Product differentiation is the process of distinguishing a product or service from similar offerings in the market. Companies often use product differentiation as a way to make their offering more attractive to customers and to differentiate themselves from competitors.
There are several ways that companies can differentiate their products, including:
- Features: Companies can differentiate their products by offering unique or innovative features that are not available on competing products. For example, a smartphone manufacturer may differentiate its product by offering a larger screen, a longer battery life, or a more advanced camera system.
- Quality: Companies can differentiate their products by offering higher quality materials or construction, which can be perceived as more valuable by customers. For example, a furniture manufacturer may differentiate its products by using higher quality woods and finishes.
- Brand: Companies can differentiate their products by developing a strong brand identity and building customer loyalty. For example, a fashion company may differentiate its products by cultivating a strong brand image that is associated with luxury and exclusivity.
- Service: Companies can differentiate their products by offering exceptional customer service, which can be a key factor in attracting and retaining customers. For example, a retailer may differentiate its products by offering free shipping or a convenient return policy.
How loyalty cards influence what we buy
16th April 2023
Imperfect Competition - Key Concept Pairs
Product Differentiation at Rosa Brothers Milk Company
25th May 2016
Nurofen - product differentiation or price discrimination?
14th December 2015
Tobacco firms launch a legal challenge against plain packaging
10th December 2015
Fermenting Nicely - The Rise of Microbreweries
31st August 2015