Types of Product Differentiation in Marketing
Product differentiation is a common marketing objective used by companies to create a distinct offering to target customers. Product differentiation is "the differentiation of goods along key features and minor details," according to Valentino Piana of the Economics Web Institute. Companies that consider specific elements of product differentiation and use them in positioning win in the market, suggests Kaizen Consulting's Michael Walsh.
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Convenience
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Customers in the 21st century want things more quickly and conveniently than ever, thanks to new technologies and speedier business processes. Walsh points out that companies that deliver when and where customers want generate happy and loyal customers. Meeting customer timeline expectations and doing a better job at it than competitors is a great benefit in positioning. Kiosks, self-service check points, automated systems and well-trained staff are among features common to convenient business operations.
Customization
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Standardized business operations are becoming a thing of the past in many cases. Aside from large discount retailers, most customer-centered businesses customize solutions for individual customers. Customers buy the solution that is the best tailored fit to their individual needs, notes Walsh. Varying styles, colors, materials and features are options to customize products for customers. Walsh points out that service-based businesses should have an easier time customizing since they deliver more intangible benefits. A strong customization offering is huge in positioning against competitors.
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Premium
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Quality is still a vital factor in separating your products from the competition. Historically, the best product usually wins. In the 21st century, product competition has created less distinction in many industries. However, variance still exists on a continuum from low-cost (cheap) offerings to high-end (high-price, high-quality) points. "Perceived difference in quality by different consumers will play a crucial role in the purchase decisions," notes Piana. Quality, exclusivity and durability are common traits of products differentiated as premium, or luxury.
Link to Positioning
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Positioning is a common market strategy used to create a unique position for a company and its brand in the marketplace, relative to competition. Product differentiation is an important element of this as company's typically position themselves based on distinct product features or as a low-cost or premium brand provider. Piana notes that positioning is about conveying a strong need for distinct attributes of your product to its given market. Walsh advises that positioning successfully requires use of convenience, customization and value-oriented differentiation.
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References
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