Product & Service Differentiation

Strategy of product and service differentiation...

As we look further into various aspect of evolving business strategy, making a product or service distinct from competitors in the eyes of customers are critical for long term business survival. Product differentiation is a marketing strategy that involves making a product distinct from competitors in the eyes of customers. This differentiation can be achieved through various means, such as unique features, quality, branding, or customer experience.

Some of the frequently considered path to differentiation are

​Features: Companies can differentiate their products by adding new features or improving existing features. For example, Samsung differentiates its smartphones by including features such as a stylus, foldable display, and water resistance.

Quality: Companies can differentiate their products by using high-quality materials and construction methods. For example, BMW differentiates its cars by using high-performance engines, luxurious interiors, and advanced safety features.​

​Design: Companies can differentiate their products by having a unique and eye-catching design. For example, Dyson differentiates its appliances by having a sleek and futuristic design.

​Brand: Companies can differentiate their products by building a strong brand reputation. For example, Tiffany & Co. differentiates its jewelry by its luxury brand image and iconic blue box packaging.

​Service: Companies can differentiate their products by providing excellent customer service. For example, Zappos differentiates itself by offering free shipping and returns, as well as a generous return policy.

• Apple iPhone: Apple differentiates its iPhone with a combination of sleek design, user-friendly iOS, a strong app ecosystem, and a focus on innovation. Features like Face ID, Retina display, and the seamless integration of hardware and software set it apart from competitors.

• Mercedes-Benz: Mercedes-Benz differentiates its luxury cars through a reputation for quality, cutting-edge technology, and a strong emphasis on safety. Features like the Pre-Safe system, advanced driver assistance systems, and high-end materials contribute to its differentiation.

• Starbucks Coffee: Starbucks differentiates itself with the quality of its coffee and the overall coffeehouse experience. Customizable drinks, free Wi-Fi, and cozy store environments create a unique customer experience.

• Dyson Vacuum Cleaners: Dyson differentiates its vacuum cleaners by focusing on innovative technology and design. Cyclone technology, cordless operation, and modern aesthetics set its products apart in the market.

• Tesla Electric Cars: Tesla differentiates its electric cars through a combination of cutting-edge electric propulsion technology, impressive range, autonomous driving features, and an emphasis on sustainability.

• Coca-Cola: Coca-Cola differentiates its carbonated soft drinks with a unique and secret formula, a recognizable brand, and a classic taste. Its branding and marketing efforts make it stand out in a competitive beverage market.

• TOMS Shoes: TOMS differentiates its shoes through its "One for One" giving model. For every pair of shoes purchased, TOMS donates a pair to a person in need. This socially responsible approach sets it apart and appeals to socially conscious consumers.

• Patagonia Outdoor Apparel: Patagonia differentiates its outdoor apparel by focusing on sustainability and ethical manufacturing. The company's commitment to environmentally friendly materials and fair labor practices appeals to environmentally conscious consumers.

• Whole Foods Market: Whole Foods differentiates itself as a natural and organic grocery store. It offers a wide selection of organic and locally sourced products, emphasizing health-conscious and environmentally responsible choices.

• Netflix: Netflix differentiates its streaming service through its vast library of original content, personalized recommendations, and the ability to binge-watch entire seasons of TV shows. It has revolutionized the way people consume entertainment.

• Gillette: Gillette differentiates its products through its high-quality razors and blades, as well as its innovative shaving technology. For example, the Gillette Fusion ProGlide razor is differentiated from other razors by its five blades, flexible head, and lubricating strip.

Service differentiation involves making a service stand out from competitors by offering unique features, quality, or customer experiences. Here are examples of service differentiation:

• Ritz-Carlton Hotels: Ritz-Carlton differentiates itself through impeccable customer service. Their "Gold Standards" include personalized greetings, a "ladies and gentlemen serving ladies and gentlemen" motto, and a strong commitment to meeting customer needs.

• Zappos: Zappos, an online shoe and clothing retailer, differentiates itself through exceptional customer service. They offer free shipping and returns, a 365-day return policy, and a call center that focuses on delivering outstanding customer experiences.

• Amazon Prime: Amazon Prime differentiates its e-commerce service by offering free two-day shipping on eligible items, access to Amazon Prime Video and Prime Music, and exclusive deals for its members.

• Walt Disney World Resort: Disney differentiates its theme park service with immersive experiences, exceptional customer service, and attention to detail. Their focus on creating magical moments for visitors sets them apart.

• Southwest Airlines: Southwest Airlines differentiates its service through a focus on low fares, friendly and personable flight attendants, and a customer-first approach. They also offer no baggage fees and no change fees.

• Chick-fil-A: Chick-fil-A differentiates its fast-food service through a commitment to customer satisfaction and unique menu items like the original chicken sandwich. They are known for their polite and efficient service.

• Wegmans: Wegmans, a supermarket chain, differentiates its service through exceptional store layouts, a wide selection of high-quality products, knowledgeable and friendly staff, and an emphasis on customer experience.

• FedEx: FedEx differentiates its package delivery service by offering guaranteed, time-definite deliveries, package tracking, and a focus on reliability and efficiency.

• Hilton Hotels: Hilton differentiates its hotel service through loyalty programs like Hilton Honors, personalized service for frequent guests, and a range of amenities and room types to cater to diverse customer needs.

• Four Seasons Hotels and Resorts: Four Seasons differentiates its luxury hotel service through a focus on exclusivity, exceptional service, and customized experiences tailored to each guest's preferences.

As these examples illustrate, differentiate your products and services through various strategies, including technology, quality, branding, sustainability, social responsibility, and unique customer experiences. Effective differentiation ultimately gives customers compelling reasons to choose a company's offerings over the competition. The strategy should build on unique strengths of the business.

Sash Barige

Mar/05/2018

Further read:

• Product Differentiation: What It Is, How Businesses Do It, and the 3 Main Types (Investopedia)

• How Product Differentiation Affects Online Shopping (SpringerLink)

• Product Differentiation: The Key to Success in a Competitive Marketplace (Forbes)

• 5 Ways to Differentiate Your Product from the Competition (HubSpot)

• Product Differentiation Strategies: How to Stand Out from the Competition (Shopify)

• Product Differentiation: What It Is and Why It's Important (Small Business Trends)

• The Balance Small Business: Service Differentiation: What It Is and Why It's Important

• Net Promoter: 5 Examples of Service Differentiation

• Freshdesk: 7 Ways to Differentiate Your Customer Service

• Small Business Trends: 7 Examples of Service Differentiation