Product Differentiation Methods


#1

Consider the many means of differentiating products and services. Give an example of those differentiation strategies that have the most impact on your choices? Explain why? Can you think of certain brands that excel at a number of these means of differentiation?


#2

Factors that make the product unique from another company or business’s product is what differentiation is called as. Quality, product design, convenience, valuation, product aesthetics, packaging, customer service, technology, user experience, and form are some of the means of differentiating products and services.

Each of the differentiating factors mentioned above impacts my purchasing habits in a way or other. But shrinking that list to top three, those factors would be valuation, user experience, and convenience. Looking further into this with examples starting off with valuation, both Apple and Acer produce laptops. While I was exploring for an option to get one, I went with the high-end laptop of Acer looking at the feature they provided along with the benefits that I can avail with the same. The pricing would have been same for both the product but the valuation that I had for Acer was a lot higher than the Apple to go with the same. Valuation, in this regard, is something that defines the perceived value and I was inclined towards it as my valuation of the product exceeded the cost I was paying for the same. Further on looking at the user experience regarding, I choose OnePlus as the company to purchase my smartphone from. This included of several factors at the time of purchase and one of which was the user experience, the smartphone used stock android as OS with customization to make it further appealing and easy to use for the user. With added features like a fingerprint scanner and face scan as modes to unlock the phone, it’s something that was appealing and would make the phone easier to use. The user experience is thus the overall experience of using a product or service like a smartphone here. And, looking at an example for the third differentiating factor in convenience. I would prefer to use eSewa, Khalti or similar other digital wallet or internet banking instead of going to the bank to withdraw or pay funds. That is convenience as I don’t have to wait in queue, commute or fill in long details to withdraw the amount. Another example of the same for me would be my preference to recharge my mobile with online modes rather than go to the shop to buy a recharge card, scratch it and enter the pin code. So, convenience is something that makes users life easier by simplifying the process or workflow.

Moving towards a brand that excels at a number of these means of differentiation reminds me of Alphabet, Apple, PayPal and Zappos to name a few. Alphabet the company which own Google and so many other services has been able to simplify the life of people with searches and results to it at the fingertips within minutes, maps to navigate around to documents, presentation and so many more, the company have added convenience, made use of the technology, ensuring the quality and product aesthetics are good in their hardware design (smartphones) and added a fantastic customer support to their customers. Apple has been able to provide a quality product with good design, product aesthetics, and packing. While PayPal has added convenience to people’s life by making it possible to send and receive money all via a single click instead of visiting the banks, they’ve made use of the technology in the base way possible with the inclusion of systems like code changing tokens (Four, 2007). Finally, Zappos is the other company which has been able to lead the industry as the best of all when it comes to customer service and user experience by providing a tailored response with full dedication towards every single customer (Emerald Group Publishing Limited, 2009).

To sum up, it’s very important to differentiate a product in the market and stand out among the mass. People have their own personal preference and factors they value the most important when it comes to differentiating factors.


References

Emerald Group Publishing Limited. (2009). Zappos knows how to kick it. Human Resource Management International Digest, 17 (4).

Four, K. (2007). Paypal introduces code changing tokens. Computer Fraud & Security, 2007 (2), 3.


#3

The means of differentiating products have to do with first understanding the type of product. Theodore Levitt in his article, "Marketing Success Through Differentiation-of Anything” explains when products do not have a distinct and substantive difference, the sales power dynamic diverts to the only things that can influence a buyer and that is differentiation factors. (Levitt, Jan 1980) The product have been classified into the following types.

Generic product: These product all have the same base construct but only difference is in packaging. For example Wai Wai and Rara. Both are noodles but are packaged and presented in different forms.

Expected product: These are what the customers expect to be present in a product. For example a mobile phone now a days must have a touch screen. These factors needs to have these expected products to be present.

Augmented product: When the product offers something extra for the customers in addition to the product or service it is called augmented product. For example free swimming and gym while staying at a hotel. This differentiates the hotel with its competitors.

