Product Differentiation As A Marketing Strategy
Product differentiation is a marketing strategy used by a company to distinguish its product from that of the competitors who are offering a similar product in the market. In a market which is flooded with goods and substitutes,customers long for distinct features in the product in order to help them decide what to buy. By providing them greater value, features that can be customized, and convenience options, the company may attract potential customers.
The differentiation may be actual or the product positioning may be such that it creates a higher perceived value for the product as compared to that of the competitors having a similar product. In order to increase or retain their market share, companies can differentiate their product from that of the competition in the following ways:
1. The form or shape of the product may be different from the competitors
For example, in a market flooded with round or rectangular candies, the company may make the candy in an oval shape and also with a striking color or the company can keep the shape round but with a hole in between to catch the fancy of the customers who may be mainly, kids.
2. The product can be differentiated based on the features
For two products having the same end use, the features can be different. So the company can highlight its features by pointing out the advantages of its different features. For example, taps serve the same purpose of allowing water to flow but the external features of a certain tap may be more smooth and rounded and the mechanism of opening and closing the tap requiring less or no effort.
3. A company can differentiate its product on the basis of its performance
For example, two bikes in the same price segment can behave differently in terms of their performance. One of the bikes may consume lesser fuel and hence offer better mileage. Similarly, the other bike may give lesser mileage but have more stylish outer features. Based on these differences, the company can play on the advantages through their advertisement and publicity.
4. A product may have an upper hand over its competitors by way of better durability
This attribute can be highlighted by the company to differentiate its product.
5.The company can include something extra (complementary) in the product package
This is to make the use of the product easier thus getting a competitive advantage. For example, the company may give a shoe shiner free with shoes or a company making incense sticks may offer a incense stick holder free with a certain no. of packets purchased.
6. Products may also be differentiated through offering better value
This is done by offering features that similarly priced products offer, but at a lesser price. Better value may be created either by offering the same features at a lesser price or by offering additional features at the same price.
7. Products may be further differentiated by way of the after-sales service the company offers to the customer.
Price being the same, a product can win over competition by giving much better after-sales service to its customers as compared to the competition.
A successful product differentiation strategy creates brand loyalty that has to be maintained by the company by keeping the quality same or better. In today’s highly competitive environment, even a small drop in quality sends the customer looking for your competitor.