Product differentiation in
marketing, is the modification of a
product, usually in minor ways, to make it more attractive to the
target market and to differentiate it from competitors' products. The modification can be so slight as to be merely a change in packaging or a change in
advertising theme. The physical product need not change, but it could. The objective of this strategy is to develop a
position that potential customers will see as unique. If your target market sees your product as different from the competition's, you will have more flexibility in developing your
marketing mix. A successful product differentiation strategy will move your product from competing based primarily on
price to competing on non-price factors (such as product characteristics,
distribution strategy, or
promotional variables). The disadvantage of this repositioning of your product to a more distinct and uncluttered position in your customers' mind, is that it usually requires large
advertising and production expenditures.
see also: market segmentation, product management, marketing, brand, marketing plan, positioning