What Is Differentiation?
Our definition: The process of making your brand stand out
Official definition: “Development or incorporation of attributes (such as benefits, price, quality, styling, service, etc.) that a product's intended customers perceive to be different and desirable” (BusinessDictionary.com).
Origins: Economist Edward Chamberlin first described “product differentiation” as a marketing strategy in his book, Theory of Monopolistic Competition, published in 1933.
Differentiation is not:
Done in a vacuum. Differentiation is all about understanding your competitors inside out. How else would you know what will make your products stand out from the crowd?
Differentiation strategy. Everyone who has a product should differentiate it. But not everyone can employ a “differentiation strategy.” Only businesses that have a clear competitive advantage and many resources may choose to expand by creating specific products for distinct market segments (differentiation strategy) rather than choosing a niche market (focus strategy), lowering their cost to appeal to more customers (low cost strategy), or using other general strategies.
Branding. Comparing yourself against competitors is the foundation of differentiation. While your competition should inform your brand, branding is a more comprehensive process founded on your company’s identity.