Product differentiation Strategic marketing notes Company Strategy: 1. Generates economic value by offering a product that customers prefer over competitors Product a. Harley Davidson b. Buss level strategy such as cost leadership and product differentiation is intended to increase the perceived value of the focal firm’s product or service relative to the value of competitor’s good or service i. Tangible thing (product features location) ii. Intangible concept (reputation, a cause, an ideal) = iii. Limited only by managerial creativity d. Base of differentiation i. Product attributes: exploiting the actual product 1. Product features: shapes, features 2. Product complexity: functions of the products 3. Timing of introductions: being the first in the market, launching time. Situation analysis means being guided by an organizational mission, evaluating ownership and management options, and outlining the goods/service category to be sold. The purpose of this evaluation is to determine the firm’s current status and of what direction it should be heading towards. If a supermarket in my areas was experiencing a decrease in baby diaper sales but an increase in sales of elder diapers I would definitely consider conducting a situation analysis to see if there actually could be a market for the elders in the community. Based off the sales of elder diapers alone I do not think that it is worth creating a full market but if the sales also increased in products such as Bungay, Canes and wheel chairs to name a few then there would be a need for people in that market and therefore worth taking the chance to assist them with it. Two of the target market techniques I could use in the startup of a retail store are social media and the use of popular influencers. If I was to open a hair store for example then my target market would generally be women and teenage girls for the most part. A real world example of using social for instance could be to announce a contest that will be done while on Live stream then give away free hair bundles to the winners after announcing them. This would promote the free advertisement while also reaching a large group of people at one time. Secondly the use of popular influencers such as bloggers or product reviewers could give a more in depth review of the product’s quality that you sell. True enough you would have to either pay someone popular to use your products or give them products free to get the support you need. That small investment could create a huge client list.
VRIO analysis in product differentiation 1. Value: neutralizing competition through making distinction between our product with competitors’ products a. Exploiting industry type opportunities i. Fragmented industries: branding a commodity product to a differentiated product: Kellogg’s Special K ii. Emerging industry: first mover advantage to captures market share: semi-autonomous car by Tesla, Space X and blue origin iii. Mature industry: refining products or adding services: Hotel with tour package iv. Declining industry: Exploiting niches for strong needs. Example: Polaroid cameras survived while the film camera industry doomed.
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Company Strategy: Creating Value through Product Differentiation and Market Analysis