Product Differentiation

3 Parts of Effective Product Differentiation

How to Successfully Differentiate your Products and Services

Properly defined product differentiation is vital to allowing your company to take full advantage of everything that it has to offer and reach its best potential. In fact, being able to define yourself as unique from the competition can often make the difference between the success or failure of a product, service, or a company as a whole. Therefore, it is important for you to understand the main parts of differentiation and put them into practice as much as possible so that your customers and potential customers will know why they are choosing to come to you as opposed to any other business.

Timing

People in general live busier lives nowadays than ever before in the history of humanity. Because of this, they are unwilling to wait for anything. By establishing product differentiation from your competition in terms of timing, you will be showing your customer that you are capable of providing him or her what is needed at precisely the time that is most convenient for him or her. Though this may simply mean that you need to be faster than your competitor, this is not always the case. For example, if materials are ordered for a home decorating or renovation project, this does not necessarily mean that the customer will want them all to arrive right now. Instead, certain materials may not be needed for another few weeks. Should they arrive too early, they risk being damaged or not having a place in which to be properly stored. Instead, the key to proper product and service differentiation in this way is to make sure that the items are provided when the customer wants; not necessarily immediately. Product and service differentiation, in this sense, means that you are offering convenience over the competition and that it will be easier to choose you than it would be to opt for the other guy.

Customizing

When a customer orders a product, he or she often has something in mind. Keeping with the example of the home decorating project, the customer doesn’t just want any throw rug, but wants one that is the perfect size, color and pattern for the room. By being able to offer customizing services, you have achieved differentiation in that you will be able to turn your standard offerings into just what the customer wants. When the customer knows that you are best able to meet his or her needs, then you may be the first choice when it comes time to make the purchase. The more you are capable of understanding the needs of your potential shoppers, the better you will be able to ensure that your products or services meet those needs precisely to the satisfaction of those customers. This provides you with essential competitive strength within your marketplace. Product customization is the easiest in businesses that are primarily service-based. That said, as with the example of the throw rug, a product-based business may also have opportunities to customize and individualize. Moreover, even if the products must be sold as they are, you can still offer to customize in areas such as special price packaging or billing.

Recovery of Cost

Using product differentiation to offer cost recovery doesn’t mean that you will be offering your products or services at the lowest price in your market. Instead, it means that you will be offering the greatest value to your customers so that you have the highest amount of leverage for every dollar that he or she spends. Most customers understand that finding precisely what they want may cost them a little bit more and are often willing to pay a slightly higher amount in order to buy the item that will satisfy them and meet their needs the most effectively. All too often, “cheap” refers not only to the price, but to the lack of quality of the product or its inability to properly fulfill the customer’s needs. Value should be stressed just as much as the actual price tag.

These three crucial parts of differentiation may seem to be merely common sense, but they are missed all too frequently by business owners who are struggling to make – and improve – their position within their market. As you focus on your product differentiation, don’t forget to start with the basics as your strong foundation, and build from there.