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PRODUCT DIFFERENTIATION

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ROSHAN GOWDA

This document discusses criteria for product differentiation. It identifies three categories for bases of differentiation: 1) product attributes, 2) firm-customer relationships, and 3) firm linkages. Product attributes create preferences through actual differences in tangible products and services compared to competitors' offerings, such as quality, features, or timing. Firm-customer relationships create preferences as the firm develops relationships with customers based on what target customers want, like reputation. Firm linkages create preferences by combining competencies across functions or organizations to produce tangible or intangible differences between the firm's offering and competitors'. A successful base of differentiation must fill a customer need better than competitors, such as performance, quality, style, taste, price, form, features, dur

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Criteria for Product Defferentiation Presented by, Roshan V.V. 1st MBA(Sec B) VVCE , Mysuru. Economics for Managers
Product Differentiation It is a process of distinguishing service offering from others, to a product or make it more attractive to a particular target market competitors products as well as a firms own product offering .
Bases of Differentiation Three Categories 1) Product Attributes 2) FirmCustomer Relationships 3) Firm Linkages
Bases of Differentiation Product Attributes Preferences are created by actual differences in tangible product and services competitors offering offered by focal firm e.g. Quality feature Timing of introduction
Bases of Differentiation Relationship with customer Preferences are created as the focal firm develops and exploits relationship customer based on what the target want with customers * Reputation
Firm Linkages Preferences are created by combining the competencies of different functions within or across organization to produce or intangible differences between offering and competitors offering tangible focal firm
Bases of Differentiation A base of differentiation must customer need: fill some performance Quality style taste price form features durability reliability servicing A differentiated product fills one or more needs better than the products of competitors
PRODUCT DIFFERENTIATION
PRODUCT DIFFERENTIATION
PRODUCT DIFFERENTIATION
QUALITY
STYLE
The Value of Product Focal Firm with No Differentiation Focal Firm with Differentiated ProductDifferentiated Product MCff ATCff PffATCind Pind Dind Dff MRff QffQind Above Normal Profits A
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PRODUCT DIFFERENTIATION

  • 1. Criteria for Product Defferentiation Presented by, Roshan V.V. 1st MBA(Sec B) VVCE , Mysuru. Economics for Managers
  • 2. Product Differentiation It is a process of distinguishing service offering from others, to a product or make it more attractive to a particular target market competitors products as well as a firms own product offering .
  • 3. Bases of Differentiation Three Categories 1) Product Attributes 2) FirmCustomer Relationships 3) Firm Linkages
  • 4. Bases of Differentiation Product Attributes Preferences are created by actual differences in tangible product and services competitors offering offered by focal firm e.g. Quality feature Timing of introduction
  • 5. Bases of Differentiation Relationship with customer Preferences are created as the focal firm develops and exploits relationship customer based on what the target want with customers * Reputation
  • 6. Firm Linkages Preferences are created by combining the competencies of different functions within or across organization to produce or intangible differences between offering and competitors offering tangible focal firm
  • 7. Bases of Differentiation A base of differentiation must customer need: fill some performance Quality style taste price form features durability reliability servicing A differentiated product fills one or more needs better than the products of competitors
  • 12. STYLE
  • 13. The Value of Product Focal Firm with No Differentiation Focal Firm with Differentiated ProductDifferentiated Product MCff ATCff PffATCind Pind Dind Dff MRff QffQind Above Normal Profits A