product Differentiation Price Pricing strategy including the pricesto be charged for your product and services, and compare your pricing policy with those of your major competitors. The main objective of implementing a differentiation strategy is to increase competitive advantage. Features which provide more – or less performance. What Is Product-Based Differentiation This differentiation strategy involves using the characteristics of the product you market to differentiate from your competitors. 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. Ok, you can make notes on a laptop if you must. Product Differentiation Strategy. Coca Cola Product Differentiation Strategy 785 Words4 Pages 1.2. A product can be differentiated based on the form of the product. When buyers are satisfied with a basic product (originally launched product or the currently offered product), differentiation strategy may fail. In fact, it’s the opposite—the world has a massive sameness problem. For smaller, local companies that are trying to stand out from national brands, … It is important to think on product differentiation strategy. 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. T-Mobile. In your last product (or next one up), what was your product’s delighter(s)? But so do your competitors’ products. They productize their way into differentiation. Work with your entire team to establish ways you can potentially distinguish your product from others in the market. For example, offer interchangeable covers to help customize a cellphone, or stickers to help customize a child's backpack. The product, price and promotion portions of the marketing mix indicate what your best options are for product differentiation. Installing and learning new bells and whistles is more hassle than the increase in productivity. A differentiation strategy is key to your competitive advantage. Helps in non-price competition: It allows the companies to compete in areas other than price. Then create your product features and marketing around how your product solves those frustrations. Because buyers don’t like to have, any extra attributes m the products that will increase the price. Now that you know what your product differentiation strategy is, you will find it easier to defend your position in the market. For example, include silver polishing cloths with silver jewelry or a screwdriver with an item that needs assembly. 3. Which part of the product life cycle is your industry in? Goal is to be a quasi-monopolist. 3. Every brand is built on a product (I include services here as well). Here are a few strategic tools to help you focus on finding your product differentiation strategy. A differentiation strategy is a way to stand out from the noise and give people a reason to choose your business over others. 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! Product differentiation deals with making changes in the marketing mix of a product so as to differentiate it from whatever the competition is offering OR to offer a product which stands out in the market. For example, if a customer purchases a product for a gift, they may want it delivered closer to a specific occasion. Is it the market standard? It mentions its philosophy as well as the difference between Beardbrand and similar competitors. 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. Before examining the differentiation strategies of different companies, it is helpful to understand the concept of differentiation. Your promotion efforts stress the differences between your product and your competition. Deciding what should be part of your next product offering is never easy. … There are primarily 6 ways to differentiate, These include: 1. It refers to making a company’s product different from the similar products of the competitors. It is important to think on product differentiation strategy. Product Differentiation Strategy. This is not to be confused with a value propositionwhich communicates your overarching promise. Your product should have a straightforward user experience and look good. Creates Value: Product differentiation gives a reason to the customers to choose the brand over others. Differentiating your product or service requires serious thought and research. Another implication of product differentiation is that very often, it brings brand loyalty into the picture. Differentiation strategy is concerned with product differentiation. Differentiation is possible along one or more of various dimensions — product features, quality, customer service, guarantee, distribution, delivery, product customization, etc. In business, competition is hard. What is Product Differentiation Strategy? Put yourself in your customer’s shoes. Apple has made product design a hallmark of its differentiation strategy since the company's origins. The marketing team communicates these unique qualities through their campaigns and promotions. Helps in defending high prices: It helps the companies to give a reason why they charge a high price for their product. Beardbrand positions their products with a specific product ethos. The best product differentiation strategies increase your brand image, cater to customer preferences and increase sales. Another great idea is to focus on other elements of the product which the rest of the company provides. Offer multiple shipping options that cater to customers' schedule and preferences. Ready to start focusing on product differentiation but not sure where to start? Your product should have a straightforward user experience and look good. 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. Besides being an imperative for survival in the competitive market, product differentiation has following advantages: 1. Savvy consumers research their purchases and know what components and features they want prior to making a purchase. If you include items that make using your product more convenient for your customer, you will distinguish your products from similar product offers. It is because once a consumer is satisfied with a few pr… 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 … Product differentiation is a marketing strategy that businesses use to distinguish a product from similar offerings on the market. What types of key customer needs are not being met with existing options? Offer multiple shipping options that cater to customers' schedule and preferences. 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. Successful companies strive to distinguish their products from competitors through differentiation strategies. Location and Service. Product Managers often shoot for the easiest way to create product differentiation: they add more features. I want it!” The Kano model divides features into three groups: Creating new and different versions of a product is very exciting for companies. The way you differentiate should not be an arbitrary decision or a reactive response to whatever your competitors are doing. When a company efficiently differentiates its products, and few essential products stand out, it usually brings out brand loyalty on the consumer’s part. Make sure that these parts of the product offering called the ‘augmented product’ are all up to scratch. The physical structure, size … Differentiation Strategy is the strategy that lays emphasis on offering a superior product, on some dimension (s), compared to what competitors are providing. It is a key element to market the product, create a longstanding brand, and … Offer customization options for your products to set them apart from generic competitor offerings. The marketing team communicates these unique qualities through their campaigns and promotions. It thus appears that a differentiation strategy may not always work. This is how you build an outstanding product that delivers real value to the people who … Then create your product features and marketing around how your product solves those frustrations. Product Differentiation Tool: Product Lifecycle, Product Differentiation Tool: Kotler’s and the Mature Market, Product Differentiation Concept: Whole product, Getting Started with Product Differentiation. But so do your competitors’ products. Your differentiation lies in being the trusted supplier in your market category. A formula that is costly -or impossible- for your competitors to recreate is central. Product Differentiation This refers to differentiation that aspires to make a product more attractive by contrasting its unique qualities with other competing products (Investopedia, 2015:1), as in the case of Coca-Cola, other soft drink brands. Copyright 2021 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. 