Potential product: These types of products are created after careful market research. It’s a product that has augmented proposition for the future. For eg: An app that can help taste quality in a food product.

Based on these type of products the differential strategies can be applied. Differentiation of products have been categorized by Kotler and Kellar (2012) under the form, features, customization, performance quality, conformance quality, durability, reliability, repairability and style. (Kotler & Kellar, 2012) Changing the products size, shape, quantity, quality, custom product etc. have been used by marketers to differentiate products.

Product differentiation strategy depends on the type of product that I will be purchasing. Purchasing generic products such as food item will be more focused on the quality and hygiene. You could say a proper and quality sealed packaging for flour, rice and freshness for vegetables and fruits would be preferred as a differential indicator. For example we buy a flour in sealed packet, i.e. Chakki atta for chapatti instead of the open one because we care for the cleanliness of the product and have a perceived belief that it has quality. The open one can have various diseases carrying insects and rodents walking on it.

Purchase of expected products such as electronic or mechanical products i.e. car and bikes will be focused on the performance quality, design, durability, reliability and reparability. For example purchasing in a 150cc segment, people may tend to lean towards Bajaj bikes as it has good design, readily available spare parts and good resale value.

Similarly purchasing augmented products such as cloths will be influenced by comfort, brand, fashion and color. When it comes to shoes, we usually go for branded ones. Eg, Nike, Adidas, Converse etc. The colour also influences a lot in the differentiation which motivates purchase. These products carry with itself a perceived customer value which says it is not only durable and reliable but also fashionably accepted.

Two things to understand when marketing managers differentiate products is to keep in mind that great products make life easier and when a product is used as a verb it has done something great. Thus looking at Nepali products I think WaiWai had one of the best strategy to differentiate in their product segment. It is easy to purchase, easy and quick to cook and people use it as a verb. On international level, I would say LG is the product that has differentiated itself in its product segment. It stand over other as having good performance, reliable and durable. This perceived customer value has helped differentiate it and increased its market share.


Reference

Kotler, P., & Kellar, K. L. (2012). Social Responsibility Marketing. In K. L. Philip Koter, Marketing Management (pp. 170-171). New Jersey: Prentice Hall.

Levitt, T. (Jan 1980). Marketing Success Through Differentiation–of Anything. Harvard Business Review , 15.


#4

In Product marketing, the aim to fulfill the needs and wants of the target customer. A product is tangible (Surbhi, 2016). It’s defined as any item you can touch, feel and see. Suppose a car is a product and you can easily see, touch and fell the car. In Service marketing, the firms seek to create a good relationship with the customer, to win the trust (Surbhi, 2016). But Service is more difficult. They may not be same for every customer in every time. The thing about flight tickets pricing constantly change along with the level of service (Porter, 1996). The service on one flight could be entirely different from another with the same airlines.

Here, an example of differentiation strategies:

In terms of Products Marketing:

1. Form: A product form is a key drive of competitive advantage and new product success (Jay, David, & Russell, 1976). Here, one of the example is Dove which offers products such as soap, hand wash and has a glycerin. This means same company can develop same product in different form. Similarly, Dove in white color and its outer look is so good. The logo of Dove is unique and an attractive. The main target customers such as ladies. Similarly, Fogg which is a deodorants brands, Vini cosmetic product came up with different types of product, hair gel, body spray, and deodorant crème. It has a unique packing and first deodorants brand as the without gas body spray. It came with basis USP of long-lasting fragrance and guaranteeing 800 sprays for a single gas bottle (Kulkarni).

2. Customization of Product : One of the example is e Nike, it is a marketing company which happens to sell shoes. It customizes and produces the product is designed according to the needs and wants of the customers. They can easily design their customize shoe from their home. Customized shoes were sold for 170$. Nike not only increased their sales but also earned huge PR for their innovation in shoe industry.

3. Performance Quality or Functionality of Product: Here, one of the example of quality performance is iPhone which is one of the largest selling smartphone. It has unique feature like unique operating system, inbuilt hardware and software and High level of security so that people trust iPhone than others. They are ready for paying the high cost as compared to other smartphones for the high performance of it.

