A market offering can be differentiated along 5 dimensions product (form, features, performance quality durability, reliability, style, design, services (order case, delivery, Installation customer training maintenance and repair etc. Personnel (channel or image) symbols (media atmosphere) and events. It should be noted here that a difference is worth establishing to the extent that it is important, distinctive, superior, affordable and profitable.
The seller tries to differentiate his offerings along the following dimensions:
Form: Here the product is differentiated by changing the size, shape or physical structure Aspirin, for example can be differentiated by dosage size, shape, action time etc.
Features: These are characteristics that supplement the products basic functioning, take the case of Maruti 800. This stripped down version costs Rs 1,89,000 . The 800 standard has added features such as air conditioning, multi point injection, Euro 1 compliant, four gears targeted at non –metros at Rs 2,09,000. The 800 standard for metros comes with air conditioning multi point injection, Euro II compliant, five gears costing Rs 2,33,000.
Performance quality: Buyers of costly products generally compare the performance characteristics of different brands. They will pay more for better performance (McDonald’s Burger, Barista coffee, Surf Excel detergent powder, Parker pen etc) as long as the higher price does not exceed the higher perceived value.
Durability Buyers are wiling to pay more for durable product (durability is a measure of the product’s expected operating life). Which of course is not very expensive and is not subject to high fashion or technological obsolescence (e.g. trendy, long lasting cycles, command a good price as against personal computers, video cameras – durable but subject to technological changes)
Reliability Buyers are willing to pay a premium for more reliable (that is, the product will not malfunction or fail within a specified time period) products (e.g. Godrej steel almirah)
Reparability: The ease with which a buyer is able to fix the fault and repair a part of the product that does not work properly (either personally or through a company ‘s repair person) – also influences buyers to pay more or less for a product (e.g. Whirlpool’s electric appliances)
Style: style describes how well the product looks and feels to the buyer. Style has the advantage of creating product distinctiveness that is difficult to copy (e.g. Nissan and Mazda in sports cars, Olivetti in office machines. Montblanc pens, Swatch in watches etc).
Design: design is the totality of features that affect how a product looks and works in terms of customer requirements (pleasing looks; easy to open, install, operate and repair, easy to dispose of etc). For example Italian design in apparel, Gillette in electric shavers etc.
The key service differentiation includes:
1) Ordering ease: how easily the customer is able to place an order with the company for e.g. ICICI’s Home loan.
2) Delivery: how well the product or service is delivered to the customer for e.g. Pizza for Pizza Hut.
3) Installation: the work done to make a product operational in its planned location or e.g. Installing Compaq’s computers, LG’s air conditioners.
4) Customer training: getting the employees of the customer trained in the use of vendor’s equipment for example training hospital staff before installing general electric’s X ray equipment, requiring franchisees to attend Hamburger University for two weeks in case of McDonalds etc.
7) Repair: quality of repair service available to buyers of the company’s product for example LG’s home appliances, Samsung’s electronic items etc.
Companies can stay ahead of their rivals through hiring and training better people; For example Wal-Mart’s store employees; McDonald’s courteous service producers, Citibank’s staff assistants etc (better trained people have the requisite skills and knowledge , are courteous, trustworthy, reliable, responsive and understand customer’s needs and respond properly.
Source: Strategic Management