Pdf product differentiation advantages

The potential for differentiating a product or service is partly determined by its physical characteristics. Product differentiation is economically advantageous to a company. Differentiation and its role in competitive advantage. Product differentiation definition, types, importance. Multigroup analysis further revealed that the positive and significant effect of csr product differentiation on export performance is likely to be contingent on the number and type developing vs. Product differentiation and economic progress mises institute. Product positioning differentiation global marketingschrage 15 158 competitive advantage achieved when there is a match between a firms distinctive competencies and the factors critical for success within its industry two ways to achieve competitive advantage lowcost strategy product differentiation. Corporate social responsibility, product differentiation. Product characteristics in terms of product characteristics, duracell might well be one of the best known examples of differentiation in our country. A strategic perspective on product differentiation richard makadok.

A market consists of individual customers who have unique product wants and needs. This may be the result of heavy advertising and other forms of sales promotion. Product differentiation is important in todays financial climate. Nov 20, 2018 product differentiation is essential in todays financial climate. The differentiation can be about colors, packaging, shapes, flavors, etc. Although the two posts sell exactly the same icecreams, consumers are not indifferent between. There could be small businesses or involved in a single business or a large, complex and diversified conglomerate with several different businesses. Product differentiation costs and global competition. Therefore, small businesses frequently attempt to differentiate two or more sets of customers with unique needs which might be met with the companys products or services, from other. Advantages and disadvantages of differentiation open. In the words of noel branton, the impact of product differentiation on market structure depends on the ability of some firms to secure strong advantages over others in this field. However, choosing the right competitive strategy cost leadership, differentiation or focus requires knowledge of own and rivals cost structure.

Pdf on feb 1, 1982, richard schmalensee and others published product differentiation advantages of pioneering brands find, read and cite all the research you need on researchgate. With product differentiation at never get old company, buyers not only buy jeans. Product differentiation occurs on two clear levels. Firms do not advertise, and buyers are rational but unable to judge the quality of. Some brands are able to create competitive advantages through differentiation, even though their product or service alone is the same as, or possibly inferior to, the majority of the other options available in the marketplace. Product differentiation, turbulence and sustainability of competitive advantage. They are available to any consumers as long as the items are online.

Although some few studies have been done on the relationship between product differentiation strategies for competitive advantage, information on the strategies used in kenya is ostensibly missing in the literature. For that purpose, a differentiation strategy is chosen as the topic for the thesis. While having a quality product is good, being able to develop and articulate the qualities or. Pdf product differentiation advantages of pioneering brands. Determinants and consequences of product differentiation strategy. Pdf impact of product differentiation, marketing investments and. Differentiation looks to make a product more attractive by contrasting its unique qualities with. Sep 19, 2019 product differentiation is a marketing process that showcases the differences between products. Differentiated marketing meets specific customer needs, rather than attempting to cover all bases. Product differentiation is the process of distinguishing a product or service from others. Product differentiation, petroleum, effimax, profitability, industry. Offering the same software product in two versions for professional users and for home users enables the supplier to meet the price and performance needs of each sector with only minor modifications to the core product. Below we illustrate a few examples in relation to an often differentiated productwomens handbags.

Jan 14, 2017 the pros and cons of product development show that this process can be risky, but it also provides a brand and business with the opportunity to experience greater success. May 22, 20 the differentiation strategy is where a company decides to choose a certain attribute of the product to focus on. This study therefore sought to determine the role of product differentiation strategy in new kenya corporative creameries for competitive advantage. Kfcs sustainable competitive advantage in the international. Jan 19, 2016 beyond existing competitors, a differentiation strategy also creates benefits relative to potential new entrants. The corporate strategy in these cases is about the basic direction of the firm as a whole. Specifically, the brand loyalty that customers feel to a differentiated product makes it difficult for a new entrant to lure these customers to adopt its product. The methods of achieving differentiation can vary broadly across industries, products and services.

