Product Differentiation Strategy

by Laura Acevedo; Updated September 26, 2017

Successful companies strive to distinguish their products from competitors through differentiation strategies. In an often crowded product market, customers crave product distinctions to help them make purchasing decisions. By offering greater values, customization features and convenience options, you can influence a customer to purchase your products. The best product differentiation strategies increase your brand image, cater to customer preferences and increase sales.

Customization

Offer customization options for your products to set them apart from generic competitor offerings. Savvy consumers research their purchases and know what components and features they want prior to making a purchase. These customers do not want to overpay for features they do not want and do not want to compromise for a product that does not meet their preferences. Allow customers to tailor your products to their desires. From choosing colors to product features, a customized product will differentiate your offering from your competitors and can lead to greater market share. Consider integrating customization options into your website for maximum benefit. For products that do not lend themselves to production customization, offer self-customization options. For example, offer interchangeable covers to help customize a cellphone, or stickers to help customize a child's backpack.

Convenience

Position your products for customer convenience as a differentiation strategy. Offer multiple shipping options that cater to customers' schedule and preferences. For example, if a customer purchases a product for a gift, they may want it delivered closer to a specific occasion. Customers will appreciate your ability to deliver on their preferred schedule, which can increase customer loyalty.

Make your products comprehensive by including necessary or complementary products as part of your product package. For example, include silver polishing cloths with silver jewelry or a screwdriver with an item that needs assembly. If you include items that make using your product more convenient for your customer, you will distinguish your products from similar product offers.

Value

Differentiate your products by providing the highest customer value. Offer features that higher priced competitors offer on their products, but at a lower price point. This differentiation strategy does not mean to compete with generic or low-priced products, but rather provide customers with the best overall value out of all your product competition. Consider using promotions to increase value-based differentiation. Use buy-one, get-one free offers, free add-on products, increased size offers and immediate-use coupons. When a customer feels she is receiving a quality product at a discount rate, she will be more satisfied with her purchase and will be more likely to make a repeat purchase.