The differentiation can be about colors, packaging, shapes, flavors, etc. When a company efficiently differentiates its products, and a few essential products stand out, it usually brings out brand loyalty on the consumer’s part. Product differentiation is economically advantageous to a company. Marketing is intended to help convey to target customers your brand and your product's unique value proposition. © 2019 www.azcentral.com. Product differentiation means that your product has one or more distinct attributes that separate it from competitors. The differentiation enables a company to achieve a competitive advantageCompetitive AdvantageA competitive advantage is an attribute that enables a company to outperform its competitors. approach in which a firm purposes to establish and market an exclusive product for various consumer segments A concern with a product differentiation strategy is the investment you typically have to make to produce or acquire a top-notch product. The consumer believes that the company’s other products are as good and stand out just as much as the ones they use. Kokemuller has additional professional experience in marketing, retail and small business. Neil Kokemuller has been an active business, finance and education writer and content media website developer since 2007. The product differentiation process may be as simple as redesigning of packaging to introducing a brand new functional feature in a product. He has been a college marketing professor since 2004. What Does a Low Gross Profit Percentage Mean? To be effective, cost leadership must be carefully managed to generate the profits that are possible. What Leads to High Customer Satisfaction? Apple, which differentiates with its mobile technology and digital music devices, has overcome these challenges by emphasizing cutting-edge technology and innovative leadership as a unifying background theme for all of its products. Additionally, by going for product differentiation rather than a low cost, you effectively eliminate budget-conscious buyers who can't afford your higher prices. Differentiated marketing could lead to such fragmented messages that you never convey a clear brand image. What Internal & External Factors Affect Market ... What Internal & External Factors Affect Market Segmentation? With a product differentiation strategy, though, explaining and demonstrating why your brand is the best option and value is key. If you do lower your prices to attract cash-strapped buyers, you run the risk of creating a price orientation and devaluing your product over time. Product differentiation means that your product has one or more distinct attributes that separate it from competitors. The Disadvantages of Differentiated Marketing. It helped the company stand out significantly in the market. In essence, if you get too fine in your targeting, you create multiple products to satisfy the marketplace when fewer products would do the trick.
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