4. Style: Here, Nike is the best example that demonstrate style. The Nike is a very stylish in brand and it not directly promote its brand. Nike always promote the athletes and players. So, athletes and player are top styles person in the world. Due to the stylish features I preferred to use Nike.

In terms of Services Marketing:

1. Easy Ordering via Online: One of the suitable example is Daraz which is an online shopping. By using this I became so much satisfied from Daraz service. They response their customer promptly. I once ordered a shoe it was delivered within 12hrs of my ordering. Online shopping so much easy by its easy ordering aspect and it helps to manage our time.

2. Installation and Training: One of the example is the World Link which is one of the largest Internet service provider in Nepal. Here, when I call the operator they came to my house so that they can configure it on my Router. Moreover, after the installation they furthermore trained me (how can I can solve the simple problem) on how to operate. In Nepal, World link is the No.1 Internet Service Provider as a service and users. Generally World Link solved their customer problem within 24 hours. Nowadays company easily trained their customer through social media Facebook, and YouTube.


References

Jay, E. K., David, H., & Russell, I. H. (1976). New Product Development. Harvard Business Review .

Porter, M. (1996). What is Strategy? Harvard Business Review , 61-68.

Surbhi, S. (2016). Difference Between Product Marketing and Service Marketing. Inc.


#5

Differentiation is the approach under which a firm aims to develop and market unique products for different customer segments. A differentiation strategy involves the firm in creating a product/service, which is considered unique in some aspect that the customer values because the customer’s needs are satisfied by the product/service. Due to the globalization, there is intense competition among organizations. The customers’ demand is also changing and increasing. In order to gain competitive advantage in such situation, any firm needs to produce products with more valued features. As such, a differentiation strategy would provide greater scope for the organizations to produce products with more valued, desirable features as a means of coping with changing needs and demands. Differentiation helps to achieve competitive advantage position and enhance the organization’s performance in relation to that of their competitors (Dirisu, Iyiola, & Ibidunni, 2014).

A company can differentiate its product by means of price, technology, quality, customer service, user experience, design and packaging, and product form (Kotler & Keller , 2016). Similarly, ease of ordering, delivery, installation, customer training and consultation, maintenance and repairs, and returns help in differentiating the services (Bhasin, 2017). Product and service differentiation helps in value creation, non-price competition and creation of brand loyalty that ultimately helps in gaining market share through perceived quality (Jhones, 2006).

The strategies that affect my choices of product and services includes price, customization, performance, convenience, ease of ordering and delivery. I prefer online shopping as it saves my time and effort. The things I want get delivered to my doorstep in just a click within few hours of ordering. Likewise I perceive that the products with very low price are of low quality. So I opt for the product with affordable price rather than the cheap ones. I pay more attention to the performance of the product than the aesthetics.

However there are some brands that excel at number of means of these differentiation. Apple and Zappos are two of them. Apple is providing high quality product with updated technology and good product aesthetics. Similarly, no one can beat Zappos when it comes to customer service and user experience.

To conclude, product differentiation is important to stand out in the crowd. The nature of product and targeted customers should be kept in mind while developing differentiation strategies for the products and services.

References

Bhasin, H. (2017, December 30). Service Differentiation and 7 Ways to Differentiate Service from Competitor . Retrieved from Marketing 91: https://www.marketing91.com/service-differentiation/

Dirisu, J. I., Iyiola, O., & Ibidunni, O. S. (2014). PRODUCT DIFFERENTIATION: A TOOL OF COMPETITIVE ADVANTAGE AND OPTIMAL ORGANIZATIONAL PERFORMANCE (A STUDY OF UNILEVER NIGERIA PLC). European Scientific Journal, 9 (34), 258-280.

Jhones, D. (2006). Customer Service: Product Differentiation in International Market. International Journal of Marketing , 67-89.

Kotler, P., & Keller , K. L. (2016). Marketing Management. London: Pearson.


