Marketing

To Build Competitive Advantage into Your Marketing Plan – Differentiation in Marketing Examples

The marketing mix section of your marketing plan contains four elements: product, price, promotion, and place (also known as a distribution). Product always needs to be considered first because the other three elements depend on the decisions you make for your product.

It is critically important that you understand the need to differentiate your product from all the other products out there (product in this context is interchangeable with service). If you don’t differentiate your product, how will your customers find it in the overcrowded market?

Product differentiation means finding, or building, the unique value your product has to your customers. Unique characteristics could include specific services that competitors would have difficulty copying: such as door-to-door same-day delivery of your product(if your warehouse is located in town and their warehouse is out of town, you could win on this differentiation point). Unique characteristics could also focus on the specific features, advantages, or benefits of a product: in the early days of flat-screen televisions, the size and number of pixels were a huge quality differentiator.

But recognize that whatever you develop as a unique point of differentiation, it will often be copied (quickly) by competitors eager to gain your market share (just like those flat-screen televisions noted above – the standard now is 4 different sizes, maximum pixels; now how do they differentiate?). You need to keep at least one step ahead of your competition and ensure that your product evolves, that new points of differentiation are developed, and that you continually assess your product and its market.

How do you do this?

  • Ask customers for feedback on your product. Does it meet their basic needs, their expected needs, and their desired needs?
  • Ask them for a prioritized ranking of new products they might want to buy.
  • Ask customers what new features and benefits they would like to see added.
  • Ask them how your product compares against its competition: ask them to define the strengths and weaknesses of each company’s products, including yours.

Use an online survey (which can be set up to be anonymous) or send your salespeople out to ask questions and bring back answers.

Before you make decisions based on the data you have collected, understand how your industry can influence product differentiation decisions. For example, if you sell in a large volume industry being a low-cost supplier is key; if you sell in a niche industry you can focus your differentiation on niche applications of your product; if you sell in a new industry, you will have the opportunity to define your differentiation plan – don’t put all the special, unique characteristics into the product at the early stage, create the product to be able to deliver stages or levels of differentiation as it moves through its life-cycle (introduction, growth, maturity, and decline). Several other different industry ‘types’; understand what your industry is and what your market environment is before you make product differentiation decisions.

Then, act on the information you collected during your question asking phase and, most importantly, tell your customers that you are using their feedback. Know that their participation in the survey and/or discussions helped to create a better product. Also, use the knowledge you have of your industry to create change in your products and services. Build product differentiation plans into your marketing plan so that you can gain a competitive advantage.