Product Differentiation

Product Differentiation

Product Differentiation Jonathan Poland

Product differentiation is the unique value that a product offers on the market. This value can come from a variety of factors, including the product’s quality, branding, cost, and features. Differentiation is important because it helps a product stand out from its competitors and appeal to customers. For example, in a crowded supermarket shelf, each product may have its own unique characteristics that set it apart from others, such as branding, organic certification, country of origin, flavor, or price.

Establishing strong differentiation is considered essential for success in many industries. In a commoditized market, where customers perceive all products as the same, it can be difficult or impossible to differentiate a product and compete on other factors. On the other hand, industries with strongly differentiated products, such as luxury goods, often enjoy high margins and revenue.

Product differentiation is the process of making a product stand out from its competitors by highlighting its unique value or characteristics. There are many ways that a product can be differentiated, and the specific approach will depend on the product and the market it is in. Some examples of product differentiation include:

  • Branding: Creating a strong and recognizable brand can differentiate a product from its competitors. This can include the use of a distinctive logo, packaging, or advertising, as well as the development of a brand personality or story.
  • Quality: Offering a high-quality product can differentiate it from cheaper, lower-quality alternatives. This can include using premium materials, offering a longer warranty, or providing exceptional customer service.
  • Features: Adding unique or innovative features to a product can make it stand out from others in its category. This can include new technologies, functionality, or design elements that are not available on competing products.
  • Cost: Differentiating a product on the basis of cost can be effective in certain markets. For example, offering a lower-priced product can make it attractive to price-sensitive customers, while offering a higher-priced product can position it as a premium or luxury option.
  • Customization: Allowing customers to customize a product to their specific needs or preferences can differentiate it from mass-produced alternatives. This can include options for personalization, such as monogramming or color choices, or allowing customers to build their own product from a range of available components.
Learn More
Ground Rules Jonathan Poland

Ground Rules

Ground rules are rules or guidelines that are established at the beginning of a meeting, activity, or other situation to…

Implementation Jonathan Poland


Implementation is the process of putting a plan or idea into action. In a business context, implementation refers to the…

Physical Capital Jonathan Poland

Physical Capital

Physical capital refers to the tangible assets that are used to produce goods and services. This term is commonly used…

Customer Advocacy Jonathan Poland

Customer Advocacy

Customer advocacy is a customer service strategy that involves employees representing and fighting for the interests of customers, rather than…

Team Strategy Jonathan Poland

Team Strategy

A team strategy is a plan that outlines how a team will achieve its goals. Developing and implementing a strategy…

What is a Capitalist? Jonathan Poland

What is a Capitalist?

A capitalist is an individual who supports or practices capitalism, which is an economic system based on the principles of…

Productivity Jonathan Poland


Productivity is a measure of how efficiently resources are used to produce goods and services. It is typically calculated by…

What is a Product Line? Jonathan Poland

What is a Product Line?

A product line refers to a group of related products that are marketed together as a single unit. Product lines…

Sales Skills Jonathan Poland

Sales Skills

Sales skills are the abilities, knowledge, and personal characteristics that enable an individual to succeed in a sales role. These…

Content Database

Internal Communication Jonathan Poland

Internal Communication

Internal communication is the exchange of information within an organization that is designed to help it achieve its goals. This…

First Republic Bank Jonathan Poland

First Republic Bank

First Republic Bank (FRC) and its subsidiaries offer private banking, private business banking, and private wealth management services to clients…

Change Driver Jonathan Poland

Change Driver

A change driver is a force or factor that initiates or drives change within an organization. Change drivers can be…

Western Alliance Bancorporation Jonathan Poland

Western Alliance Bancorporation

Western Alliance Bancorporation (WAL) operates as the bank holding company for Western Alliance Bank, offering various banking products and related…

Capitalist Realism Jonathan Poland

Capitalist Realism

Capitalist realism is the theory that capitalism is the only economic system that is realistically possible or viable. This term…

Fixed Assets Jonathan Poland

Fixed Assets

Fixed assets are long-term resources that are owned by a business and are used to generate future economic benefits. In…

Action Plan Jonathan Poland

Action Plan

An action plan is a detailed strategy that outlines the steps and resources needed to achieve a specific goal. It…

Simpson Manufacturing Jonathan Poland

Simpson Manufacturing

Simpson Manufacturing Co. (SSD), operating through its subsidiaries, is a global company that specializes in designing, engineering, manufacturing, and selling…

Systems Thinking Jonathan Poland

Systems Thinking

Systems thinking is the practice of analyzing the entire system, rather than just its individual parts, in order to understand…