What is a Product Differentiation Strategy

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Product Differentiation Strategy:
Making Your Products Stand Out From the Crowd

Why do some companies achieve things that are beyond our expectations? How do they defy our idea of what’s possible? The answer is simple. They don’t play it safe. They don’t use ‘that’s how we have always done it’ as an excuse to stay in their comfort zone. Instead, they take risks, explore new, untapped markets, and reap amazing benefits.

We live in a hyper competitive, crowded marketplace where only brands that understand that selling a product goes a lot deeper than compelling ads and colorful visuals remain successful at grabbing the attention of customers. In simpler words, it’s all about developing a solid product differentiation strategy that brings measurable, long-term results.

What is a Product Differentiation Strategy?

A product differentiation strategy can be defined as a marketing strategy that businesses use to
distinguish their product or service from similar offerings available to customers. It is about
delivering the message that your product is positively different from the ones offered by your
competitors. In other words, product differentiation strategy helps you gain an edge over your

What are Some Ways to Differentiate Your Product?

Product differentiation is not about being different just for the sake of it. Instead, it’s about
developing a strategy around the needs and problems of your customers. Therefore, to differentiate your product, you must first thoroughly research the market, evaluate your competitive landscape, and understand your customers’ needs. Once you have done this, you can use any one or a combination of the following strategies to make your product stand out from the crowd.

1. Value Differentiation
This strategy focuses on the unique characteristics of a product to persuade consumers to making a
buying decision. For example, cell phone X has a larger RAM than cell Y, or milk product X has added
vitamin C.
2. Price Differentiation
Using this strategy, businesses try to outpace their competitors by offering their products or services
at a lower price. Price differentiation also uses rebates, discounts, and bonus packages to make
customers believe that they are getting more value for their money.
3. Customer Service
If you operate in an industry that offers little room for innovation or if you don’t want to
compromise on your profits by lowering the price, you may differentiate yourself by offering
unsurpassed customer service. This is a particularly effective differentiation strategy in today’s era where customers have become well-informed and want businesses to offer customized products or services.

Final Thoughts
Remember that your product differentiation should not be a knee-jerk response to what your
competitors are doing. Instead, it should be based on thorough research and have a long-term

If you want to learn more about developing a product differentiation strategy, please contact
Creative Marketing Nerds at 432 363 4235.

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