Product Differentiation

A company ean differentiate its physical produet. At one extreme, some companies offer highly standardized products that allow little variation: ehicken, steel and aspirin. Yet even here, some meaningful differentiation is possible. For Kample, Perdue claims that its branded chickens are better - fresher and more tender - and gets a 10 per cent price premium based on this differentiation.

Other companies offer products that can be highly differentiated, such as cars, commercial buildings and furniture. Here the company faces an abundance of design parameters.11 It ean offer a variety of standard or optional features not provided by competitors. Thus Volvo provides new and better safety features, while Lufthansa offers wider seats to business-class flyers. In the United Kingdom, \\1iitbread has targeted its chain of Brewers Fay re pubs at families. Besides the usual food and drink, most Brewers Fayres have a toddlers' area, a play zone for bigger children and a 'Charlie Chalk Fun Factory - a large self-contained area full ofgames, toys and adventure equipment'.

Companies can also differentiate their products on performance. Whirlpool designs its dishwasher to run more quietly; Unilever formulates Radios to remove odours as well as dirt from washing. Style and design can also be important differentiating factors. Thus many ear buyers pay a premium for Jaguar cars because of their extraordinary look, even though Jaguar has sometimes had a poor reliability record. Similarly, companies can differentiate their products on such attributes as consistency, durability, reliability or repairability.

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