Product differentiation


Brands can be differentiated on the basis of a number of different product or service dimensions: product form, features, performances, conformance, durability, reliability, repairable, style, and design, as well as such service dimensions as ordering ease, delivery, installation, customer training, customer consulting, and maintenance and repair.

Besides these specific concerns, one more general positioning for brands is as “best quality.� How important is a high-quality product positioning? The Strategic Planning Institute studied the impact of higher relative product quality and found a significantly positive correlation between relative product quality and return on investment (ROI). High-quality business units earned more because premium quality allowed them to charge a premium price; they benefited from more repeat purchases, consumer loyalty, and positive word of mouth; and the costs of delivering more quality were not much higher than for business units producing low quality.

Quality will depend on actual product performances, but it is also communicated by choosing physical signs and cues. Here are some examples:

(a) A lawnmower manufacturer that claims its lawnmower is “powerful� has given it a noisy motor because buyers think noisy lawnmowers are more powerful.

(b) A truck manufacturer undercoats the chassis not because it needs undercoating but because undercoating suggests concern for quality.

(c) A car manufacturer makes sure its car doors make a solid sound when they slam shut because many buyers slam the doors in the showroom to test how well the car is built.

(d) Ritz Carlton hotels signal high quality by training employees to answer calls within three rings, to answer with a genuine “smile� in their voices, and to be extremely knowledgeable about all hotel services.

Quality is also communicated through other marketing elements. A high price usually signals premium quality. Quality image is also affected by packaging, distribution, advertising, and promotion. Here are some cases where a brand’s quality image was hurt:

· A well-known frozen-food brand lost its prestige image by being on sale too often.

· A premium beer’s image was hurt when it switched from bottles to cans.

· A highly regarded television receiver lost its quality image when mass-merchandise outlets began to carry it.

A manufacturer’s reputation also contributes to the perception of quality. Certain companies are sticklers for quality; consumers expect Nestle and IBM products to be well made. Smart companies communicate quality to buyers and guarantee “Customer satisfaction or your money is given back�.