CONTENTS

Section 3: What is product differentiation?.................................................................................................2

Why is product differentiation important?..................................................................................................2

Product Differentiation Strategies...............................................................................................................3

Section 4: Packaging, Branding, labeling.....................................................................................................4

Packaging.....................................................................................................................................................4

Brand...........................................................................................................................................................5

Labeling.......................................................................................................................................................6

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SECTION 3: WHAT IS PRODUCT DIFFERENTIATION?
Product differentiation is used in marketing to differentiate a product or service from the others in the
market by offering something valuable to the target audience. The differentiation process requires
defining this unique point of difference that your products have compared to the others on the market
and clearly communicating that difference with the customers.

Another phrase that is used for these types of points of difference is unique selling propositions or USPs
in shorts. Using those, you can market your products and appeal to your customers to choose your
product over similar ones in the industry.

WHY IS PRODUCT DIFFERENTIATION IMPORTANT?

Due to technological advances and the Internet, many industries today have a much lower barrier for
entry which makes it easier for new businesses to arise. And although that might be good for the people
and the economy, it’s not very helpful for the companies that are already on the market. The bigger the
number of companies on the market, the higher the competition between them. This is where product
differentiation comes into place. For many companies, product differentiation is necessary for their
survival.

Products that have no differentiation strategy in place are at risk of being lost in the sea of similar
products and inevitably failing to keep their place on the market. Benefits and challenges of product
differentiation

Benefits

Creates additional value: this means that customers will get extra value and not just a product that
satisfies their needs. The added value can come from the product itself, but it can also come from the
brand overall. For instance, random sneakers of $20 will do the job too, but you will choose Nike or
Adidas for the added value of having brand-name sneakers.

Creates brand loyalty: when customers meet your products in-store or outside of it, they will know
what the products represent. If they are familiar with the brand, they will be more likely to choose your
product over the rest of them. For instance, if you see a random brand for clothes and H&M or Zara
store, you’re more likely to go to brands that you know what to expect from.

Boost competition: the basic competition between businesses on the market is the price. And price is
not always a correct indicator. With USPs, businesses can compete with more creative things unrelated
to the price.

Justifies the high price: if you offer something really unique that people love, you can justify your high-
priced products with your point of difference.

More resources: choosing a differentiation strategy can really put a strain on resources like money,
effort, and time. This can burden your employees and resources. This is especially the case with smaller
businesses with small numbers of employees.

Higher product prices: the products can end up having a higher price from the competition’s products
when you add all the efforts for product differentiation.
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PRODUCT DIFFERENTIATION STRATEGIES
Your product differentiation strategy can be based on one or more of the following areas:

1. Price

Price is the most common area that differentiates products on the market. The usual perception of the
customers is that high-quality premium products are the ones that are more expensive, and the cheap
ones are lower-quality products.

2. Quality

High-quality can be the thing that differentiates your product. For example, people might choose a Rolex
watch over a medium or low-quality watch if they value quality the most.

3. Features

In one price spectrum, differentiation can happen in the area of features like size, ingredients, origin,
etc. Brands can also justify their higher prices with feature differentiation.

4. Location

The location of the manufacturing of the product may also be considered to be a point of difference. For
example, a person from one country that wants to support that country will choose a product
manufactured there.

5. Promotion and marketing

Marketing efforts produce a brand image which is a very strong differentiation among customers.
Additionally, things like promotions, add-ons, etc also fall into this category.

6. Complexity

The level of complexity can be a great differentiator especially in industries like the technology sector,
etc.

7. Looks

How the product looks can be also a point of difference. Mostly this happens with luxury goods or
apparel.

8. Reliability

Some products are more reliable than others. They are known for being less prone to malfunctions or
damages and this can also make a difference in the choice of the customer.

9. Distribution

Channels of distribution can play a role in product differentiation too.

10. After-purchase service

Services granted to customers after the purchase is done are also good for differentiating a product
among customers.

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Conclusion

A point of difference strategy can bring a lot of respect and loyalty to your brand.

SECTION 4: PACKAGING, BRANDING, LABELING

PACKAGING
Packaging involves designing and producing the container or wrapper for a product.

Traditionally, the primary function of the package was to contain and protect the product, in recent
times, however, numerous factors have made packaging an important marketing tool. Increased
competition and clutter on retail store shelves means that packages must now perform. many sales
tasks-from attracting attention, to describing the product, to making the sale. Companies are realizing
the power of good packaging to create instant consumer recognition of the company or brand.

Developing a good package for a new product requires making many decisions. First, the company must
establish the packaging concept, which states what the package should be or do for the product. Should
it mainly offer product protection, introduce a new dispensing method, suggest certain qualities about
the product, or do something else? Decisions then must be made on specific elements of the package,
such as size, shape, materials, color, text, and brand mark. These elements must work together to
support the product's position and marketing strategy.

Importance of packaging

Product security.

The attractiveness of the product.

Identification of the product.

Product Usability.

Sales Tools that Work.

Channel Collaboration.

Segmentation.

Primary packaging: Immediate packing of a product, example glass bottle of cough syrup.

Secondary packaging: Extra packaging given to ensure the protection of the product. For instance:
cardboard box to keep the glass bottle of cough syrup.

Transportation packaging: It is also called as final packaging, that is given for proper storage and
transportation, cardboard box to keep the glass bottle of cough syrup is transported.

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 example of packaging of cough syrup

BRAND
A brand is a name, term, sign, symbol, or design or a combination of these, intended to identify the
goods or services of one seller or group of sellers and to differentiate them from those of competitors.

• A brand name is that part of a brand that can be vocalized.

• A brandmark is that part of a brand which can be recognized but is not utterable, such as symbol,
design, or distinctive coloring or lettering.

• A trademark is a brand or part of a brand that is given legal protection. An example would be the Coke
bottle for Coca-Cola.

• A copyright is the exclusive legal right to reproduce, publish, and sell the matter and form of a literary
or artistic work.

• Brand forms may include mix of name, packaging, logo, design, term, sign, and symbol, which make a
company’s product identifiable from those of its competitors’.

• Developing a branded product requires long-term marketing investment, including advertising,

promotion, and packaging.

Features or requisites of good brand name.

Easy to pronounce.

Short and sweet

Legally protectable

Original

Reflect product dimension.

Branding provide:

value to product

seller the ability to attract loyalty and profitability from group of customers.

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 Example of branding of cough syrup

LABELING
Labels may range from simple tags attached to products to complex graphics that are part of the
package. They perform several functions. At the very least, the label identifies the product or brand.

The label might also describe several things about the product-who made it, where it was made, when it
was made, its contents, how it is to be used, and how to use it safely. Finally, the label might promote
the product through attractive graphics.

A label is a product component that conveys linguistic information about the product or seller. It may be
a tiny scrap of paper or a written statement.” It may be part of the packaging or connected to a product.
It provides spoken information about the goods and the vendor. “A label is a product component that
contains linguistic information about the product or the seller (manufacturer or middlemen). A label
may be a component of the packaging, or a sticker affixed directly to the product.”

They perform several functions.

1. The label identifies the product or brand

2. The label might also grade the product, or describe several things about the product -

who made it, where it was made, when it was made, its contents, how it is to be used and how to use it
safely.

3. Finally, the label might promote the product through attractive graphics.

example of labeling

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