Let us suppose that your company is planning to launch a new flagship product this New Year. You have done all the planning as to how the production will proceed, you have dedicated teams for the particular product, all the research has been done and has been giving positive, and you have even started out with marketing it. The only thing that seems to be missing in this all good set of affairs is product differentiation.
Product Differentiation by definition is a strategy or a process that you entail in order to make your product more appealing to your target audience and consumers than the other competitive techniques, this article is dedicated to telling you about the importance of Product Differentiation.
1. Creates Values
Said to be amongst the most important characteristics of product differentiation, if and when a company chooses to highlight the cost valuation of their product against similar products of other companies, it creates a value of the product all by itself in the eyes of the audience which engages the target customer base as well as creates new potential customers out of those which are not on your target list. A strategy highlighting the cost saving factors of a product has long been a hit in product differentiation techniques.
2. Brand Loyalty
It might be big claim to make in the current financial circumstances of the world in general, but product differentiation techniques can even create brand loyalty amongst the customer the company has previously served or even going to serve. A good product differentiation technique highlighting the benefits and cost effectiveness of the product will make the customers believe about the quality of the product and this will make them buy the product again. The only thing that should be remembered while building Brand Loyalty is that the actual quality of the product should never be compromised or all the product differentiation techniques will be of no use.
3. Perception of no Substitute available on the Market
A good product differentiation strategy has the potential to make the customers perceive and feel that there is no viable substitute available in the market. When focusing on the quality and design aspects of the product, you might come up with strategies that highlight the qualities in design that your product has but other competitors lack, this will allow you to bypass any other product in the minds of the customer and will make them think that there is no other product in the market except yours which is worthy spending money on.
4. Non Price Competition
Certain Product Differentiation techniques if implemented correctly may even allow you to compete with other products in areas other than price. For example if we take the example of a mobile phone, you might be able to highlight the feature of your product which are more appealing to the customer than the discussion of price and they might become ready to buy it no matter the price. The best example of such thing is one of the biggest mobile phone sellers Apple which never differentiates its products in the area of price.