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Product Differentiation

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Jeremy Webster

on 27 April 2010

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Transcript of Product Differentiation

What Is Product Differentiation? By (in no particular order); Diana Oh Jeremy Webster 41748484 Darwin Molina REFERENCES PRODUCT DIFFERNTIATION Conformance Quality Performance Quality Features Style Branding Premium price Aston Martin DB9 Thank You For Listening What is the Branding Process? Three Authoritive based approaches Source: Burt, Steve & El-Amir Ayman, 2010, ‘A critical account of the process of branding: towards a synthesis’, The Marketing Review, vol. 10, no. 1, p. 70 1.Managerial process (Classical marketing theory)
2.Social-psychology approach
3.Anthropological approach
Brand Differentiation Services Differentiation Solidarity "The common goal of customers to consume brands which reflect their identity in a creative lifestyle, bonding them to other like-minded consumers."(Burt et.al, 2010, p.76) What is conformance quality? -Degree of adherence to design specifications
-Measurable and Quantifiable
McDonalds - BigMac Source: Burt, Steve & El-Amir Ayman, 2010, ‘A critical account of the process of branding: towards a synthesis’, The Marketing Review, vol. 10, no. 1, p. 80 -Producing the same taste wherever or whenever it is bought
-Uniformity of production of raw materials
-Focus on consistency of the product presentation
-Efficient delivery of the product
-Rigorous employee training (Hamburger University)
source:David Berkowitz 2009, Twitter, viewed on 24 April, 2010,<http://farm3.static.flickr.com/2562/4053272759_03f1e72b96.jpg>
Source:Bryan Wentz 2009, SqueekyWheel, viewed on 24 April, 2010,
< http://images.google.com.au/imgres?imgurl=http://img.skitch.com/20081109-8pqwyhnxnqmanj3r1gf5992rkx.jpg&imgrefurl=http://www.squeekywheel.net/%3Fp%3D38&usg=__d5VRJjwadeog9iJHmi6rTAU5Yg=&h=550&w=724&sz=107&hl=en&start=9&um=1&itbs=1&tbnid=Fq8YKc3k9Wk3CM:&tbnh=106&tbnw=140&prev=/images%3Fq%3DMcDonald%2Bkorea%26um%3D1%26hl%3Den%26tbs%3Disch:1>

Customisation What is customisation? -Catering to the needs and wants of different market segments
-Mass customization: the use of a prepared set of variables and organisational framework to produce products for individuals at the same low cost of a mass-production system.
Source: Hart, L,W, Christopher, 1995, 'Mass customization: conceptual underpinnings, opportunities and limits', International Journal of Service Industry Management, vol. 6, no. 2, p 36 Dell - Laptop -Direct sales to customers
-Appeals to different market segments using 4 main models of laptops
Source: Dell Australia 2010, Dell Inc, viewed 24 April 2010, <http://www.dell.com.au/home/laptops> -Build-to-order production
•Mass consumerisation
Repairability What is repairability? -How easy or difficult it is to mend a product when it doesn’t do what it is supposed to do or malfunctions So, how can I help you today? -Dell Laptops
-Offer technical support through live chat, phone and email.
Dell Australia 2010, Dell Inc, viewed 24 April 2010,
-Sell parts for the laptop separately for easy replacement of faulty areas

Source:Dell Australia 2010, Dell Inc, viewed 24 April 2010,<http://accessories.us.dell.com/sna/DellPartsFamily.aspx?c=us&l=en&cs=19&s=dhs&~ck=anavml>
Durability "Measurement of the product expected functional life under natural or stressful working conditions. "(Cooper, 1994, p.24;)
Source: Cooper, (1994). "The durability of consumer durables." Business Strategy and the Environment 3(1): 23-30. Source: Prajogo, D. I."The relationship between competitive strategies and product quality." Industrial Management and Data Systems, 2007, Vol. 107 Issue 1, pp. 69.
Durable goods survive many uses.

Required a more personal, selling approach.

Requires more sellers guarantees than other tangible goods. Source: Sharp,Dawes. “What is differentiation and how does it work?” Journal of Marketing Management, 2001, Vol. 17 Issue1, pp. 739-759. Durability was a common problem in the cookware industry.

First brand that recognised the problem of low durability in cookware products.
Circulon cookware is differentiated by its durability , all of its products have a lifetime guarantee.
Reliability Defined broadly as: "The degree to which measures are free from error and therefore yield consist results”. Source: J. Paul Peter, Journal of marketing research: Reliability: a psychometric basics and recent marketing practices,1979, Vol 16, pp 6-17. “Starts first time every time reliability”
Multiple Points of Differentiation Honda offers a whole range of different products and they are all differentiated differently to suit the needs of their target market.

