Product Differentiation
Product differentiation is an effective marketing strategy that solely focuses on highlighting the differences between the company's product or business from that of its competition. It basically answers the question "When a consumer is offered so many choices these days, why should he pick the company's product over all the other products?"
If the company can show to the public what makes its product different, then it has opened the door to them showing that is product is unique or better in some way. The differentiated product's image would generally promote brand loyalty and allows the company to create a competitive advantage over its competitors. This is very important and crucial if company hopes to gain and sustain a significant share of the market. There are ways to differentiate a product from others such as on basis of physical characteristics, warranty, service, location etc
Examples
Sneakers, initially were inexpensive canvas shoes that had rubber soles that were little different from other brands. However , they did realize the need to differentiate its products and as a result now there are tennis shoes, football shoes, basketball shoes, and other sport shoes made of different materials and with many special features. As sneakers added features such as pumps, lights etc, prices did increase and price differentiation across different branded shoes has grown.
Similarly, we have nonprescription sunglasses, that were nearly homogeneous products earlier. However they have been "sneakerized" in recent past. Now we have fashion and premium sunglasses, that vary by feature and these account for almost half of the market. Other industries have also capitalized on the trend. Now, Sony makes 100 different kinds of Walkman devices and Phillips produces 800 models of color televisions.
USP (Unique selling Proportion)
USP is defined as the Real or perceived benefit of a good or service that differentiates it from the competing brands and gives its buyer a logical reason to prefer it over other brands.
A unique selling proposition is basically what a business stands for. It’s what that sets one's business apart from others. USP is often the critical component of a promotional theme on whose basis an advertising campaign is built. The factor or proposition presented by a seller as the reason why his product is different from and better than that of the competition.
The key to effective selling is what advertising and marketing professionals call a "unique selling proposition" (USP). Pinpointing your USP requires some hard soul-searching and creativity.
Examples
Charles Revson, founder of Revlon, has always stated that he sold hope, not makeup. Some airlines sell friendly service, while others sell on-time service. Neiman Marcus sells luxury, while Wal-Mart sells bargains.
Another best example would be of Starbucks is another successful business that makes for a great case study on unique selling propositions. They went from a small coffee shop in Washington to one of the most recognized brands in America.They don’t stand for premium coffee beverages AND the lowest prices. If they did, they wouldn’t stand out from corner gas stations. Because they take a stand to provide premium coffee, they stand out from the corner gas stations that sell cups of coffee for $0.99. If they instead tried to compete head to head with gas stations on price, quality would suffer, and their product wouldn’t be unique. They wouldn’t be able to stand for premium coffee.They also don’t stand for premium coffee AND gourmet breakfast sandwiches AND the most amazing smoothies AND the best prices. Yes, they’ve offered those products in different forms for different periods of time, but that’s not what they stand for. They’re not trying to be known as the amazing coffee, sandwich, AND smoothie place, and they’re not trying to compete head to head with McDonalds or Jamba Juice. Instead, they’re the convenient premium coffee cafe that happens to also sell breakfast sandwiches and smoothies if you want one while you’re picking up your delicious coffee.
Product differentiation is an effective marketing strategy that solely focuses on highlighting the differences between the company's product or business from that of its competition. It basically answers the question "When a consumer is offered so many choices these days, why should he pick the company's product over all the other products?"
If the company can show to the public what makes its product different, then it has opened the door to them showing that is product is unique or better in some way. The differentiated product's image would generally promote brand loyalty and allows the company to create a competitive advantage over its competitors. This is very important and crucial if company hopes to gain and sustain a significant share of the market. There are ways to differentiate a product from others such as on basis of physical characteristics, warranty, service, location etc
Examples
Sneakers, initially were inexpensive canvas shoes that had rubber soles that were little different from other brands. However , they did realize the need to differentiate its products and as a result now there are tennis shoes, football shoes, basketball shoes, and other sport shoes made of different materials and with many special features. As sneakers added features such as pumps, lights etc, prices did increase and price differentiation across different branded shoes has grown.
Similarly, we have nonprescription sunglasses, that were nearly homogeneous products earlier. However they have been "sneakerized" in recent past. Now we have fashion and premium sunglasses, that vary by feature and these account for almost half of the market. Other industries have also capitalized on the trend. Now, Sony makes 100 different kinds of Walkman devices and Phillips produces 800 models of color televisions.
USP (Unique selling Proportion)
USP is defined as the Real or perceived benefit of a good or service that differentiates it from the competing brands and gives its buyer a logical reason to prefer it over other brands.
A unique selling proposition is basically what a business stands for. It’s what that sets one's business apart from others. USP is often the critical component of a promotional theme on whose basis an advertising campaign is built. The factor or proposition presented by a seller as the reason why his product is different from and better than that of the competition.
The key to effective selling is what advertising and marketing professionals call a "unique selling proposition" (USP). Pinpointing your USP requires some hard soul-searching and creativity.
Examples
Charles Revson, founder of Revlon, has always stated that he sold hope, not makeup. Some airlines sell friendly service, while others sell on-time service. Neiman Marcus sells luxury, while Wal-Mart sells bargains.
Another best example would be of Starbucks is another successful business that makes for a great case study on unique selling propositions. They went from a small coffee shop in Washington to one of the most recognized brands in America.They don’t stand for premium coffee beverages AND the lowest prices. If they did, they wouldn’t stand out from corner gas stations. Because they take a stand to provide premium coffee, they stand out from the corner gas stations that sell cups of coffee for $0.99. If they instead tried to compete head to head with gas stations on price, quality would suffer, and their product wouldn’t be unique. They wouldn’t be able to stand for premium coffee.They also don’t stand for premium coffee AND gourmet breakfast sandwiches AND the most amazing smoothies AND the best prices. Yes, they’ve offered those products in different forms for different periods of time, but that’s not what they stand for. They’re not trying to be known as the amazing coffee, sandwich, AND smoothie place, and they’re not trying to compete head to head with McDonalds or Jamba Juice. Instead, they’re the convenient premium coffee cafe that happens to also sell breakfast sandwiches and smoothies if you want one while you’re picking up your delicious coffee.
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