Product Strategy: Differentiation, Mix, Branding, and Development

Posted on Mar 27, 2025 in Business Administration and Management (BAM)

Product Attributes for Differentiation

Decisions on product attributes as a source of differentiation.

Product Differentiation Sources

  • Product Versions: Variations offered.
  • Features: Specific characteristics.
  • Quality of Results: Performance level.
  • Level of Compliance: Meeting standards.
  • Reliability: Consistency of performance.
  • Durability: Lifespan of the product.
  • Repairability: Ease of fixing.
  • Style: Aesthetic appeal.

Design Differentiation

Achieving distinctiveness through product design.

Service Differentiation

  • Ease of ordering
  • Delivery speed and reliability
  • Installation services
  • Buyer training
  • Maintenance and repairs

Product Mix and Line Management

System Products

Groups of different but related products designed to function compatibly.

Product Mix or Product Assortment

The complete set of products and articles offered by a seller.

Product Line

A group of related products within the product mix.

Product Mix Dimensions:

  • Scope: The number of different product lines the company offers.
  • Depth: The number of variants offered for each product in a line (or the average number of variants across the mix).
  • Length: The average number of items offered per line (or the total number of items in the mix).
  • Consistency: The degree to which various product lines relate in end use, production requirements, distribution channels, etc.

These dimensions of the product mix allow the company to grow its business.

Product Line Analysis and Decisions

Key areas for analysis and decision-making include:

  • Sales and Profits: Evaluating the performance of items within the line.
  • Market Profile: Understanding the customer base for the line.
  • Length of the Product Line: Decisions regarding:
    • Line extension
    • Line filling
    • Modernization
    • Featuring specific items
    • Pruning the line
  • Packaging: Design and function of the product container or wrapper.
  • Labeling: Information provided on or with the package.
  • Warranty: Promises regarding product performance.

Branding and Brand Equity

Brand Functions

A brand serves multiple functions:

  • Identifies the manufacturer
  • Simplifies product management
  • Helps organize accounting records
  • Provides legal protection for unique features
  • Signals a certain level of quality
  • Creates barriers to entry for competitors
  • Serves as a competitive advantage
  • Helps secure future earnings

Consumer-Based Brand Equity

The differential effect that brand knowledge has on consumer response to the marketing of that brand.

  1. It arises from the differences in consumer responses.
  2. These differences result from what consumers know about the brand (brand awareness and image).
  3. The differential responses are reflected in perceptions, preferences, and behaviors regarding all aspects of the brand’s marketing.

New Product Development Factors

Challenges in New Product Development

Factors that can hinder the development of new products:

  • Shortage of good ideas in certain areas
  • Fragmentation of markets
  • Legal or social constraints
  • High development costs
  • Lack of capital
  • Shorter required development periods
  • Reduced product life cycles

Idea Generation

Methods for generating new product ideas:

  • Interaction with others (customers, employees, competitors)
  • Creative techniques:
    • Attribute listing
    • Forced relationships/associations
    • Morphological analysis
    • Reverse assumption analysis (investment analysis of situations)
    • New contexts
    • Mind mapping

Factors Influencing the Adoption Process

The process by which individuals adopt new products is influenced by adopter characteristics and product features.

Adopter Categories (Classification of Persons)

  • Innovators: Opinion leaders; seek competitive advantages in new technologies, often insensitive to price, adopt if they find custom solutions and good service.
  • Early Majority: Thoughtful pragmatists; form the main market, adopt when a product shows its advantages and has been tested by others.
  • Late Majority: Conservative skeptics; dislike risk, are not interested in technology, and are price-sensitive.
  • Laggards: Have strongly entrenched traditions; reluctant to adopt until necessary (“no longer able to avoid it”).

Product Characteristics Influencing Adoption

  • Relative Advantage: The degree to which the innovation appears superior to existing products.
  • Compatibility: The degree to which the innovation fits the values and experiences of potential consumers.
  • Complexity: The degree to which the innovation is difficult to understand or use.
  • Divisibility (Trialability): The degree to which the innovation may be tried on a limited basis.
  • Communicability (Observability): The degree to which the results of using the innovation are observable or describable to others.