Price! No, Product Differentiation

Price! No, Product Differentiation

differentiationBusinesses are working in very competitive environment.  Some companies have tried to use price as a way to differentiate their products or services.  They compete by offering more than the competition for a higher price, for the same price, for a lower price, or offer them less value for a lower price. All of these options can give you an edge, temporarily and only for short-term.  But price differentiation alone rarely serves as a long-term strategy.  A marketing strategy is often about how to secure first choice for your offer over that of the competitions. Strategy is the way by which you plan to achieve an advantage over your rivals from the eyes of your target market.  The key to creating preference is differentiation, by either doing something other than what your competitors are doing or by doing things different and only one of its kinds.

Differentiation is very necessary whenever the target people have options from which to choose. By having the right meaningful point of differentiation, you provide your targets with a good reason to utilize your product or service more, to choose you over an alternative.  The alternatives would have a certain amount of attribute that would offer features and functionality for what matters most to the target market. Go back to your memory and think about the last time you purchased a pen, cloth, computer, or even a car.  For the most part, pens or computers, for example, are pretty much the same on their functionality. Nevertheless we all make choices based on some perceived advantage.

Strategic differentiation provides a long-lasting, sustainable advantage and is a key to having a competitive strategy. To do strategic differentiation you will need to have a solid knowledge on the target market with the greatest potential for buying your product or service and what you can offer them that would help you realize that potential.

With differentiation, you will succeed in creating strategic sustainable advantages that the target market thinks that you are irreplaceable. And this is what becomes the heart of your brand strategy the unique and defined experience or benefit obtainable solely through consuming, owning a specific product or service offered by your company.

In the end, I hate to tell you if your product, service, or program is not differentiated, then your competitors are not going to just sit around while you gain market share. But remember; only a competitively differentiated product will help you win.

 

Talal Al-maghrabi

CBA Faculty Member

MBA – Marketing & MIS

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