What are the 4 characteristics of product differentiation?

What are the 4 characteristics of product differentiation?

Features: Features like size, shape, ingredients, origin, etc. differentiate products in the same price spectrum. They also help the brand to back their high pricing decisions. Performance & Quality: A good quality product always stands out from standard quality products.

What is the product differentiation strategy?

Product differentiation strategies are the well-thought out and purposeful set of actions you take to highlight aspects of your product or service that are unique and most relevant to your customer.

What is the best example of product differentiation?

An example of product differentiation is when a company emphasizes a characteristic of a new product to market that sets it apart from others already on the market. For example, Tesla differentiates itself from other auto brands because their cars are innovative, high-end, and battery-operated.

What are the tools of product differentiation?


  • VERTICAL DIFFERENTIATION. Vertical differentiation concerns distinguishing a product based on a single characteristic where the customer is clear on its quality.

What is the definition of product differentiation?

Product differentiation. In economics and marketing, product differentiation (or simply differentiation) is the process of distinguishing a product or service from others, to make it more attractive to a particular target market. This involves differentiating it from competitors’ products as well as a firm’s own products.

What is production differentiation?

Production Differentiation. Production Differentiation, or brand identification, creates a barrier by forcing entrants to spend heavily to overcome customer loyalty.

What do companies use differentiation?

When used as part of a larger competitive strategy, differentiation can be essential in propelling a company to the next level of growth. There are several elements of differentiation: pricing, product and organization. Pricing is the function of income and profit – the determining factor in the support of the organization.

What are the disadvantages of differentiation strategy?

Disadvantages of differentiation strategy Other firms may out differentiate the existing firms by introducing better unique products into the market. Difficulty in the pricing of goods that are not new into the market.

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