In this scenario, it might be wise to test various differentiation strategies to see if one message resonates with one demographic while another brings leads in from a totally different demographic. The Disadvantages of Differentiated Marketing. Product differentiation occurs on two clear levels: vertical and horizontal. How is Express Oil Change being positioned relative to other firms, such as Super Lube, American LubeFast, and Jiffy Lube? Advantages and Disadvantages of Product Differentiation. In order for a company to convince consumers that its product includes unique features, it needs to communicate this information to the consumers. Meanwhile, few businesses had the skills to fix their own mainframes.

Firms that compete on uniqueness and target a broad market are following a differentiation strategy. Efficient delivery of services can be a good differentiation strategy as this will earn the business customer loyalty ensuring the customer will purchase goods from the business again thus resulting in improved profits.

It creates additional value. Seven decades later, the Coleman Stove remains a must-have item for campers. hbspt.cta._relativeUrls=true;hbspt.cta.load(53, '08b5e1f4-5d26-405b-b986-29c99bd0cb14', {}); Product differentiation refers to the strategy used by businesses to highlight the unique features and benefits of its product or service to separate it from competitors. Good customer relations is a major differentiation business strategy in the service industry. Advantages and Disadvantages of Product Differentiation.

The franchise player: An interview with Don Larose. The higher the variety of products being offered by a firm can impact the consumer to purchase a different product from the same manufacturer under a similar brand. A differentiation strategy allows companies to communicate the unique features of their products and create a niche for the product. In 2007, department store Dillard’s stopped carrying men’s sportswear made by Nautica because the seafaring theme of Nautica’s brand had lost much of its cache among many men (Kapner, 2007). We think incentives are very important. The differentiation and cost leadership strategies seek competitive advantage in a broad range of market or industry segments. A company having a better product compared to its competitors can carve out its place in the business community. And they'll be more likely to choose your product over the competition. The company works with high-profile athletes to wear and promote Nike apparel. This helps the company develop a strong brand that potential customers will recognize. FedEx and Nike are two other companies that have done well at communicating to customers that they provide differentiated offerings.

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