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Differentiation primarily affects performance through reducing directness of competition: as the product becomes more different, categorization becomes more difficult and hence draws fewer comparisons with its competition. A successful product differentiation strategy will move a product from competing based primarily on price to competing on ...
It is a form of competition that requires firms to focus on product differentiation instead of pricing strategies among competitors. Such differentiation measures allowing for firms to distinguish themselves, and their products from competitors, may include, offering superb quality of service, extensive distribution, customer focus, or any ...
Achieving product differentiation is one of the ways for businesses to become the market leader. However, if the product differentiation were too radical, it would lead to acceptance problems on the consumer side, because the product might not meet the expected standards, or it could be quickly obsolete. [7]
Differentiation drives profitability when the added price of the product outweighs the added expense to acquire the product or service but is ineffective when its uniqueness is easily replicated by its competitors. [6] Successful brand management also results in perceived uniqueness even when the physical product is the same as competitors.
In markets which contain many similar products, using a USP is one campaign method of differentiating the product from the competition. Products or services without differentiation risk the consumer seeing them as commodities and fungible, thus lowering price potential. Thus having a unique selling point is essential to have a successful ...
Complementary Products – assessment of the impact of related products and services within a given market Although there are a number of factors that can impact profitability in the short term – weather, the business cycle – an assessment of the competitive forces in a given market provides a framework for anticipating and influencing ...
A differentiation advantage is gained when a business's products or services are different from its competitors. In his book, Michael Porter recommended making those goods or services attractive to stand out from their competitors. [15] The business will need strong research, development, and design thinking to create innovative ideas.
Differentiation is closely related to the concept of positioning. Differentiation is how a company's product is unique, by being the first, least expensive, or some other distinguishing factor. A product or brand may have many points of difference, but they may not all be meaningful or relevant to the target market.