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Differentiation strategies

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You would want your products to stand out in the marketplace. The question now is, how can you make your products differentiated?

Most businessmen, out of instinct, tend to go for low-price strategies. After all, given a product that does everything that the leading brand does but at a lower price, surely any rational buyer would choose the lower-priced product, right?

No. At least not all the time. Particularly when there is a lot of brand loyalty and the lower-priced product has yet to create trust from the marketplace. Besides, low-price strategies are often counter-productive as businessmen end up practically starving themselves just to make their products stand out.

Therefore, it helps to know just how to differentiate your products, beyond price alone.


First of all, there’s differentiation by quality. And this implies that you would have the insight, the technical means, or the production capability to come up with a product that actually has superior technical specifications as compared to other products in the market. And the assumption here is that the market will be willing to pay for this better quality.

Avoid the trap of providing TOO MUCH quality though! There is no point providing a bottle that can withstand twenty-foot drops when your typical consumer would never drop bottles from a height of twenty feet anyway!


Perhaps you can think of including features that no other product offers. Just make sure that these are features that actually matter to your target market. There’s no point adding a radio to your electric fan if your target market isn’t looking for one anyway.

The best features are borne out of listening to your market. Ask your market what they wish for. Or better yet, get to know your market enough to know what it is that they need – even if they don’t know that they need it yet!


Do not just drop your price for the sake of being cheaper. Sometimes this strategy backfires, particularly when your product becomes perceived as being cheap and inferior.

Instead, see what cost components of your product (or service) can be removed or replaced with little or no impact on its overall perceived quality. Can you substitute a cheaper material for one material and still provide the same overall consumer experience? Then do so. And then pass this cost savings on to your consumers. This gives you a sustainable lower-cost strategy.

Passing on cost savings to your consumers makes more sense than simply dropping your price for no reason at all and inadvertently starving your company in the process!

Augmented services

If you could not differentiate your product via its own tangible merits, then perhaps you can add on to the product and bundle extra services as well.

For instance, providing longer warranty periods can actually help to differentiate your product. You do not change anything tangible on your product itself, but the warranty serves as an added value to your product.

Customer services, such as free alterations when you buy clothes for instance, can also help to add value to your product.

Niche marketing

You can make your products stand out by focusing on the needs of a very specific market niche. For instance, if you are a shoe manufacturer and you focus on the needs of nurses, then you become differentiated by developing a reputation (assuming you do it right) as the most expert makers of nursing shoes.

Choose a segment that is not yet being served specifically. And it should also be a segment that is big enough to provide you with your expected revenues. Done properly, you could build a strong reputation and lock out competition in the process!

These are just some examples of differentiation strategies. The important thing is for you to make sure that any differentiation strategy that you choose can be sustained over the long term. Don’t just differentiate on impulse. Be consistent.

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