Why Product Differentiation is Important for Your Brand

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Product Differentiation

To maintain the reputation of your business, it is crucial to provide value to your customers. While email marketing and after-sales services are going mainstream to attract customers from all corners of the world, the key to communicating the value with your target audience is product differentiation.

Even though you do not have a monopoly, you cannot ignore featuring your product or service different from your competitors. Product differentiation is a strategy of representing unique features of your product or service to separate it from your competitors.

If you do not highlight unique features, your customers will not be interested in your brand. Your competitors have been on the market before you, so people will likely trust them and hardly bother to choose you over them to buy the same product.

Although more or less the same products or services are sold, product differentiation is crucial to maintain your brand image. People will get to learn from that uniqueness. This strategy helps grab the attention of targeted people.

In order to differentiate your product from competitors, you need innovation, extensive research, marketing and sales strategies, and resources to create a high-end product. Of course, this will require you to spend a lot of resources. In case of an insufficient cash reservoir, you can take out small money loans in Ireland. These loans can help you meet the shortage without incurring a lot of costs. However, you should still be cautious while borrowing money.

Product differentiation factors

Features are just one way to differentiate your product or service from your competitors, but this is not the only way to do so. It depends on the strategy and your market research which factor you choose for it. There are specific areas to focus on when it comes to differentiating a product from competitors.

  • Pricing

Compare pricing with your competitors. Find out whether your product is cheaper or more expensive compared to the value they offer. It does not mean that you will quote lower prices because it ultimately depends on the cost of manufacturing and your profitability goals.

Even if you sell your product at a higher price than your competitors, you will have to justify the pricing with the quality you are offering.

  • Quality

It is also an important factor in differentiating your product from those of your competitors. It can be in the form of durability, additional features, and the like. Quality can also affect the pricing of your product. Of course, it will be higher when your product is better than your competitors.

  • Design

You can also differentiate your product by creating a new design. Is your product’s design user-friendly? Is it easy to use? Does it have an appealing design? Does it make your product more compact?

  • Service

Another important factor is service. Do you provide after-sales services? Do you offer round the clock services? You will have to measure your services with your competitors to find out how it is better.

  • Customisation

Are you able to tailor your product to the needs of your customers? If you have additional features, do they meet their expectations?

Types of product differentiation

Product differentiation generally has two types: horizontal and vertical. However, a customer can use a mix to determine whether or not to buy.

  • Vertical product differentiation

It is based on two measurable factors pricing and quality. It depends on customers whether they want a top-notch product or they want to choose the one with the least price.

Some customers may be bold to pay more to get quality, while some are price sensitive. Examples include buying generic products vs branded products and buying android phones vs Apple iPhones.

  • Horizontal product differentiation

It refers to immeasurable factors like personal preferences. This typically occurs when the prices of the product are almost the same, for instance, whether you order pizza from PizzaHut or Domino’s. It is all about personal preference.

Benefits and drawbacks of product differentiation

It is vital to pursue a product differentiation strategy, but it has its own pros and cons.

  • It ensures additional value

It will help provide additional value to your target customers. By differentiating your product, you will be able to create a brand value. You can stand out from your competitors.

Your marketing and sales strategy will likely give more leads, especially when your users want to avail of features and benefits exclusively provided by you.

  • It develops brand loyalty.

When your products and services are able to offer unique features to your customers, they will immediately identify them when they see them on shelves. Unique features that you offer to your products will differentiate your brand, and this will help improve loyalty.

  • It helps beat the competition.

Another benefit of the product differentiation strategy is that it helps beat the competition. When you add new features to your products and services, you strengthen the competition.

  • It may not guarantee revenues.

Although a product differentiation strategy can stand you out from competitors, it does not guarantee increased revenues. Your customers may not find value in your product, and they may not be interested in buying your product.

For instance, if providing additional features has increased the cost of the product, but your customers do not find it worthwhile, they will opt for a cheaper product.

  • It may be expensive.

This strategy involves a lot of time, research and other resources. It can be undoubtedly expensive. Although you can borrow from private money lenders in Ireland, it may not be a feasible option all the time.

The bottom line

Product differentiation strategy is vital to set yourself apart from your competitors, but you cannot just rely on it for revenues. You will have to see other factors too.

Your customers’ needs and buying behaviour are essential to decide if added features will likely help attract them. It is not an overnight process. This requires extensive research.

To increase revenues, you will have to use a bird’s eye view to see which thing is working for your business.


Description: Product differentiation can set yourself apart from your competitors and help improve brand loyalty, but it also comes with specific challenges.


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