Businesses use the marketing strategy of product differentiation to distinguish their own products from those of their competitors. Since the 1980s, Apple Inc. has successfully used product differentiation to separate its products from those of other electronics manufacturers. From its MacIntosh home computers to the iPod music players and iPhone and iPad mobile devices, Apple has employed a differentiation strategy to target a section of the consumer market and send a powerful message that its products stand out from the crowd.
A major aspect of a product differentiation strategy comes from product design. Products that display a different visual style, include different features or handle different tasks stand out from those offered by the competition. Apple has made product design a hallmark of its differentiation strategy since the company's origins. When Apple introduced the iPod, iPhone, and iPad, there were no similar consumer electronics products that included so many features in one distinctive, iconic package.
Another factor in product differentiation plans stems from the company's pricing strategies. Apple Computers co-founder Steve Jobs sought to create a top-notch product with a price proportionate to its level of quality while maintaining high profit margins. The lowest-priced Apple products consistently fall in the mid-range, but customers are willing to pay that price for the high quality of the user experience. This pricing strategy runs counter to makers of commodity laptops, tablets and mobile phones, which sell lower-cost devices and rely on high volumes to counter their slim profit margins. The relatively higher cost of the Apple versions gives consumers a sense of high value and exclusivity for their products.
Apple's pricing strategy extends to its differentiation in the retail electronics marketplace. While users can purchase computers, tablets and mobile phones from nearly any electronics outlet, Apple differentiates itself by providing limited quantities to big box retailers and focusing its retail efforts on its Apple Stores. For its third-party retailers, Apple imposes a minimum advertised price policy to prevent outlets like Walmart and Best Buy from undercutting the prices found at the Apple Stores.
Apple has been among the most successful technology companies in the development of loyalty to a brand. Loyal Apple customers will wait in line to purchase the latest iPhone, download music through iTunes, watch their favorite television shows on Apple TV and play games on their iPads. The company's efforts toward building brand loyalty have allowed Apple to differentiate itself from Microsoft, Samsung and other competitors in its various arenas.
The concept of brand differentiation has allowed Apple to create a virtual split in the world of electronic devices: Apple devices vs. everyone else. It has created a vision of exclusivity that gives Apple a leg up in the market, helping them to keep their products at the top of countless must-have lists every year.