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    Differentiation PDF

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    vinay mourya
    Differentiation involves creating unique value for customers beyond low price by appealing to tangible characteristics like size and performance or intangible attributes related to image and identity. Successful differentiation requires consistency across all customer touchpoints and integrity between product features and customer objectives. Firms can identify opportunities for differentiation throughout their value chain in areas like technology, human resources, operations, logistics, marketing, and service.

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    Differentiation PDF

    Uploaded by

    vinay mourya
    61 views6 pages
    Differentiation involves creating unique value for customers beyond low price by appealing to tangible characteristics like size and performance or intangible attributes related to image and identity. Successful differentiation requires consistency across all customer touchpoints and integrity between product features and customer objectives. Firms can identify opportunities for differentiation throughout their value chain in areas like technology, human resources, operations, logistics, marketing, and service.

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    Differentiation involves creating unique value for customers beyond low price by appealing to tangible characteristics like size and performance or intangible attributes related to image and identity. Successful differentiation requires consistency across all customer touchpoints and integrity between product features and customer objectives. Firms can identify opportunities for differentiation throughout their value chain in areas like technology, human resources, operations, logistics, marketing, and service.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    61 views6 pages

    Differentiation PDF

    Uploaded by

    vinay mourya
    Differentiation involves creating unique value for customers beyond low price by appealing to tangible characteristics like size and performance or intangible attributes related to image and identity. Successful differentiation requires consistency across all customer touchpoints and integrity between product features and customer objectives. Firms can identify opportunities for differentiation throughout their value chain in areas like technology, human resources, operations, logistics, marketing, and service.

    Copyright:

    © All Rights Reserved
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    Download as pdf or txt
    of 6

    The Nature of Differentiation

    DEFINITION: “Providing something unique that is valuable to the


    buyer beyond simply offering a low price.” (M. Porter)
    THE KEY IS TO CREATE VALUE FOR THE CUSTOMER

    TANGIBLE DIFFERENTATION INTANGIBLE


    Observable product characteristics: DIFFERENTATION
    • size, color, materials, etc. Unobservable and subjective
    • performance characteristics that appeal to
    • packaging customer’s image, status,
    • complementary services identity, and desire for exclusivity

    TOTAL CUSTOMER RESPONSIVENESS


    Differentiation not just about the product, it embraces the whole
    relationship between the supplier and the customer.
    Differentiation and Segmentation

    DIFFERENTIATION: is concerned with how a firm distinguishes


    its offerings from those of its competitors (i.e. How the firm
    competes)
    SEGMENTATION: is concerned with which customers, needs,
    localities a firm targets (i.e. Where the firm competes)

    DOES DIFFERENTIATION IMPLY SEGMENTATION?


    —Not necessarily, depends upon the differentiation strategy:
    BROAD SCOPE DIFFERENTIATION Appealing to what is common
    between different customers
    (McDonalds, Honda, Gillette)
    FOCUSED DIFFERENTIATION Appealing to what distinguishes
    different customer groups (MTV
    Harley-Davidson, Ralph Lauren)
    Consistency of Differentiation Strategy:
    Product Integrity

    Key to successful differentiation is consistency of all


    aspects of the firm’s relationship with its customers.

    Product Integrity: the total balance of product features


    • Internal integrity: consistency between
    function and structure
    • External integrity: fit between the product
    and the customers’
    objectives, values, lifestyle
    etc.
    THE VALUE CHAIN AND
    DIFFERENTIATION STRATEGY

    General Management

    R&D, Product Development

    Purchase: Commercial

    Manufacturing, Engineering, Marketing,


    Logistics, Materials Management Customer Support
    Using the Value Chain to Identify
    Differentiation Potential on the Supply Side
    MIS that supports Training to support Unique product features.
    fast response customer service Fast new product
    capabilities excellence development

    FIRM INFRASTRUCTURE
    HUMAN RESOURCE MANAGEMENT
    TECHNOLOGY DEVELOPMENT

    INBOUND OPERATIONS OUTBOUND MARKETING SERVICE


    LOGISTICS LOGISTICS & SALES
    Customer technical
    support. Consumer
    credit. Availability of
    Quality of Defect free Fast delivery. Building brand spares
    components & products. Efficient order reputation
    materials Wide variety processing
    • What are the threats/risks to a
    differentiation strategy?

    • How do you avoid them?

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