Product differentiation is a process used in marketingthat identifies and communicates the unique value a product or brand brings to the table when compared to competitors. 1. In addition to copycats, there is a multitude of other risks.eval(ez_write_tag([[250,250],'productmint_com-box-4','ezslot_6',172,'0','0'])); Too much or too little focus: When specifying a target user base, companies may run into the risk of being either too broad (e.g. What is product differentiation? Example: Apple — Differentiation Strategy Apple Inc. is an American corporation that designs and manufactures computer hardware, software and other consumer electronics. This is not to be confused with a value propositionwhich communicates your overarching promise. Here’s how product differentiation can benefit a business.eval(ez_write_tag([[250,250],'productmint_com-medrectangle-4','ezslot_3',171,'0','0'])); Increased brand awareness: A differentiated product is, by definition, distinct from its competition. 2. What is the definition of product differentiation? There are 3 types of product differentiation: Horizontal differentiation – Difference in products that cannot be estimated in terms of quality. It mentions its philosophy as well as the difference between Beardbrand and similar competitors. The company’s product is differentiated through a noble social mission, ease of use, transparency, and speed of delivery (i.e. Product variation refers to any change that alters ‘the physical characteristics of a product’ or ‘the conditions under which it is sold’ like changing the colour of a toothpaste tube. There are primarily 6 ways to differentiate, These include: 1. Zoom. She claimed that she could taste the difference between a Coca Cola and Pepsi while being blindfolded. All of these products are unique to what Apple’s competitors are selling which is why there is so much buzz around these products. Last Updated on October 3, 2020 by Viktor. Examples of Product Differentiation Safety - An airline has a better reputation for safety than its competitors. When users file a claim, smart AI programs will assess the claim first. Examples Of Product Differentiation. Also, Disney’s operation in Orlando, Florida is another example of product differentiation according to location. Other competing platforms, like Udemy or Coursera, rely on ‘everyday’ individuals and academic scholars to create educational content. Here are a few product differentiation examples of businesses that have made the strategy work for them. Think of the medical store that provides medicines 24 hours, 7 days a week. Typically, this process starts with adding additional features to the product th… Taking a look at Apple’s launch of the iPhone 11 shows the company’s willingness to target a different set of consumers for the same product category. Top Competition: AT&T, Verizon Wireless. Form. Successful product differentiation creates competitive advantages, including a heightened awareness of the product and brand, the ability to charge higher prices, and target customers more effectively. Product differentiation is a product's unique value on the market. A large proportion of trade today takes place in highly differentiated products other than homogeneous products, especially in manufactured products. Differentiation strategy examples … Starbucks Another great example of user-generated content, Starbucks’ White Cup Contest launched in April 2014. Explain and give an example of these terms in your own words. There are three types of product differentiation. Nowadays, Zoom is furthermore expanding into hardware products and networking which allows them to serve customers end-to-end.eval(ez_write_tag([[300,250],'productmint_com-large-leaderboard-2','ezslot_8',177,'0','0'])); MasterClass offers online video classes that are taught by top performers in their respective fields. The company headquarters is in Cupertino, California, CEO and co-founder is Steve Jobs and the company boasts of 284 retail locations spanning 10 different countries. Consumers can say “Product A is better than Product B.” For example, in the pharmaceutical industry, a person can decide whether to get a branded medication or a generic. Product differentiation is what makes your product or service stand out to your target audience.It’s how you distinguish what you sell from what your competitors do, and it increases brand loyalty, sales, and growth.. Product Differentiation depends on how the brand sees its product, and how the customer recognizes the product. Edward Chamberlin originally coined this concept in The Theory of Monopolistic Competition.Simply put, it refers … Oftentimes, users can expect to receive compensation for their claims within a matter of hours. In recent times, Zoom has risen to worldwide prominence, becoming the poster child for the accelerated growth digital businesses experienced during the pandemic. Zoom launched in 2011 and quickly took the video communications world by storm. Shiny object syndrome: People always want the latest and best-looking tech, either due to a fascination towards the product category or simply because of social pressure. The product differentiation process may be as simple as redesigning of packaging to introducing a brand new functional feature in a product. Take, for instance, the case of Slack, which was just recently surpassed by Microsoft Teams in terms of user base. Examples include Coca Cola vs. Pepsi or Pampers vs. Huggies. Now, what does this look like in action? For this process to be successful, it is essential to identify and communicate the product’s unique value proposition while highlighting the distinct differences to competing products. In recent times, Zoom has risen to worldwide prominence, becoming the poster child for the … Vertical differentiation exists when consumers compare a product according to one feature – quality. A feature that also differentiates the two medications is ‘price.’ Brand names are much more expensive than generic medications. Product differentiation on MasterClass comes in the form of enhanced quality, both in the form of world-class instructors and high-end video production. At night, I work on expressing my weird thoughts through this blog. Conversely, where there is high reward, risk is not far around the corner. What students produce is a demonstration of what they have learned, also known as an assessment. Understanding technology adoption life cycles can help you to proactively do that. T-Mobile. Apple Macbook Pro. These characteristics allow them to find the right channels -to target consumers, such as YouTube ads on fitness-related videos. How to leverage psychology to innovate, influence, motivate and sell. Product Differentiation Defined. Ask too low of a price, however, and customers may not see your product as truly valuable. Online artisan store and shopping gallery, Etsy offers its users the chance to showcase their … Danger - A white water rafting tour provides just the right level of risk for thrill seeking customers. This is a marketing process that highlights the unique features of a company’s products as compared with its revivals’. Cookies help us deliver our services. 1021 Words 5 Pages. If it comes with a reusable filter, the savings on paper filters are highlighted in packaging and advertising it. A product’s unique selling proposition (USP) can be literally anything that makes it unique or different from others out there. Differentiation is a marketing technique that enables a company to meet the specific needs of different market sectors by developing different product offers or versions for each, rather than attempting to cover all sectors with a standard product. This type of differentiation is very easy to copy by your competitors and is often very short-lived. Differentiation strategies can be used in a variety of industries and business types. Now that we’ve looked at the categories of product differentiation, let’s look at the specific factors that can differentiate products. For example, you can justify a higher price if customers recognize that your product offers unsurpassed quality. Hereby, products are differentiated based on a multitude of factors. BusinessProductPrivacy PolicyTerms of Service, Factors Influencing Product Differentiation. Furthermore, the company donates any claim surplus to a charity of the user’s choice, which reduces the instances of insurance fraud. A way to think about differentiation is in terms of the crowded shelves of a supermarket. Differentiation strategy examples: Happy Socks The company created high-quality socks with gorgeous and unique designs, and put them in beautiful distinctive boxes. Those that are relevant to Apple are product features, product mix, links with other firms, and reputation. For example, if you are in the growth phase, you should increase the number of different versions you have in a product line to more closely target different markets. Establishing a differentiated product experience oftentimes yields a multitude of benefits. Some of the most prominent examples include Apple’s iPhone, Sony’s PlayStation, or Toyota’s Corolla car.eval(ez_write_tag([[300,250],'productmint_com-banner-1','ezslot_5',173,'0','0'])); Let’s look at some recent examples in the section below. Hi folks, my name is Viktor! Your business has only two departments: marketing and innovation. Within vertical differentiation, products can be assessed on one factor. The KAYAK Business Model – How Does KAYAK Make Money? In this article we will discuss about the sources and importance of product differentiation. An example of product differentiation is with the series of Apple products such as the I Phone, Mac Air laptop, and the I Pad. Product Differentiation Examples. First coined by Harvard economist Edward Chamberlin in his 1933 publication The Theory of Monopolistic Competition, product differentiation deals with the process of separating one’s products or services from the existing competition in the market. It resonates with a certain group of people who then become devoted custome… Customers are willing to bear the cost, especially when parts of the differentiation arises from a superior set of features or components. easiness to order). A great example is the smartphone market, which offers products based on categories such as price, operating speed, design, or camera performance. Report violations, 7 Examples of Sustainable Competitive Advantage, How to Build a Brand You Can Be Proud Of ». The superior quality allows them to charge above-average prices for their courses. A product will become differentiated from that of the competitors if its form (size, shape, or … The product, price and promotion portions of the marketing mix indicate what your best options are for product differentiation. Charging higher price points: A differentiated product experience allows customers to charge a higher price for their offerings. Here are 9 famous brands that have honed in on their differentiation and succeeded as a result: Lush Differentiator: bringing a natural beauty brand to the makeup industry as an authentic alternative to traditional products. Differentiation … I recently made a 5€ bet with my girlfriend involving a blindfold and two very sweet drinks (no you perv, no kinky shit!). Focusing on your customers is a good start to successful product differentiation. If your product differentiation advantage lies within one or few features, competitors catching up is just a few sprint iterations away. Product differentiation is a viable strategy, especially if the company exploits the conceptual distinctions for product differentiation. The Affirm Business Model – How Does Affirm Make Money? This has made it very important for businesses to make their customers understand what different they have to Examples of Differentiation There are many ways to differentiate your product. Oftentimes, customers assess those types of products by personal preferences. The winning entry would be the template for a new limited edition Starbucks cup. 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