Product Differentiation Essay Example for Free

Product Differentiation EssayDefinitionDevelopment or incorporation of holdings ( such as benefits, price, quality, styling, service, etc.) that a products intended customers embrace to be diverse and desirable. Advertising and promotion of a product is based on its differentiating characteristics. Source http//www.businessdictionary.com/definition/product- specialism.htmlToday, the market is crowded with kindred brands, clamoring for the solicitude of customers. In order for their brands to stand out, companies strive hard to make them appear different from competing brands. This is product differentiation. Product differentiation is an objective that a business whitethorn try to achieve through its marketing. Any business, must try to differentiate products from those of competitors, so as to gain a competitive edge over them, thereby attracting more customers. This difference can be achieved by altering the product- making it better than that of the competitors or it can be perceive- such as a strong brand identity developed in the promotional campaign.Need for product differentiationusually customers cannot tell the difference in the midst of competing products- hence the need to differentiate developing a competitive advantageFocus and differentiationA product may have a crapper of attributes, but it is essential to focus on only few of the attributes. Eg Volvo-safety, BMW-performilitary personnelce but it doesnt mean that Volvo does not perform or BMW is not safe. They have respectable focused on those aspects of their products. Therefore their products will be differentiated on that particular attribute. If a product claims to be good at everything, you run the pretend of consumers not believing what you say, even though you may have all those attributes. If a product is focused 1) more credible 2) customers will think that they be as strong in other areas.What to differentiateEasiest way to differentiate is on price, but it is least eff ective as competitors can always facsimile it easily. grammatical case Indian computer market included companies such as HCL and IBM. Then came Siva from sterling computers which sold its computers at a cheaper price. Therefore others followed suit, and thusly Siva had to further differentiate its product in order to attract customers as competing products were similarly priced. Hence, it is better to differentiate on other attributes such as- features, performance, reliability, reparability, design, style, performance and so on.Examples1) Blackberry- Differentiated by addition of BBM in their smart phones. Although other smart phones with IM platforms existed, Blackberry was the one of the first to ecstasy this service to customers as a standard on its devices. Their competition did not have any such service at the time. This attracted customers. 2) Promise- People thought promise was different from other toothpastes as it had clove oil however even some other toothpastes had cl ove oil, but only Promise focused on this attribute and hence it was perceived as a differentiating characteristic. 3) Hero Honda motorcycles- differentiated in terms of fuel efficiency- fill it shut it, forget itBranding and Product differentiationBranding is one way of differentiating products and services. Industries like the garments and tobacco industries, for example, use branding very effectively as the products deep down these segments are often very similar and have little to distinguish themselves from each other. Branding helps to retain customer loyalty. Example Smokers, are very particular about their brand and believe that no other brand can satisfy them. In an experiment, 300 toiletrs who were loyal to 3 major brands were given an unidentifiable sample of each brand to smoke and were asked to identify their own brand.The result only 35% were able to identify the brands and under the law of averages, pure guesses accounted for a third of correct identifications. The agent for this was that brands of cigarettes within the same category (menthol for example) differ very marginally in terms of strength, flavourand taste, and it is difficult for a smoker to truly distinguish surrounded by them. The reason why a smoker is loyal to a particular brand is the advertisment. Eg Charminar it takes charminar to satisfy a man like you reinforces that only Charminar can satisfy the man who smokes themProduct differentiation vs USPUSP is not the same as Product differentiation.USP refers to advertising to communicate a products differentiation while Product differentiation is the process of describing the differences between products or services.Types of differentiationHorizontal Differentiation is by the customers preference/taste of certain characteristics of the product. (Same qualities/price, different style/taste/colour) Perceived survey remains the same. (eg different colours of lipsticks) Vertical Products differ in some characteristic which all co nsumers agree is best. Based on quality. Prices differ as perceived value differs (eg Different brands of lipstick Mac, Lakme, Lipice) Horizontal differentiation is about consumers wants and preferences, while vertical differentiation focuses on the consumers willingness to pay for the quality.RememberDO NOT offer wildly exaggerated differentiation that the market does not want. (eg High priced mens toilet soap Aramusk was unsuccessful due to price)DO NOT contravene useful and expansive differentiation by under attending to other parts of the product- service package. The difference should be OVER AND ABOVE the MINIMUM expectations.Example Fancy hotels with poor serviceThe product is not differentiated until the CUSTOMER understands the difference . The consumer perception is what matters.