Wednesday, February 28, 2024

Muthoni Njakwe: Product differentiation: How to sell effectively in a competitive marketplace

Why should your customers choose your product or services over the competitors? This is a crucial question for your business’s survival and growth. Today’s marketplace is very competitive and crowded.  You must differentiate your products or services from the competition for your business to stand out. This will enable you to capture consumers’ attention, build brand loyalty, and ultimately drive revenue growth to your business.

Product differentiation involves developing unique features, characteristics, or benefits that differentiate your products and make them more appealing to the target audience. The goal is to show potential customers what your products offer that other businesses can’t—and why that’s valuable to them. Doing this will get you the lion’s share of buyer attention.

To succeed in product differentiation, you must understand your customers clearly. Understand what they want, what delights them, and what frustrates them.

Product differentiation can take various forms, including design, quality, functionality, performance, technology, branding, and customer service. What’s special about your product could be a new added feature or capability. Or your product could offer fewer features than the products already on the market, focusing instead on a simple, streamlined experience.

Here are several strategies you can apply in your product differentiation:

1. Product positioning

Positioning your product or service in the customer’s mind is key to setting yourself apart and occupying a different place in the customer’s mind. Positioning helps you compete when you don’t have better features, prices, or functionality than your competitors.

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It starts with identifying your target audience, analyzing your competitors, understanding the unique value and benefits your product provides, and then telling a unique story around your product that resonates with your target audience and one your competitors are not currently telling. Dove is an example of a well-positioned product in its consumers’ minds.

What comes to your mind when you hear the name Dove? A beauty bar helps women raise their self-esteem and realize their full potential. Besides its functionality benefits, the brand has differentiated itself by offering intangible benefits to its consumers.  

It has positioned itself as endorsing realistic beauty standards by encouraging real natural beauty to build consumers’ (especially women’s) self-confidence, self-esteem, and ultimate self-acceptance across all consumer touchpoints. This positioning has enabled it to gain a competitive advantage.

2. Customization and Personalization

Customization is a vital tool for product differentiation. Customization means allowing your customers to personalize the product according to their preferences and needs. This is very important as it allows them to identify the product’s features, options, or characteristics that they find most appealing.

This can be colours, sizes, designs, or even product engravings. Customization gives your customers a sense of ownership over the product. They can create something that feels unique and specially made for them. This personalized experience makes your product more attractive and valuable to them, as it caters to their specific tastes and desires.

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3. Pricing strategy

The price of a product influences how customers perceive its value. In most cases, higher prices create the impression of a premium or high-quality product, while lower prices may suggest affordability or a more budget-friendly option. Some customers associate high prices with quality and prestige. You should therefore align your pricing with your desired brand image. By strategically setting prices, you can influence the perceived value of your products and attract customers seeking specific qualities or benefits.

4. Branding and Packaging

Effective branding creates recognition and trust, which sets your products apart from the competition; it helps create a perception of value in customers’ minds. Customers are always willing to pay more for a product with a trusted brand, perceiving it as superior to other options. Packaging is not merely a protective covering but a powerful tool for product differentiation. Ensure that your product packaging grabs attention while communicating your product value and benefits.

5. Exceptional Customer Service

In today’s competitive market, consumers have numerous options and alternatives. As such, exceptional customer service has become a powerful differentiating tool.  Ensure you respond promptly to inquiries, handle complaints efficiently, and offer personalized post-purchase support. This can create a positive customer experience and foster loyalty.

7. Quality and reliability

When customers perceive a product as high-quality, it instils trust and confidence in the brand. A reputation for superior quality can also command premium pricing and attract discerning customers who prioritize value over price.

You should therefore emphasize superior quality and reliability compared to competitors. This could involve using premium materials, implementing stringent quality control processes, or offering longer warranties and guarantees.

Product differentiation is a powerful strategy allowing businesses to stand out in a crowded marketplace. By strategically positioning the products, customizing and personalizing them, offering exceptional customer service, curating a winning pricing strategy, and creating unique and distinctive products, businesses can attract customers, build brand loyalty, and gain a competitive advantage.

About the author

Muthoni Njakwe is a Digital Marketing specialist and founder of StedComm Ltd, a Digital Marketing Agency - Bizna Kenya
Muthoni Njakwe is a Digital Marketing specialist and founder of StedComm Ltd, a Digital Marketing Agency – Bizna Kenya

Muthoni Njakwe is a Digital Marketing specialist and founder of StedComm Ltd, a Digital Marketing Agency. She has extensive knowledge of marketing and advertising. You may connect with Muthoni via her Facebook Page or email: [email protected].

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