Differentiation on the vertical plane
Customers select a product by ranking their options from best to worst based on an objective metric such as price or quality. Although the metrics are objective, the value assigned to them by each consumer may differ. One meal at a restaurant, for example, may contain fewer calories than another. The lower-calorie meal symbolizes a “better” option for a consumer who is controlling their weight. A different consumer may place a larger importance on pricing and choose for the higher-calorie meal if it is less expensive. Differentiation on the horizontal plane
Customers pick between products subjectively because there is no objective assessment to distinguish between excellent and worst. This is known as horizontal differentiation. For example, there is no way to rank ice cream flavors qualitatively. It’s simply a matter of personal preference whether one choose for chocolate, vanilla, or strawberry. When most products on the market are priced similarly and share many of the same characteristics or attributes, the purchase decision is based on personal preference. Differentiation on the mixed plane
Customers making more sophisticated purchases are more likely to use a combination of vertical and horizontal distinction. Assume an individual in the market for a new vehicle. Consider two four-door sedans from two different manufacturers that are both reasonably priced. To decide, the individual almost certainly employ mixed differentiation. Gas mileage and safety rating are two objective measurements used to separate them vertically. Horizontal differentiation, or the distinction between subjective preferences such as design aesthetics and the perception of a car brand, is equally important in selecting. Customers will evaluate the combination of these qualities differently depending on how they differentiate horizontally and vertically
Product Differentiation Strategy
A good strategy for product differentiation can gain brand loyalty, which is essential for successful businesses. This strategy concentrates on a buyer’s value perception. The customer base remains strong if the seller continues to deliver a high quality. There are few strategies discussed as follows:-
Product differentiation – Creating a product with improved properties, performance or efficiency, this differentiation is very easy to copy and often very short-lasting by individual’s competitors.
Service differentiation – This not only includes delivery and customer service, but also all other corporate supports, including training, installation, and ease of order.
Range diversification – The chosen distribution channels can offer coverage or access, instant access and easier ordering, and higher customer or technical levels of service.
Relationship differentiation – Company personnel are an often-neglected way of differentiating. Customer interaction staff, associates or team members can supply and showcase their expertise, civility, integrity, trustworthiness, and responsiveness.
Company personnel is an often-neglected way of differentiating. Customer interaction staff, associates, or team members can supply and showcase their expertise, civility, integrity, trustworthiness, and responsiveness.
Types of Product Differentiation
Ideally, a plan for product differentiation should show that the product can make every competitive decision but that this product has an extra benefit. Below are some of the most prevalent ways for distinguishing a product or service:-
Price differentiation – Price may be used in two ways to distinguish a product. The store, Costco is an example. Companies may charge the lowest price in comparison to competitors for cost-conscious purchasers. Companies can, however, also charge high costs for quality and luxury or top-grade goods, such as a Bugatti sports vehicle
Reliability and performance – The dependability and durability of products might be distinguished. For example, certain batteries have a longer life reputation than other batteries, and this element is what buyers will buy.
Service and location – By stressing their support to the local community, smaller firms may distinguish themselves from their bigger national competitors. For instance, a local restaurant will recruit and may provide local farmers and suppliers with their food and ingredients.
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