Differentiation showcases a product or service’s unique or special qualities that are offered by a company. I believe most companies strive for differentiation to remain competitive in today’s turbulent market. Consumers can be finicky, demanding and have a high level of brand awareness (especially in the Bay Area).
Burberry is a company that has been successful in the differentiation of their scarves. They sell cashmere scarves made in Scotland or England for $265 to over $500. The scarves are beautiful, soft, warm, cozy and of high quality cashmere. However, not just any scarf manufacturer would be able to sell their cashmere scarves for well over $200. Burberry has succeeded in building their brand with a strong differentiation and high brand awareness in the marketplace. Consumers feel that when they are purchasing a Burberry scarf that they are purchasing a high quality piece of luxury.
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Differentiation is especially important in the current economic downturn as you point out. I hadn't thought about Burberry, which I associate more with the east coast. Toyota provides another example. Although Toyota's sales are down, they're not as far off the mark as the American automakers. That's partly due to Toyota's innovations, such as the Prius and Camry hybrids. Toyota has been able to break away from the pack by adopting the hybrid technology as well as producing cars with style. So not only does the Prius get great gas mileage, it's a solid, roomy, and eye-catching car. (I admit I'm biased; I've been a Toyota owner since 1979 and currently drive a Prius.)
ReplyDeleteIt is very crucial to compete at this time for businesses because not only people look at the productivity, services, and performance, customers are also looking at affordability.Even with the current situation, some people still seek for high quality products that are more expensive than compare to products. Differentiation is everywhere in the market, from the Burberry, Channel, Coach or any other name brands of handbags. Not only in that industry, it is also in automobile market. Another market that I want to add on in differentiation is cosmetics. Recently, I found out that MAC, Clinique, and Benefit are all owned by Estee Lauder. Here we clearly see the differentiation by who the company is targeting towards. It is most likely that MAC or Benefit brands are targeted towards younger generation and the services and price range are different from Estee Lauder. It is one of their strategy to sell their products without visible marketing flaws. In my opinion, differentiation has both positive and negative effects on us because we are still falling for different strategies that one company is using to sell their products. And especially in today's market, who knows what company has relationship with what companies. The incorporation is at its peak in every corner of the global marketing system than it has even been in history.
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