product differentiation is fundamentally a marketing strategy to encourage the consumer to choose one brand or product over another in a crowded field of competitors. sometimes, differentiation marketing does not require any changes to the product but a new advertising campaign or other promotions. below are a few of the most common strategies employed to differentiate a product or service. an example of vertical differentiation is when customers rank products based on a measurable factor, such as price or quality, and then choose the most highly ranked item.
if a product is perceived to be better in some way than its competitors, consumers will consider it worth the higher price. an example of product differentiation is when a company emphasizes a characteristic of a new product to market that sets it apart from others already on the market. how can the product be engineered in a unique way? product differentiation is important because it allows different brands or companies to gain a competitive advantage in the market. product differentiation is a way for products and brands to command market share based on consumer preferences.
in fact, a company has the opportunity to differentiate itself at every point where it comes in contact with its customers—from the moment customers realize that they need a product or service to the time when they no longer want it and decide to dispose of it. your company can create a powerful source of differentiation if it can make consumers aware of a need in a way that is unique and subtle. when a caller expresses an interest in buying a computer system, a company representative asks a set of questions to narrow down the possibilities to a few good candidates. can a company differentiate itself by making the process of ordering and purchasing more convenient? packages can be picked up at the warehouse, transferred to airborne, and shipped to the customer in a matter of hours. a side benefit for the company is that its approach also has decreased the incidence of fraud by reducing the opportunity to file false claims and inflate repair bills. sculley’s team created a distinct—if temporary—advantage for pepsi in the early 1970s by designing plastic bottles that were lighter, and thus easier for customers to carry, than the heavy glass bottles of the time.
with few exceptions, the railroads that are the customers for ge’s locomotives are not all that attached to a particular unit. canon offers an interesting example of how a company can differentiate itself at this step in the chain. that’s not a problem; the goal is to assemble an inventory of possible points of differentiation. what quickly became evident to blyth was that the concerns and behavior patterns of its customers were likely to be different in each location. blyth found that the question when uncovered a wealth of opportunities for differentiation. because there are many holidays and other occasions when families get together in the dining room, you can begin to get a sense of the opportunities available for differentiation. (see the exhibit “is there a way to differentiate selling gas?”) understanding the customer’s experience at any link in the chain for any product offers companies the opportunity to identify and explore many nontraditional ways to create value. an important benefit of the process we’ve outlined above is that it unlocks the creativity in an organization so that the insights of particular individuals can contribute to a shared understanding of the customer—so that the company, in effect, knows its customers almost better than they know themselves.
product differentiation is the process of identifying and communicating the unique qualities of a brand compared to its competitors. most profitable strategies are built on differentiation: offering customers something they value that competitors don’t have. but most companies, in seeking a differentiation strategy is an approach businesses develop by providing customers with something unique, different and distinct from items, differentiation in business examples, differentiation in business examples, importance of differentiation in business, what is differentiation strategy with examples, differentiation strategy.
essentially, differentiation in business refers to the principle of setting your company apart from the competition through a specific element, such as your distribution network or price-point. it provides a superior level of value to your customers and helps your company to distinguish itself in the marketplace. successfully competing on price requires recognition that every customer has a different price they would be willing to pay for your product. by differentiating your products, you can find your customers, create the products they want, show them what makes you unique, and ultimately grow your business a business needs to look at its unique selling points compared to competitors. if it doesn’t have any, the business will probably struggle, application of differentiation in business, product differentiation examples. what businesses use differentiation? why differentiation is important in business? what are differentiation examples?
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