#7

Kotler & Keller (2016), in their book Marketing Management, differentiation is an effective strategy that leverage company or products unique selling proposition (USP). Differentiation means creating a unique identify for each product and service so that it can easily be differentiated from other similar competing products. As its quite obvious to us that today’s marketplace is very competitive and provides customers a variety of choices.

Let us differentiating products and services; starting with product differentiation, generally means the marketing of the product that are similar in many ways with minor variations to make product look more attractive than its customers highlighting the unique qualities. The various means of differentiating the product are; from, function, features, performance quality, reparability, customization, conformance quality, durability, reliability, style, uniqueness, etc. Now, in case of service as well, there are various features that make the service different from each other. The delivery time, ordering ease, installation and employee trainings etc. are the features given in a service that helps them differentiate from other competitors in the market.

However, a firm differentiates their products and services both based on following elements likes price, technology, quality, user experiences, packing etc. which has also impacts on my choice. Customer has a different price they would be willing to pay for the product. It is similar to me that if the product worth to me then I would ready to pay for; I would not wait for cheap all the time. Coming to the technology, it is obvious that adopting new technology lead consumers to perceive differentiated products. The advancement in this technological aspect has created new all the time. I would also prefer to change my mobile frequent as per the change in form and function. When we say about customer service then a firm must have a clear vision of what they want their customer to experience and how they intend to deliver it to the standard and in a consistent way. For instance, when I order from Daraz Online Shopping then they usually delivery my order on time. Next, when we talked on packaging, this differentiation can mainly be seen in the packaging of perfumes, body spray, tea packets or tomato ketchup etc. Unique packagings are always near to your eye. And, finally coming to the personal experienced on the product or service is the backbone to purchase on. The positive satisfaction of the product from my friend circle will definitely click to me and I would purchase.

The brands likes Apple Inc, Google Inc and Amazon definitely excelled in creating unique products or services that completely differed from their rivals. The core competencies result into difference from competitors through knowledge and technical ability plus their competitive advantage (Hunt & Morgan, 1995). Facebook has its core competency on its algorithm, Mac Donald on its material management and Wal-Mart for its inventory and logistics management with every day low price. Their product provided distinct value, rare product that cannot be easily imitated and added unique characteristics to logically and emotionally appeal consumers. All of the company are pioneer and provided new products and services which other company could not provide.

References

Kotler, P., & Keller, K. L. (2016). Marketing Management . Boston: Pearson.

Hunt, S. D., & Morgan, R. M. (1995). The comparative advantage theory of competition. The Journal of Marketing, 1-15.


#8

Differentiation is defined as the process by which one product is stands out in the market, making a segment attracted by the unique value contained in it. A differentiated product gives competitive advantages for the product in the market (Kotler & Keller, 2015) and there are various ways that a product can be differentiated: Forms, Features, Performance Quality, Conformance Quality, Durability, Reliability, Repairability, Style and Customization while for the services they can be differentiated by: easy of order, delivery, installation, customer training, customer training, customer consulting, repair and maintenance.

Customer social responsibility is also used as the differentiation method (Boehe & Cruz, 2010) which is the most impacting strategy in my case. I don’t prefer Coca-cola but I remember I had bought the cola’s bottle because it was supporting the deprived schools with infrastructure development with its “Support My School” campaign. Similarly, Wai-Wai’s rural solar-light campaign was also something appealing me.

Similarly, other product that I remember is Gillette’s fusion. This product has its unique design , new features and innovation that differentiates it from the other products. Its flexiball technology makes it bend and turn in a way not found in any contemporary razors (Procter & Gamble, 2016).

Reference

Boehe, D. M., & Cruz, L. B. (2010). Corporate Social Responsibility, Product. Journal of Business Ethics , 91 , 325–346.

Kotler, P., & Keller, L. K. (2015). Marketing Management 15th Edition. New Jersey,Upper Saddle River: N.J.: Pearson Prentice Hall.

Procter & Gamble. (2016). Gillette Newsroom: P&G . Retrieved from P&G Website: http://news.gillette.com/about/history