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Product differentiation
An attempt by a business to distinguish its products from those of competitors.
This involves creating functions or features of the product (or firm) which help it to stand out from its competitor
Strong product differentiation helps the firm to develop its competitive advantage
The development of product differentiation often helps a firm to create a USP for its products which can be used in marketing
Product differentiation may be tangible (clearly visible) or it may be a perception that is created about the product in the consumer’s mind
Competitive advantage
Anything that gives a company an edge over its competitors, helping it attract more customers and grow its market share
Successful product differentiation helps the business to…
increase demand for its products, increase bran loyalty, and allow the business to charge higher prices
Examples of product differentiation
In 2014, in Singapore, Hyundai Cars introduced a three year warranty on all new cars when the industry standard was one year
Green and Black use Fairtrade cocoa AND sugar in the production of their chocolate
