This document discusses product differentiation strategies. It defines differentiation as adding meaningful differences to distinguish a company's offering. There are five dimensions for differentiation: product, service, personnel, channel, and image. The document provides examples of each dimension. It also discusses strategies for differentiation online, such as site environment, building trust, efficient ordering, pricing, customer relationship management, and user-generated content. The goal of differentiation is to create a competitive advantage by appealing to customers' unique needs and preferences.

1. PRODUCT
HIERARCHY
Organizational chart that depicts the array of products
offered in a given market.

2. Product Classification
 Durability and Tangibility
 Non Durables
Durables
Services

3. Product Mix
Set of all the products that an organization offers to
its customers.
• Product Width : Total no. of product lines a company
carries.
• Product Length : Total number of items in that mix.
• Product Depth : Assortment of sizes, colors and
variation offered for each product in the product line.
• Consistency : Closeness exhibited by the product lines
in production requirements, distribution, end usage etc.

4. Product Mix of HUL
Color
Cosmetics
Hair
Care
Skin
Care
Oral Care Deodorants Soap &
detergents
Toilet
Soaps
Beverages Food
Lakme
Aviance
Sunsilk
Clinic
Plus
Fair &
Lovely
Pond’s
Pepsodent
Close up
Axe
Denim
Rexona
Ponds
Surf Excel
Wheel
Rin
501
Ala
Vim
Liril
Lifebu
oy
Lux
Breeze
Pears
Dove
Savlon
Lipton
Yellow
Lebel
Lipton
Green
Lebel
Lipton Ice
Tea
Red Lebel
Taj Mahal
Knorr
Annap
urna
Atta
Kwality
Wall’s
Max
Kissan
Product Mix Width

5. • Kotler defines differentiation as the process of adding
meaningful and valued differences to distinguish the
company’s offering from the competition.
• There are a number of differentiation dimensions and
strategies for their accomplishment.
Product Differentiation

6. Differentiation Dimensions
• A firm can differentiate along 5 dimensions:
• Product
• Service
• Personnel
• Channel
• Image

7. • Make a product more attractive by contrasting its unique qualities with other
competing products.
• Successful product differentiation creates a competitive advantage for the
seller, as customers view these products as unique or superior.
• Differentiation may include customization, packaging, and attractive pricing
of products.
Product Differentiation

8. Service Differentiation
• Customer service can be enhanced by 24-hour customer
feedback through e-mail and the ability to respond more
rapidly to customer concerns.
• Home delivery of groceries, online banking, and
securities trading are becoming increasingly popular.
• Today such services supplement traditional services, but
may someday replace them.

9. Personnel Differentiation
• Companies can gain a strong competitive advantage
through having better-trained people.
• Singapore Airlines enjoys an excellent reputation in large
part because of its fight attendants.
• The McDonald’s people are courteous
• The IBM people are professional

10. • The internet:
• Is a location-free, time-free distribution and communication
channel.
• Functions as a communication channel for companies that provide
product or service information online.
• Serves as a transaction and distribution channel for companies
that conduct online commercial transactions.
• Becomes the entire distribution channel for digital products.
Channel Differentiation

11. Image Differentiation
• A company can differentiate itself by creating a unique
experience called “experience branding.”
• Through experience branding firms can better retain
customers, target key segments, and enhance
profitability.

12. Image Differentiation
A person responds differently to company and brand images
• Symbols
• Logos
• Media
• Advertising
• Events

13. Differentiation Strategies
• Trout and Rivkin proposed specific differentiation
strategies common to offline and online
businesses:
• Being the first to enter the market.
• Owning a product attribute in the mind of the
consumer.
• Demonstrating product leadership.
• Utilizing an impressive company history or heritage.
• Supporting and demonstrating the differentiating
idea.
• Communicating the difference.

14.  There are 6 differentiation strategies unique to
online businesses.
 Site Environment/Atmospherics
 Easy downloads, accurate and clear
information, easy navigation.
 Build Trust
 Strong brand recognition.
 Privacy policy.
 Safe and encrypted payment process for
transactions.
Internet-Specific Differentiation Strategies

15.  Efficient and Timely Order Processing
 Pricing
 In the early days of the Web, companies
offered discounts as purchase incentives.
 Majority of firms today differentiate
themselves in other ways besides pricing.
 Customer Relationship Management
 Managing long-term relationships with
customers.
 Invite User-generated Content
 The key is to trust customers, listen, respond,
and learn.
Cont……………………………