A differentiation strategy that focuses on a product’s life cycle can be used by organizations to approach the development, marketing and promotion of a product. Differentiation is one of many strategies used in product management. This strategy helps the organization to distinguish its products from the competition's products.
What is a Differentiation Strategy?
A differentiation strategy focuses on differentiating your product from the others in the market. This aims to highlight the aspects of your product that separate it from the competition. Differentiation relates to the development, planning and marketing of the product. While a business might not have a truly unique product, this strategy allows the business to develop a message about the product for the masses of consumers.
The Product Life Cycle
A product’s life cycle spans the time an average consumer uses the product. For some products, the life cycle is short, such as paper towel. On the other hand, some products such as cars or most electronics have long life cycles. The product life cycle can be affected by a product’s quality. Thus, the life cycle takes into account both how long you can use a product and how well it will function during that time.
A Product Life Cycle Focus
A differentiation strategy that focuses on a product’s life cycle, then, attempts to highlight and sell the quality and durability of the product as a way of separating it from the competition. Such a strategy is generally appropriate for either higher-end or less expensive products in a specific market. This allows the organization to emphasize the additional features of the item that justify the higher price or the cost savings of lower-priced products relative to competing products in the market.
The Life Cycle and Marketing
The higher price tag that often accompanies products associated with a differentiation strategy requires a company to use a specific approach to marketing. In this case, an approach would preferably include emphasis on the high quality and long durability of the product. This allows the company to sell the item’s value even though the item might have a higher cost than the competition. Rather than focusing on a low price or a great bargain, the consumer ideally responds by justifying the purchase because of the quality of the product as emphasized by the differentiation strategy.
- Capstone Manager Guide: Six Basic Strategies
- "Product Lifecycle Management"; Michael Grieves; 2005
Brian Bass has written about accountancy-related topics and accounting trends for "Account Today." He works as a senior auditor specializing in manufacturing and financial services companies for one of the Big 5 accounting firms. Bass hold a master's degree in accounting from the University of Utah.