A differentiation strategy offers important advantages and disadvantages for firms that adopt it. Cost leadership strategy, product differentiation strategy, financial leverage, performance introduction the purpose of joint stock companies and their managers is. Pdf product differentiation, turbulence and sustainability. Background product differentiation is a positioning strategy that many firms use to distinguish their products from those of competitors. Product differentiation being the most commonly used one of these two strategic typologies spencer, joiner, and salmon, 2009. Horizontal differentiation has similar products that vary in ways that are often. Pdf prior research explores the individual impact of brand equity and new product development on firms marketing performance. A strategic perspective on product differentiation. When utilized successfully, product differentiation creates a competitive advantage as customers view your product as superior. Product differentiation means that your product has one or more distinct attributes that separate it from competitors.

Find materials for this course in the pages linked along the left. For products that are technically simple a pair of socks, a. But combinations like cost leadership with product differentiation are hard but not impossible to implement due to the potential for conflict between cost. In recent years the concept of competitive advantage has taken centre stage in discussions of business strategy. The advantages of differentiated marketing your business. Thanks to ecommerce, goods and services have become more mobile and digitalized. Product differentiation, competitive advantage, organizational performance. Choose of one puts constraints on using the second.

Studying the phenomenon of competitive advantage and. May 24, 2020 product differentiation or just differentiation is a marketing process of differentiating an offering product or service from others in the market, to make it more appealing to the target audience. Product differentiation advantages of pioneering brands by. Product differentiation is a competitive business strategy whereby firms attempt to gain a competitive advantage by increasing the perceived value of their products. Product differentiation, turbulence and sustainability of. When approached in a methodical way, the innovative outcomes are often worth the risk of future failure. Firms do not advertise, and buyers are rational but. A new soda brand, for example, would struggle to take customers away. A tool of competitive advantage and optimal organizational performance a study of unilever nigeria plc joy i. The advantages of differentiated marketing bizfluent. Industrial organizationmatilde machado product differentiation 4 4. Product differentiation advantages of pioneering brands by richard schmalensee abstract a model is presented in which first entrants obtain demand advantages that can be used, if scale economies are present, to deter any later entry. Horizontal differentiation is when products are differentiated according to a specific feature. Pdf on jan 1, 2014, john mcgee and others published differentiation strategies find, read and cite all the research you need on researchgate.

A differentiation strategy involves the firm creating a productservice, which is considered unique in some aspect that the customer values because the customers needs are. It involves defining the offerings unique position in the market by explaining the unique benefit it provides to the target group. Mar 09, 2015 porter distinguished between two types of strategies. In order to make this strategy work you have to select an attribute that a big enough section of the market care about enough in order to pay a premium price for your product. In each extreme of the beach, there is an icecream post. It allows the seller to contrast its own product with competing products in the market and emphasize the unique aspects that make. While having a quality product is good, being able to develop and articulate the qualities or features that clearly make one product better. Advantages of lowcost strategies the appeal of the lowcost leadership strategy is based on the strong relationship that appears to exist between high market share, and high profitability. Horizontal differentiation has similar products that vary in ways that are often superficial and do not impact price or quality. Kfcs sustainable competitive advantage lies in its adherence to the product and service differentiation and market recognition of specialization guide, 2006.

Kfc value chain analysis can be used in the competitive strategic decisionmaking process. Product differentiation, turbulence and sustainability of competitive advantage catherine matraves and laura rondi 15th march 2005 abstract building on the new theory of industrial concentration, we analyze the relation between market size and product differentiation, and show precisely how product differentiation impacts the. The advantages of a product differentiation strategy small. Its tv advertisement has focused on the fact its alkaline battery is the one that lasts the longest, which means it costs more than its competitors. Advantages and disadvantages of product differentiation. Such firmspecific investments will make competitive advantage more. Vertical differentiation refers to products that fall on a scale from best to worst, highest to lowest, impacting the overall functionality of the item. The welfareenhancing benefit of product differentiation is the greater variety of products available to consumers, which comes at the cost of a higher average total.