Defined

Product differentiation is a marketing strategy that focuses on showing off the differences between your
product or business and the competition. When consumers have so many choices these days, why should
they pick you over all the rest? If you can show the public what makes your product different, you have
opened the door to showing them that your product is unique or better in some way. This differentiated
product image can promote brand loyalty and allow you to create a competitive advantage over your
competitors. This is important if you hope to gain and sustain a large share of the market.

Examples of Differentiation

There are many ways to differentiate your product. One common strategy is to focus attention on different
physical characteristics. For example, a food product may claim that it tastes better or uses better quality
ingredients. Personal grooming products, such as shampoo, may claim that they lather better or leave your
hair feeling cleaner. You could even differentiate on the basis of size or quantity. The possibilities are
endless!

Another way to differentiate your business or product is through location. If you can place your business or
product in a location that is more convenient for your target customers, you can gain a competitive
advantage. This is especially important when there is very little difference in the actual product or price. If
all else is equal, customers will generally choose the most convenient location to make their purchase. An
example of this strategy is McDonald's restaurants located inside Wal-Mart stores. When it comes to
McDonald's, a hamburger is a hamburger is a hamburger! But if you have a Big Mac attack when you are
shopping in Wal-Mart, the convenient McDonald's restaurant under the same roof has a competitive
advantage over the one a mile down the road.

You can also differentiate your product on the basis of service or a warranty. If the competition offers a
ninety-day money back guarantee on their computers, you could extend your guarantee to six months or a
year. Or, you might offer in-store repair service, rather than shipping the computer back to the
manufacturer.

Some companies differentiate by supporting the environment, good health, or other social causes and
charities. In 2013, a study was conducted of over 10,000 adults in 10 countries around the world. A
whopping 91% of them stated that they would switch brands as long as the. Price and quality of the
products were comparable