New Venture Lab: Equipping Christian Entrepreneurs

Question

What is meant by the term "differentiation"?

Answer

Products or services may be virtually indistinguishable from competitors' products (commodity products), highly unique (specialty products), or in between the two extremes. Different marketing strategies are required depending upon the type of product or service you have.  Differentiation is a very important strategy for specialty products in that it is what sets them apart from the competitors' products in the minds of customers. A thorough understanding of how your product's benefits compare to your competitors' allows you to compete effectively with them through differentiation.  Commodity products have few, if any, perceived differences between competitors or competitive products, while highly-differentiated specialty products have unique features that compare favorably to competitors or competitive products.