Differentiation strategies allow in providing higher value to customers at affordable prices and help to create scenarios that helps boost the viability and profitability of your business. Most researches indicate the six primary ways of differentiation which incorporate the products, services, distribution channels, reputation, relationships, and the price.
Even though not every strategy of distribution is effective as it seems, there are more methods to be invested in for your business to stand out in this competitive era of business.
Differentiation of Product
Product differentiation is one of the most visible strategies that include the actual physical and perceived differences. It is mostly done through advertising and can take many forms like performance, efficacy, and specifications. Product differentiation is the area most business-to-business and consumer marketers spend the majority of their time and money in.
The disadvantage of differentiation is that it is temporary as it is easy to duplicate any of the product innovations that are releasing in the market. The western world has developed intellectual property right ethics along and legal system that provides patent protection and copyright. Innovations are protected for the life of the patent. But with the absence of patents, any person with enough resources can be a competitor in a matter of days.
Differentiation of Service
Differentiation of the services of a business includes the delivery of products and services along with customer services. It also includes various elements of support like training, installation, and ease of ordering. These components of business seem simple to many people but are not simple. For instance, McDonald’s knows how to differentiate the service they provide. You will get same products and services at every McDonald’s outlet, with very few exceptions. The fries from each outlet will be cooked in the same way, and will have almost the same amount of salt in it and will be served fresh from the fryer.
Differentiation of Distribution
Distribution channels are an effective means of distribution that can provide availability or coverage accessibility to expertise, higher levels of technical and customer service, and increased ease of ordering. Manufacturers of fragmented markets cannot reach the end-users without the distribution function. For instance, building materials that are needed to be moved to the contractor from factory plants move through two distribution stages which include master distributors specialty dealers, and retailers.
A distributor can become a potential partner of the manufacturer when they are provided with sufficient support like training, supporting literature, joint sales calls, lead sharing and so on.
A potential distributor who is committed can create an advantage through services like joint promotions, warranty and service support, bundling and technical service, even in non-exclusive relationships. These are time-consuming as well as expensive for your competitors to differentiate this level of differentiation.
Differentiation of Relationship
Relation differentiation is mainly overlooked by many and most of the process is carried out through people who are employed in an organization including the associates, employees and team members of the company who can demonstrate courtesy, competence, credibility, and responsiveness. They are the main linkage between the product and clients who are responsible for executing the day-to-day communication with the clients. Any breaking of this linkage results in the loss of the business.
The representatives of sales, CSR, or technical service become a trusted member of the customer’s team in most of the businesses. This helps to ensure that the product is delivered on time, works well, and resolve the issues as fast as possible. Similar performances are very much helpful in creating an emotional bond between the service provider and the client.
This type of differentiation is closely connected to service and focuses mainly on clients. Most people want to engage in business with people, not with institutions. Therefore, building such a relationship is time-consuming, but has the advantage of establishing a highly differentiated position.
Differentiation of Image
A high reputation is mostly built using many other forms of differentiation which includes high product quality, superior levels of services and performances. The reputation of a business is managed and controlled by symbols that are used in advertising, communications, all various types of media used like print, digital and audio. The atmospheres of the place where the customers encounter the services of business also add a lot to this and are not limited only to retail businesses.
Achieving a good reputation can be a hurdle for new businesses as a business does not automatically differentiate itself from its competitors. A business needs to stand for something to be recognized by the target audience, deliver superior services to the clients, and communicate with them in unique ways that are different from the ways adopted by their competitors. Branding of business also requires a large budget to pull businesses successfully.