5 Product Differentiation Criteria You Should Know

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5 Product Differentiation Criteria You Should Know

Product differentiation is an attempt by a company to differentiate its products from competitors’ products by making these products special. According to Kotler (2003), differentiation is defined as the act of determining a set of differences that have a use-value to differentiate the company’s offering from its competitors.

In this case, product differentiation can be concluded as a necessity for companies to determine differences with competing products and these differences must have important value for society.

It often happens that companies feel they have made a differentiation. But in reality, this differentiation doesn’t matter much. To avoid this, companies need to know some of the criteria for a good differentiation, including:

Not Easy to Imitate Competitors

The differentiation made should be unique and difficult for competitors to imitate. The uniqueness will make a product that is produced will always be remembered and has a place in the hearts of consumers. Even if one day the product can be imitated, the company must work hard to make a difference so that it is not similar to the same product on the market.

According to Consumer Interests

The differentiation made should display the attributes that are considered important by customers. If a car company emphasizes the difference only in seating, of course, it is not an important differentiation. Important attributes in a car, for example, lie in aspects such as engine performance, design, ease of repair, ease of obtaining spare parts, and so on.

Have the advantage

The differentiation that is carried out should have many advantages over competing companies. It is unique but does not have more value than competitors, tends to only make the product seem expensive without having the same benefits as other products. Consumers will avoid it. Make the differentiation we do is quality and full of benefits, so that consumers feel they are buying goods at reasonable prices without having to think twice.

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Please note that in differentiating each company it will cost a lot. Don’t let this differentiation make the price of the product you offer soar too high so that consumers feel it is less realistic to buy it because they don’t feel commensurate with the benefits offered from similar products. For example, if an electronics company combines the functions of a flat-screen television with a computer. If you buy separately, the television costs $ 400 and the computer costs $ 500. Then the company set the price for the new television (which has been combined with a computer) of $1400. Of course, this is difficult for consumers to accept. because usually consumers already have a reasonable price estimate for a product.

Profitable Company

Making a profit is a general business principle. Even though differentiation is costly, it must be profitable for the company. Discuss how much it will cost for a product differentiation and what a fair selling price to get a profit with the company’s financial management department.

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