What is a differentiation strategy?

What is product differentiation strategy?

• Answer:

  Product differentiation is the marketing strategy of distinguishing an offering or product from others in order to make it more attractive to a target market. This includes not only a competitor's offering or product, but also the company's own offerings.ObjectiveThe objective of product differentiation strategy is to develop a position that the target market considers unique.Expert InsightIn their 2001 article, "What is Differentiation and How Does it Work," Sharp and Dawes note that real world differentiation is a pervasive feature of modern markets, but that it seems to be largely due to differences in distribution and awareness, and occasionally design. Brand level differentiation on functional features is less common due to competitive matching.A Deeper LookSimply making changes to a product is not a form of differentiation. Product differentiation strategy comes from the marketing and descriptions of the differences created by changing the product or offering rather than the actual physical change of the product itself. In fact, in some cases the product itself does not change at all, but rather the marketing of the product does.CategoriesDifferentiation can be done by changing the product or offering itself, changing how it is distributed or changing who it is targeted to. Four major categories affect product differentiation: quality and price; features and design; promotion; and availability.Product Differentiation Within a CompanyOne example of product differentiation within a company for the same product would be ice cream. For example, the company could have 28 different flavors of ice cream. Or the company might develop two different versions of vanilla--the normal vanilla and a higher-priced gourmet version of vanilla.Product Differentiation Against CompetitorsToothpaste companies are carving out their own niches using product differentiation. One company might cater to people with sensitive teeth while another focuses on its whitening and tartar control products.Source:http://www.informaworld.com/smpp/content~db=all~content=a919008371