What Is Product Differentiation MKT Chap13

What Is Product Differentiation?
Product differentiation (or just differentiation) is a marketing process of

differentiating an offering (product or service) from others in the market, to
make it more appealing to the target audience.
It involves defining the offering’s unique position in the market by explaining

the unique benefit it provides to the target group. This may also be referred to
pinpointing a unique selling proposition of the product to make it stand out
from the crowd.
Why Is Product Differentiation Important?
The increased competition has divided the demand among different players in
the market. This has made it very important for businesses to make their
customers understand what different they have to offer.
Besides making the product survive in the market, product differentiation is

important for the following reasons:
 Product differentiation translates the product attributes into benefits.
 It answers the biggest question of the customers – ‘What’s in for me?’.
 It gives the customers a reason to purchase the brand’s product and
repeat the purchase.
 It increases the recall value of the product.
 It increases brand loyalty and builds brand equity.
 Attribute-based differentiation is important for the brand to defend their
price from levelling down to the bottom part of the price spectrum
Form - A product can be differentiated based on the form of the

product. The physical structure, size and shape of the product can be used
to differentiate it from others. Take an example of any medicine. A
medicine can be differentiated from that of its competition by the means of
its potency, its usability, the way it can be taken (intravenous or oral) so on
and so forth. Thus the way the product is made can be a type of product
differentiation.
2) Features
Any additional features being offered on top of the product becomes a plus
point for the customer. The best example for differentiation based on
features is Mobile phones, handsets or any technology product. They are
differentiated mainly by the number of customizations or the additional
features that they offer. Thus features can be a form of Product
differentiation.
Related: What is Supplier Evaluation?
3) Performance quality
Why is a BMW costlier than other cars? Because it has
superior performance. Why is a formula 1 racing car costlier than a BMW?
Because an F1 car has an even higher performance as compared to a
BMW. Thus performance increases price. Similarly, your competition can
present a product which does not perform as well but is available at half the
price. Naturally, some of your customers might shift to the competition. This
is not true for all customers. Some customers will be looking out for the
superior quality products only. Thus you can do product differentiation on
the basis of the performance of your product.
4) Durability
In the tough and competitive laptop market, there are some laptops which
stand out. These are the ones made for mountaineers and
harsh environment researcher. Their cost is very high as compared to
normal laptops. But by producing such a product, they have completely
differentiated themselves from the market. Kitchen equipment’s, vehicles,
sometimes even the shoes you wear, people want things which are durable
and can be used for a long term.
5) Reliability
Do you know why a Volvo sells in the market? The name of Volvo is almost
synonymous with safety. Volvo manufactures the most safe and reliable
vehicles in the world. That is why their buses are so famous. Therefore it is
not surprising that Volvo also sells at a premium. This is because, here the
product differentiation is on the basis of Reliability, one of the most valued
assets a brand can have.
6) Style
Harley Davidson. Gucci. Tommy hilfiger. Lamborghini. Ferrari. Longines.
Omega. when i take these names, you know what quality i am talking of.
Each brand has a style of its own and that is why each brand has a
differentiation of its own. You will never find a Harley davidson guy wearing
a tommy hilfiger. Its not that they aren’t rich. Its just that the two brands
don’t go together in style. This is where these brands are able to achieve
product differentiation.
7) Service
In all the above examples i have been talking of tangible products. But what
about the intangible ones. Well even the services need to be differentiated.
This is mainly done by the use of People, physical evidence and the
processes used in a service organization. For more knowledge on these,
read my article on service marketing mix. The bottom line is this – have the
right people with the right ambiance and the right kind of service and you
are sure to do well and differentiate yourself from the crowd.
Related: What is Just in time Manufacturing? Elements Involved
Thus overall there are several ways you can differentiate a product. Based
on this differentiation, a suitable strategy can be followed. Market
penetration, Market skimming and other such marketing strategies are
derived only after product differentiation is achieved.

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What Is Product Differentiation?

Product differentiation (or just differentiation) is a marketing process of

It involves defining the offering’s unique position in the market by explaining

Besides making the product survive in the market, product differentiation is

Form - A product can be differentiated based on the form of the

Related: What is Just in time Manufacturing? Elements Involved

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