product differentiation

Examples of product differentiation in the following topics:

• Product Differentiation

  • Oligopolies can form when product differentiation causes decreased competition within an industry.
  • Product differentiation (or simply differentiation) is the process of distinguishing a product or service from others, to make it more attractive to a particular target market.
  • This involves differentiating it from competitors' products as well as a firm's own products.
  • The major sources of product differentiation are as follows:
  • Explain the relationship between product differentiation and the existence of an oligopoly

• Product Differentiation

  • Product differentiation is the process of distinguishing a product or service from others to make it more attractive to a target market.
  • Marketing or product differentiation is the process of describing the differences between products or services, or the resulting list of differences; differentiation is not the process of creating the differences between the products.
  • Product differentiation is done in order to demonstrate the unique aspects of a firm's product and to create a sense of value.
  • Simple: the products are differentiated based on a variety of characteristics;
  • The major sources of product differentiation are as follows:

• Porter's Competitive Strategies

  • Michael Porter classifies competitive strategies as cost leadership, differentiation, or market segmentation.
  • Porter identifies two competencies as most important: product differentiation and product cost (efficiency).
  • He originally ranked each of the three dimensions (level of differentiation, relative product cost, and scope of target market) as either low, medium, or high and juxtaposed them in a three-dimensional matrix.
  • This strategy can include creating a powerful brand image, which allows the organization to sell its products or services at a premium.
  • Coach handbags are a good example of differentiation; the company's margins are high due to the markup on each bag (which mostly covers marketing costs, not production).

• Promotional Objectives

  • There are three main promotional objectives: inform the market, increase demand, and differentiate a product.
  • Eventually a product will reach its saturation point, at which time investing in sales will decrease as the company focuses its attention on a new product.
  • Present information about the product: In order for customers and consumers to want the product they need to understand what the product is and how it benefits them.
  • Differentiate a product: This is especially important if there are multiple competitors in the same market.
  • For example, Apple was able to differentiate itself in the computer industry.

• Promotion Objectives

  • Promotion is to present information to consumers to increase demand and to differentiate a product.
  • There is the physical form of product promotion and the digital form, both of which require clear and concise textual information about the product being advertised.
  • These are to present information to consumers as well as others, to increase demand, and to differentiate a product.
  • There are different ways to promote a product in different media.
  • This is to increase the sales of a given product.

• Characteristics of the Product

  • The unique characteristics of a product should be used as inputs in determining the product's marketing mix.
  • The characteristics of the product are the features and elements that differentiate it from other products on the market.
  • A product needs to differentiate itself in the market and carry distinct characteristics that separate it from its competitors.
  • Characteristics of a product also help to determine the price of a product.
  • The characteristics of a product determine the target market and price of a product.

• Differentiation Rules

  • The rules of differentiation can simplify derivatives by eliminating the need for complicated limit calculations.
  • When we wish to differentiate complicated expressions, a possible way to differentiate the expression is to expand it and get a polynomial, and then differentiate that polynomial.
  • In many cases, complicated limit calculations by direct application of Newton's difference quotient can be avoided by using differentiation rules.
  • Here the second term was computed using the chain rule and the third using the product rule.
  • The flight of model rockets can be modeled using the product rule.

• Differential

  • Differential pricing exists when sales of identical goods or services are transacted at different prices from the same provider.
  • However, product heterogeneity, market frictions, or high fixed costs (which make marginal-cost pricing unsustainable in the long run) can allow for some degree of differential pricing to different consumers, even in fully competitive retail or industrial markets.
  • Price differentiation can also be seen where the requirement that goods be identical is relaxed.
  • For example, so-called "premium products" (including relatively simple products, such as cappuccino compared to regular coffee with cream) have a price differential that is not explained by the cost of production.
  • There are two conditions that must be met if a price differentiation scheme is to work.

• Compensation Differentials

  • Some differences in wage rates across places, occupations, and demographic groups can be explained by compensation differentials.
  • More skilled and educated workers tend to have higher wages because their marginal product of labor tends to be higher .
  • The compensation differential ensures that individuals are willing to invest in their own human capital.
  • Not to be confused with a compensation differential, a compensating differential is a term used in labor economics to analyze the relation between the wage rate and the unpleasantness, risk, or other undesirable attributes of a particular job.
  • Hazard pay is a type of compensating differential.

• Differentiation and Rates of Change in the Natural and Social Sciences

  • Differentiation, in essence calculating the rate of change, is important in all quantitative sciences.
  • Equations involving derivatives are called differential equations and are fundamental in describing natural phenomena.
  • Economists study the rate of change of gross domestic product and social scientists the rate in which populations vote in a specific area.
  • Accountants study the rate of change of production and supplies, and how any change can affect cost and profit.
  • Give examples of differentiation, or rates of change, being used in a variety of academic disciplines