what is product differentiation
Differentiation refers to the design of a series of meaningful differential advantages that differentiate the company's products from those of competitors. Some products, such as rice, gasoline, and pharmaceuticals, have long been regarded as homogeneous by people, and it is difficult to implement differentiation. But this does not mean that these products absolutely cannot be designed for differentiation, because some de facto differentiation has already occurred.
The differences are mainly manifested in the following aspects:
① Product features.
Product features are the additions to the basic functions of a product. In addition to the standard basic functions of the product, the enterprise adds different basic functions to the product according to the different needs of customers. The general manager can understand and understand the differences in customer needs based on interviews and surveys with customers, and make design decisions on product features on the basis of analysis and evaluation. Features are a competitive tool for firm product differentiation.
The three shampoos launched by Guangzhou Procter & Gamble have their own characteristics: Head & Shoulders "eliminates dandruff and makes hair more shiny"; This makes its products a great success in the Chinese market.
② performance quality.
Performance refers to the level at which the main characteristics of the product are in use. When customers purchase products with higher value, they must analyze the price and performance. Customers are always willing to buy products with better performance at a higher price when the price of the product does not exceed the acceptable range of customers. But this does not mean that enterprises must design products with very high performance and quality. Enterprises should determine the appropriate performance standards according to the specific conditions of the target market.
③Consistency.
Conformity refers to the degree to which a product meets design criteria in use. If the products of the enterprise can meet various design requirements in use, the products are considered to have a high degree of consistency. Products with poor or even poor consistency indicate that the product has not met the design standards. Products with a high degree of consistency will leave customers with a perfect product image, and people are willing to buy.
④Durability.
Durability refers to the expected lifespan of a product. Products with a longer service life can be sold at a higher price. In addition to some other features, the service life of a flat-screen color TV is 1.7 times that of a flat-screen right-angle TV, which makes its price higher than that of a flat-screen right-angle TV, and consumers are willing to spend more money to buy it. But for products with a short popular cycle (such as fashion, etc.) and products with rapid technological updates (such as computers, etc.), it is inappropriate to emphasize durability, because no one is willing to pay a high price for products that will soon become obsolete.
⑤ Reliability.
Reliability refers to the possibility that a product can be used normally without failure within a certain period of time. Customers are willing to pay a higher price to buy products with higher reliability, so as to reduce the maintenance expenses incurred due to product failure and avoid the losses caused to the enterprise by affecting the normal production and operation activities of the enterprise. Enterprises that use computer systems for production management have high requirements for computer reliability. They are willing to pay more for increased reliability.
Electrolux, the world's largest manufacturer of white goods, put forward a "zero-defect" competitive strategy, guaranteeing that the product can be used normally within 10 years after it arrives at the consumer's home without maintenance.
⑥ Ease of maintenance.
Ease of repair refers to the ease of repairing a product after it fails. This includes the availability of spare parts needed for repairs, the ease of specific repair work, and the timeliness of providing repair services. If the product is assembled from standardized parts or the wearing parts are standard parts, it is easy to obtain; if the specific repair work is relatively simple, the customer can repair it by himself or through telephone guidance when a fault occurs; if the company can provide timely repair services after the product used by the customer breaks down and minimize the loss of the customer, then the maintainability will be high.
⑦ style and style.
It refers to the visual and sensory effects that the product brings to the customer. Refrigerators have long belonged to the category of white goods, but Haier has launched colorful refrigerators, giving people a brand new feeling. In the differentiation of style and style, attention must be paid to the use of packaging. In terms of daily necessities, packaging has a greater impact on customers' purchasing behavior.
Each of these differences can lead to increased costs for the business. Therefore, companies must choose those that are meaningful and valuable. Product differentiation that effectively differentiates a firm's products from competitors' products.
Philip Kotler pointed out that effective differentiation should meet the following principles:
- Significance, that is, the differentiation can transfer higher value benefits to a considerable number of buyers;
- Clarity, that is, the differentiation is not available in other companies, or it is provided by the company in a prominent and clear way;
- Superiority, that is, the differentiation is clearly superior to other means to obtain the same benefits;
- Communicability, that is, the differentiation is communicable and visible to buyers;
- Not easy to imitate, that is, the differentiation is difficult for its competitors to imitate;
- Accessibility, i.e. buyers' ability to purchase the differentiation;
- Profitability, that is, the enterprise can obtain profits through this differentiation.
Summarize
By selecting and promoting effective product differentiation, an enterprise can establish a unique product image beneficial to the enterprise in the minds of target customers.