Horizontal differentiation
Posted: Sun Dec 22, 2024 8:19 am
Using this method, a company can identify a target audience segment with different needs and offer a specific product to each group.
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.
Increase Your Profits by 10X: 5 Key Metrics You Must Track
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
After working with over 300 online projects , I can guarantee: monitor these metrics weekly and your company will not only survive, but also increase its profits by 10 times!
In the context of sanctions and crisis, knowing the ROI of your advertising decides whether your business will be successful. Tracking these 5 critical indicators is the key to your prosperity.
What you get for free:
5 Key Metrics to Increase Profits by 220%
Advertising Channels Efficiency Calculator: Optimize Your Budget and Increase ROI by 70%
A Killer Commercial Proposal Template That Increases Conversion to Deals by 60%
We have prepared all the documents and templates with formulas for you. And yes, it is FREE:
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153115
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.
Read also!
"Cross-marketing: 5 examples and 8 mistakes"
Read more
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).
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.
Increase Your Profits by 10X: 5 Key Metrics You Must Track
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
After working with over 300 online projects , I can guarantee: monitor these metrics weekly and your company will not only survive, but also increase its profits by 10 times!
In the context of sanctions and crisis, knowing the ROI of your advertising decides whether your business will be successful. Tracking these 5 critical indicators is the key to your prosperity.
What you get for free:
5 Key Metrics to Increase Profits by 220%
Advertising Channels Efficiency Calculator: Optimize Your Budget and Increase ROI by 70%
A Killer Commercial Proposal Template That Increases Conversion to Deals by 60%
We have prepared all the documents and templates with formulas for you. And yes, it is FREE:
Download documents for free
Already downloaded
153115
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.
Read also!
"Cross-marketing: 5 examples and 8 mistakes"
Read more
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).