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Porsche.pngOne of the main aims of any firm is to mark themselves out from other firms and ensure that their product is, or appears to be, different or even unique. This is termed product differentiation and it is something all companies are striving for. Product differentiation is the basis of a Unique Selling Point or Proposition (USP).

Product differentiation

This is when a producer tries to make their products significantly different from their rivals, or at least to persuade consumers that there is a fundamental difference worthy of staying loyal to the brand and/or paying more.

A firm may differentiate itself from competitors by:

  • providing a better service such as better in-sale and after-sale services. This may include home delivery by a supermarket, extended guarantees and a range of financial offers such as credit.
  • looking different by focusing on specific features which make the firm distinctive and recognisable. Marketing departments, for example, spend considerable time and money on features such as colour of products, logos and trademarks, design, shape or the convenience of products and outlet layout.
  • branding - here the company builds a certain image into its products. Name association, presentation awareness, personality links seek to maintain product and corporate awareness.

A strong corporate identity and customer loyalty provides the firm with a range of opportunities such as premium pricing.


What can a firm do to increase its appeal and uniqueness? It can try to:

  • Improve quality - a firm needs, if possible, some new angle or development that differentiates its e-reader, smartphone or whatever from the rest. Quite often it's what customers perceive to be 'quality' that matters. Why do people wait years for two to three years for certain supercars like a Ferrari or a Rolls Royce to be specially made for them? Why pay more for certain designer labels?
  • Features - these are characteristics or elements of a product that may help to differentiate it from others, the extras and add-ons.
  • Colour - Customers relate to certain colours in scientifically proven ways. Colour is normally a major part of a firm's marketing mix. Indeed, some colours are closely associated with a particular brand in a market segment. Shell, for example, uses red and yellow, while BP concentrates on green. Cigarette manufacturers are heavily restricted in how they can advertise, but the use of colour can be closely associated with a brand and then displayed in a variety of ways that attempt to circumvent restrictions. Formula One cars, for example, carry the colours of their tobacco sponsors. Perhaps the strongest customer preferences and opinions relate to the choice of car colours.
  • supersize.pngAfter sales service - customers don't like their products to break, so an extended warranty period and a wide-ranging after sales service may encourage purchase of one brand in preference to another.
  • Size - perhaps it does matter! Customers normally seek value for money. Some products are sold as king-size, which we understand to be larger than average. Yes, but what is average? Other products are sold as small and we like this. The market has to establish customer expectation and then build on this. We seem to be attracted to 25% extra or 3 for the price of 2 as we perceive this to really be 'something for nothing'.