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In economics and marketing, product differentiation (or simply differentiation) is the process of distinguishing a product or service from others to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as from a firm's other products.
It is because differentiated goods and services are likely to have a better user experience, hence, the chance of having returning customers would be significantly increased. However, differentiation also contains disadvantages, an example would high cost and time consuming, especially in the introduction stage of the product life cycle. [13]
Differentiation strategy is not suitable for small companies. It is more appropriate for big companies to apply differentiation in any one or several of the functional groups (finance, purchase, marketing, inventory etc.). [5] This point is critical. For example, GE uses its finance division differentiate itself.
It is a form of competition that requires firms to focus on product differentiation instead of pricing strategies among competitors. Such differentiation measures allowing for firms to distinguish themselves, and their products from competitors, may include, offering superb quality of service, extensive distribution, customer focus, or any ...
Product differentiation occurs when companies have to distinguish a certain product in the marketplace when competing for a product that bring about the same need (e.g. tea) amongst different firms. [9] In order to do so, the aim is to make the product more attractive to the marketplace compared to other competitors.
Differentiation (ethnography), the invention of ostensible differences between cultures; Differentiation (linguistics), in semantics, a meaning shift reached by "adding concepts to the original concepts" Differentiation (sociology), a feature of modern society, and way of dealing with complexity; Differentiated instruction, in education
Distribution is the process of making a product or service available for the consumer or business user who needs it, and a distributor is a business involved in the distribution stage of the value chain. Distribution can be done directly by the producer or service provider or by using indirect channels with distributors or intermediaries.
[4] [d] We have thus succeeded in properly defining the derivative of a function, meaning that the 'slope of the tangent line' now has a precise mathematical meaning. Differentiating a function using the above definition is known as differentiation from first principles.