Differentiation strategy should be aimed at fulfilling the different needs and expectations of each different market and should reflect brand image as a whole Source: Alizon, Fabrice; Shooter, Steven; Simpson, Timothy. Assessing and improving commonality and diversity within a product family, Research in Engineering Design, Nov2009, Vol. 20 Issue 4, p241-253, 13p, 6. Source:Garg, Amit; Tang, Christopher S. On postponement strategies for product families with multiple points of differentiation. IIE Transactions, 1997, Vol. 29 Issue 8, p641-650, 10p. Honda lawnmowers are designed for superior bagging. Our twin blades create smaller clippings, so bags hold 30% more clippings than a single blade mower.
Honda mowers offer our exclusive twin blades. Twin blades cut the grass into smaller pieces, which results in a better looking lawn.
"The use of product design to instil a certain affective response to a product (Creusen et.al, 2005) and thus distinguish and identify the product and by extension the brand (Creusen et.al, 2005, p.64-65; Batra et.al, p.4)" It is a function of a product/brand's:
Symbolic Value-ie Aston Martin Symobilises "cool"
Functional Value-ie Aesthetic appearance
Experentiatl Value-ie DB9 means cool to the consumer
Brand Corrosion??? "Product's points of differentiation must reflect and up hold brand's point of differentiation"White, R. (2004)

Other Wise Brand Corrosion will occur. What is Style in Product differentiation?? 2005 ‘Award for Excellence in the luxury area’ in the annual luxury briefing awards; 2 time consecutive winner of UK’s coolest brand by Cool Brands; Style acts as a communicator of brand image (Jiang Lu et al, 2008, p.4; Creusen et.al, 2005, p.64) Form "The variation of physical design elements such as shape, size or physical structure (Chen, 2009, p.133)" Performance quality is a combination of ;

How well a products core characteristics meet customer expectations, relative to competitors (Smith, 2009, p.22; Cooper, 2000, p.17).

And how “consistently they meet or exceed customer expectations” (Stevenson, 1996; Vörös 2006, p.809). What is It? Dyson Bladeless Fan "Similarity of an innovative product’s form design to others within the brand and the market has implications for its market performance "(Rindova, 2007, p.224). Dyson's Bladeless Form is Very different,why did it need to be? Extremelt Strong and Unique Product Differentiation Can Create Enormous Demand Product Differentiation and Politics? Desai, P., S. Kekre, et al. (2001). "Product differentiation and commonality in design: Balancing revenue and cost drivers." Management Science 47(1): 37-51.
White, R. (2004). "How people buy cars." ADMAP 39(2;447): 15-17.
Robertson, D., K. Ulrich. (1998). “Planning for product platforms”. Sloan Management Rev. 39(4) 19-31
Aston Martin (2010), “Lagonda: Revival of a Luxury Brand”, Aston Martin Media News viewed at 26 April 2010, <http://www.astonmartin.com/search?q=design%20awards&g=mediasite>
Danneels, E. and E. J. Kleinschmidt (2001). "Product innovativeness from the firm's perspective: its dimensions and their relation with project selection and performance." Journal of product innovation management 18(6): 357-373.
Cooper, R. G. and E. J. Kleinschmidt (2000). "New Product Performance: What Distinguishes the Star Products." Australian Journal of Management 25(1): 17.
Sauer, P. J. (2007). Hey, those redcoat know how to roll. Inc., Mansueto Ventures LLC. 29: 98-98.
Sarv, D., M. Khalil F, et al. (2001). "PRODUCT AND SERVICE QUALITY: THE ANTECEDENTS OF CUSTOMER LOYALTY IN THE AUTOMOTIVE INDUSTRY." Production and Operations Management 10(4): 424-439.
Smith, J. L. (2009). "What is Quality Anyway?" Quality 48(6): 22-22.
Stevenson, J.W., 1996. Production/Operations Management. Irwin.
Vörös, J. (2006). "The dynamics of price, quality and productivity improvement decisions." European Journal of Operational Research 170(3): 809-823.
Wernle, B. (2003). "DB9 marks a new start for Aston." Automotive News Europe 8(19): 14.
White, R. (2004). "How people buy cars." ADMAP 39(2; ISSU 447): 15-17.

Product differentiation is when a brand promotes their product by offering unique and valuable characteristics, such as innovation, quality and customer service to gain a competitive advantage (Prajago 2007, p. 70)
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