Differentiation

Strategy and types

Marketing Management – Module 3 12/07/202

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Differentiation
 Differentiation allows the firm to get a price premium
based on the extra value perceived by and delivered to
customers
 Better (performance), Newer (New solution/product), Faster
(reducing time) or cheaper (reducing cost/price)

 Three strategies that lead to differentiation (COP)

 Operational Excellence – Supermarkets – cutting supply chain
 Customer Intimacy – Customized responses
 Product Leadership – Nike, Apple, Sony

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Differentiation
 Product Differentiation (PCDRRFSD)
 Features – characteristics that supplement basic functioning
 Performance – levels at which primary characteristics function
 Conformance – product design & operating characteristics vs.
standards.
 Durability – product’s expected operating life
 Reliability – probability that the product will not malfunction or
fail within a certain period of time
 Style – How well the product looks and feels
 Design – Integrating factor

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Differentiation
 Services Differentiation (DICCRM – follow the sequence)
 Delivery – Fedex
 Installation – Durables, Tata Sky, DishTV
 Customer Training – ERP, Software
 Consulting Services – Insurance, Investment
 Repair – Aquagaurd, Air Conditioners
 Miscellaneous - AMCs

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Differentiation
 Personnel Differentiation (Airline, Banking, Restaurants)
 Competence (4C2R)
 Courtesy
 Credibility
 Reliability
 Responsiveness
 Communication
 Image Differentiation (SAME)
 Symbol – logo, type, object
 Media – Advertisements, Billboards (AMUL)
 Atmosphere – McDonalds, PVR Cinemas, ADLabs
 Events – Only Vimal (Reliance and Asiad?)
 Identity – Logos, brand name, symbols, atmospheres etc
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Differentiation costs
 Trade Offs (IPMAP)
 Product modification costs
 Manufacturing Costs
 Administrative costs
 Inventory costs
 Promotion costs

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Thank you

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