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