For example, an organization that indonesian numbers sells shampoos might differentiate its product range as follows:
anti-hair loss shampoos;
from dandruff;
for colored hair;
for dry and normal hair;
against split ends, etc.
Companies that sell products they make themselves can achieve market leadership through differentiation. Many of these businesses focus on producing a limited range of products for a narrow target audience.
Such companies do not sell large volumes, but they form a base of regular customers. These consumers will buy products of their favorite brand even if the price for them becomes higher.
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Vertical differentiation
This differentiation strategy allows focusing on a specific customer need. To satisfy it, the company offers several options. In other words, the product is aimed at a target audience with a specific problem. The consumer can choose from the available offers according to their wishes.
The product does not have any significant differences in quality, composition and purpose. It is assessed by criteria that are secondary for most people. However, the buyer can satisfy his need taking into account his individual preferences.
Types of product differentiation
For example, hair shampoo can be offered to customers in different volumes or weights (regardless of the purpose of the product).
As mentioned earlier, a company can simultaneously use both differentiation options. This will allow it to satisfy the needs of most consumers, expand the product range, and reduce the costs of producing similar products. In addition, it is possible to reduce the costs of organizing storage and sales.
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"Cross-marketing: 5 examples and 8 mistakes"
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Benefits of Product Differentiation
With the right use of the differentiation method, a company can increase sales despite a large number of direct competitors. Let's consider the advantages that an enterprise receives when implementing this strategy:
reduction in the number of direct competitors (companies selling goods with the same characteristics);
strengthening the company's position in the market (even a small enterprise can become a monopolist for its segment of the target audience);
increasing audience loyalty;
reducing pressure from substitute products;
more flexible pricing (the higher the value of the product, the easier it is to set the price);
distinguishing a product from its competitors (it is difficult for consumers to compare a differentiated product with any others).