Differentiation Opportunities

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Published: 05th September 2011
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Product differentiation is important, especially in a market where there are a small number of target customers. Differentiation is all about clarifying the uniqueness of your product, and highlighting the features that make it different from the competitor. In order to establish that distinctive mark, it is important to make the benefits of the product very clear. If those are successfully communicated, then the brand will automatically stand out in the mind of the customer.

There are several ways in which you can differentiate your product. Differentiation can be done on the basis of varying features and characteristics. In addition, products can be differentiated based on packaging, product ingredients, quality, and technology. With differentiation comes the promise of a product that is going to provide greater value, and be given preferred status.

It is possible to differentiate your product through innovation. If you are able to engage in research then you can come up with new product features. In addition, you can improve the functions of the product and make it more distinctive. Microsoft has been able to do this, by coming out with upgrades and updates to operating systems on a regular basis. This has continued to make its products very attractive in the marketplace.

You can also differentiate your product by distinctive packaging. It is amazing what a simple facelift can do for a brand, it can totally revitalize a fledging product/service. In so doing, you also have the opportunity to adjust the target audience of your product, and re-position it in the marketplace. Re-packaging can actually change how the customer views your product, and also improve the value of it.

Differentiation can provide several opportunities:

It can lead to increased sales. Once the seed of value has been planted in the mind of the customer, then it just needs to be watered with constant reinforcement, until it grows into brand loyalty. This will eventually lead to an increase in sales.

It can lead to premium pricing. When a company is able to communicate value to a customer, then they will become less concerned about price. Because of the significant distinctions that have been communicated, the customer no longer views the product as the same as the others in the market. They now view it as being different from competing products, and are therefore willing to pay more for the product because of this. Also, products that are innovative are able to command a higher price.

In order for differentiation to be successful, you have to be aware of current market trends, and recognize when changes occur. If your business is actively involved in customer engagement, then this will facilitate the necessary feedback to help decide if you need to innovate. If you need to do so, then feedback can also help to guide your decision with regard to the most suited developmental path to take.

If your product is different, then it will stand out in the market, and if it does, then you have the potential to dominate the market, and increase revenue.

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