Achieving Differentiation

Learn how to plan and execute a differentiation strategy that provides greater market share.

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Course: On-Demand

(upbeat instrumental music) Welcome to Achieving Differentiation. Since differentiation from the competition will likely involve higher cost somewhere along the line, companies must plan, and execute their differentiation strategies carefully. This means making sure the uniqueness they intend to provide will add sufficient value to the customer to gain market share or will be compelling enough to allow them to charge a higher price for their goods or services. To develop an effective differentiator, a business must therefore have a good sense of its value proposition to customers, and it must be from the customer's perspective, not the companies. If the company doesn't fully understand why customers in all segments buy from them, then market research may be necessary before a differentiation effort is undertaken. The business landscape is littered with failed attempts to differentiate, and even some that backfired on their originators. It should come as no surprise that customers of your business don't all have the same value proposition. Consequently, understanding the different segments of your market is critical to developing a differentiation strategy. If you implement product differentiation of some kind, you may very well hit the bullseye with one segment of customer while alienating others. In their efforts to maximize the number of customers, businesses tend to lose sight of differentiation or to view it as being in conflict with maximizing sales. But many savvy companies have discovered that their business success is optimized when they differentiate to the point of catering to one's specific segment, and intentionally avoid trying to accommodate everyone. It's also important for businesses to remember that differentiation is rarely something that occurs at only one point in the value chain. It may center around a product enhancement but that enhancement is likely to create ripple effects in places like manufacturing, delivery, quality control, procurement and customer service. One would also expect that differentiation isn't likely to achieve competitive advantage unless the consumer is aware of it. Therefore, almost all differentiators require a supporting marketing strategy that makes it visible to potential customers. Sometimes even making a direct comparison with competition to draw people's intention to it. A company may also need to educate consumers telling them why a product differentiation should be important to them. Adding Techron to Chevron's gasoline didn't mean much as a differentiator until they created advertisements telling people about out the additive and what it does. Marketing takes on the responsibility for awareness, education, and establishing value for the differentiation. In fact, when the differentiation is perceptual, marketing determines the entire differentiation advantage. Most airlines offer the same service at similar price points. It's their perception amongst their customer base that differentiates them.

Advanced Provider : Richard Lehman 5 Lessons · 13m in Arabic, German, English, Spanish, French, Portuguese, Urdu, Chinese

Course Description

A substantial majority of U.S. businesses exist in a competitive environment, which makes achieving and maintaining a competitive advantage critical to long-term success. Because your competitors will also understand this, the business landscape is dynamic, constantly changing as businesses jockey for competitive position. While this leads to an active business environment, it can also lead to over-emphasis on short-term marketing strategies at the expense of establishing longer-term, sustainable advantage. Competitive advantage is about winning and keeping customers. A one-time marketing or promotional campaign, or a continuous stream of marketing gimmicks and costs, will not achieve or sustain this for any business. Rather, businesses must look to an overall plan that may require a single large investment up front to reap success that will last months to years.

In these lessons on Achieving Differentiation, you will learn how to use your value proposition to customers and market research to achieve successful differentiation from your competition. You will why differentiators require a supporting marketing strategy and what that strategy should include. You will also discover the three mistakes that companies make in developing a differentiation advantage and how to avoid those mistakes. Finally, you will gain an understanding of the types of differentiation and why maintaining focus on the value chain is important to sustaining a competitive advantage.

What You'll Learn

Determine your value proposition to customers as the foundation for differentiation
Use market research to clarify your value proposition when it is unclear
Recognize the type of marketing strategy needed to successfully differentiate from competitors
Avoid the three primary mistakes companies make in executing a differentiation strategy
Apply an understanding of the value chain to your differentiation strategy for long-term success
Distinguish the types of differentiation across products versus services

Key Takeaways

A substantial majority of U.S. businesses operate in a competitive environment, making achieving and maintaining a competitive advantage critical to long-term success.
Competitive advantage is about winning and keeping customers, which a one-time campaign or a continuous stream of marketing gimmicks cannot achieve or sustain.
Sustainable differentiation often requires an overall plan with a single large investment up front to reap success lasting months to years.
Differentiators require a supporting marketing strategy, and the course explains what that strategy should include.
Maintaining focus on the value chain is important to sustaining a competitive advantage.

Frequently Asked Questions

What will I learn in this course?

You will learn how to use your value proposition to customers and market research to achieve successful differentiation from your competition, why differentiators require a supporting marketing strategy and what that strategy should include, the three mistakes companies make in developing a differentiation advantage and how to avoid them, and the types of differentiation and why maintaining focus on the value chain is important to sustaining a competitive advantage.

What topics do the lessons cover?

The lessons cover Product vs. Service, Developing Differentiation Advantages, Types of Differentiation, Focus on Value Chain, and a Test Your Knowledge section.

What skills does this course help develop?

This course supports skills in Customer Development, Market Orientation, Marketing Concepts, Marketing Management, Marketing Strategies, and Strategic Marketing.

Why does the course emphasize a longer-term plan over short-term marketing?

Because over-emphasis on short-term marketing strategies can come at the expense of establishing longer-term, sustainable advantage; the course explains that businesses must look to an overall plan that may require a single large investment up front to reap success that lasts months to years.