Product differentiation

Product differentiation is the opposite of commoditisation.

Differentiating a product (or service) gives its producer more pricing power and even a degree of monopoly. There are a number of ways in which a company can seek to differentiate its products including:

  • Improving the product itself by adding features, improving reliability, etc.
  • Branding: marketing to make the product appear different to consumers.
  • Exploiting network effects to increase the value of the product relative to competitors.
  • Distribution: making the product more conveniently available than its competition.
Copyright © 2005-2016