If You Haven’t Done So Yet, This is the Best Time to Use Product Differentiation to Grow Your Business
Surely, your business has competition, and they come in various sizes. Although it’s a natural part of running a business, it’s worth noting how you can manage to stand out from the competition, especially with the bigger companies hovering above you like a hawk ready to devour its prey. The answer is simple—apply product differentiation and give your business the leverage it needs in order to compete on a level playing field.
Product differentiation at a glance
A simple product differentiation definition is that it is a messaging and marketing strategy that banks on your product’s special features to attract customers. This means that to give your business the competitive advantage, your strategy is to segment your audience and offer a persuasive message that explains your product’s features and what makes it more special than the others.
Product differentiation, also called Unique Selling Proposition (USP), can also mean creating a specialized product that targets a specific market segment, which can be done in two ways—differentiation and differentiation focus. Differentiation simply means adding specialized aspects with a broad appeal to a product, while differentiation focus means developing an entirely new product that targets a specific niche market.
How can product differentiation benefit your business?
If you are able to execute your product differentiation strategy smoothly, you will reap various benefits, including the following:
1. It attracts attention
This is the foremost benefit of differentiation. It can help your product or service stand out because it highlights its special features, which not many other competing brands have. So, even if your business is only starting, if you have the features your target market is looking for, it will outshine the others.
2. It shifts the focus from price to value
It’s natural for customers and clients to always consider the price. However, it is not the only aspect through which you can compete. When they see the value of your product or service, which they can’t get from other brands, they will understand that good things come with a price. Therefore, you don’t have to sacrifice making profits just to get customers to buy your product.
3. It enhances brand loyalty and brand awareness
If your product delivers its promise and addresses a specific product without any hitches, it will become a permanent solution for your customers. This, therefore, enhances brand awareness and brand loyalty, wherein your customers will stick to your product no matter what.
Risks of product differentiation
Though product differentiation is a good marketing strategy, there are also risks that come with it. It’s important to take note of them and have control over the risks.
If you have a product or service that’s thriving in the market and is easy to replicate, you might have copycats watching your move. So, to keep this from happening, you need to design your product to be unique and proprietary.
2. Price undercutting
Some competitors will do anything to steal your customers, and you need to be careful with them. If they can’t replicate your product or service, they’ll find a way to undercut the price. This is especially possible with bigger companies who can afford to buy their raw materials in bigger bulks to reduce costs.
3. Changing customer demands
Because customers have ever-changing demands and expectations, they will continue to find the best product that they can get for the most reasonable price. This means that you need to constantly innovate your products to keep them from becoming obsolete. You need to design it in a way that can support your customer’s changing needs.
Important Tips for Product Differentiation
Though it’s hard to give a one-size-fits-all advice when it comes to making your unique selling proposition, the following tips can help you achieve brand awareness and help attract customers.
1. Focus on specific areas
When designing or repackaging your product, you should remember to focus on these two areas:
- Details. Check and recheck your product details and try to find something that you can add, which your competitor has not yet used. To do this effectively, try to step into your customers’ shoes and identify what they need. For example, if the nature of your business is a sports apparel, then you can include a detail in your biker’s shirts that describes detachable sleeves for hot and humid days. However, do be sure that it’s unique and that your competitors haven’t used it before.
- Packaging. Packaging can make or break your product. It’s actually the first thing customers notice. So, don’t skimp on the packaging but design it in a way that is both pleasing to the eyes and utilitarian at the same time.
2. Offer great customer experience and service
You will never go wrong with going back to the basics. If you have an app, website, or social media accounts, do make sure that these offer a great customer experience through fast loading times, strong customer support, updated products and services, and a quick and easy check-out process.
3. Make no less than quality and lasting products
This is another very basic and obvious tip for successful and effective product differentiation. Your attractive packaging and details won’t count at all if your products don’t last. Customers are looking for value for their money, which you can give through long-lasting, quality products.
4. Don’t skimp on research
Research is an important tool for out-showing your competitors. You have to know their strengths and weaknesses by doing a competitive analysis.
5. Bank on customer feedback
If you want to know what your customers want, listen or pay attention to their feedback. When they leave comments on your page whether good or bad, take the time to read it and analyze how you can address their concerns and make their experience better. However, you should also remember that winning through product differentiation takes a bit of time. As they say, ‘good things take time’.
Do these tips, and your journey to positioning your products and brand in your chosen niche starts.
Let's learn more insights like this
We are committed to sharing useful content, tips and insights for the ecommerce industry. Sign up below to get more valuable content straight to your email.
Writer, blogger, software reviewer.