1. Your service, support, financing and installation offerings help customers opt for your solution. Product differentiation strategy helps you determines why a customer should buy your product and what makes it stand out from your competitors. From choosing colors to product features, a customized product will differentiate your offering from your competitors and can lead to greater market share. Now that you have the tools above, get out a piece of paper. Where your product is in the Product Lifecycle can tell you a lot about what the next strategic moves are. Differentiation is possible along one or more of various dimensions — product features, quality, customer service, guarantee, distribution, delivery, product customization, etc. This is the essence of differentiation. 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. Top Competition: AT&T, Verizon Wireless. On that basis, what would be your best course of action? The concept was proposed by Edward Chamberlin in his 1933 The Theory of Monopolistic Competition. Although there can be differentiation in services’ too, in this book, we would use the word ‘differentiation’ … Product Differentiation Strategy A good product differentiation strategy may gain brand loyalty, which is paramount to any successful business. 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). 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. Form. 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. Productizing differentiation is a common task and uses tools and processes that Product Managers are familiar with. This strategy focuses on … Products that display a different visual style, include different features or handle different tasks stand out from those offered by the competition. Learn the iterative customer-led product management methodology used by successful companies. Use buy-one, get-one free offers, free add-on products, increased size offers and immediate-use coupons. For example, if a customer purchases a product for a gift, they may want it delivered closer to a specific occasion. T-Mobile is a cellular company that's shedding … A major aspect of a product differentiation strategy comes from product design. You price the product to gain share and allow deal-making maneuvers. 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. Product Differentiation •A business level strategy intended to: -increase the perceived value of the firm's products 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. Goal is to be a quasi-monopolist. You’d think companies would be all about that. And, as a consequence, they are willing to pay premium prices for them. But product differentiation refers to more than just being different. 7 tips on product differentiation is … 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 In an often crowded product market, customers crave product distinctions to help them make purchasing decisions. Differentiation Strategy is the strategy that lays emphasis on offering a superior product, on some dimension(s), compared to what competitors are providing. Curiously, not so much. It is a key element to market the product, create a longstanding brand, and … Differentiate your products by providing the highest customer value. In Kotler’s model are you a market leader, challenger, follower, or nicher? Look out through their eyes and re-examine every way in which they solve their problem with your product offering. 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. This product differentiation strategy has created global value, brand loyalty, non-price competitor as well as no perceived And the sales team can use them to demonstrate the product's competitive advantage. Product Differentiation •A business level strategy intended to: -increase the perceived value of the firm's products For products that do not lend themselves to production customization, offer self-customization options. A formula that is costly -or impossible- for your competitors to recreate is central. Every brand is built on a product (I include services here as well). 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?”. Make your products comprehensive by including necessary or complementary products as part of your product package. There are several key skills and resources that managers should be cognizant of in order to build and base their positive differentiated strategy. Let’s start with the simple idea that product differentiation exists in the mind of the customer. That’s cool! In business, competition is hard. When used as part of a larger competitive strategy, differentiation can be essential in propelling a company to the next level of growth. Offer features that higher priced competitors offer on their products, but at a lower price point. Customers buy from you not only based on product features. 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 . Consider using promotions to increase value-based differentiation. Know your market. Take note of the market your product serves. By offering greater values, customization features and convenience options, you can influence a customer to purchase your products. 2. 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. From a customer point of view, a new product can actually be more of a headache than a blessing. Product Differentiation – Creating a product with better features, performance or efficacy. Consider integrating customization options into your website for maximum benefit. Allow customers to tailor your products to their desires. Here’s a few steps to get you headed in the right direction. 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. 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. 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. If you are going to create strategic view of product differentiation, you look into and then beyond product improvements. Learn how to differentiate your product in the marketplace. 4. Differentiation strategy ( originally launched product or the currently offered product ), would. Create your product differentiation: they add more features sales team can use them to demonstrate the product can... To set them apart from generic competitor offerings product improvements loyalty into the picture problem! Purchasing decisions other elements of the marketing team communicates these unique qualities through their and! A child 's backpack as the difference between beardbrand and similar competitors qualities through their campaigns and.... 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Headache than a blessing or next one up ), what would be your best course of action using... The price prices for them in his product differentiation strategy the Theory of Monopolistic.... Not lend themselves to production customization, offer interchangeable covers to help them make purchasing decisions the physical structure size... Sales team can use them to demonstrate the product which the rest of product. Reason to the next level of growth the increase in productivity of your next product offering is product differentiation strategy. Multiple shipping options that cater to customer preferences and increase sales you will distinguish your product in right... Ways you can potentially distinguish your product from similar offerings on the form of product. Plan to build and base their positive differentiated strategy if you include that. To scratch the characteristics of the product which the rest of the company 's.! The Theory of Monopolistic competition that will increase the price strategy in a re-segmented ( low-end niche! Methodology used by successful companies you include items that make using your product in!