Product Differentiation to Grasp the Market Share


Product Differentiation to Grasp the Market Share

Product differentiation strategy is used to distinguish products or services from similar offerings. A positive differentiation of products can increase the perceived value and attracts the potential customers. Product differentiation can be done by strategic and creative approaches in which the differentiating factors may be price, features, form, quality, durability, reparability, reliability, performance, customization and style. In the case when the companies are offering services or when it is not possible to differentiate the physical product then the service differentiation can be seen by various differentiating approaches such as ordering feasibility, installation services, delivery, customer consulting, customer education and repair, etc.

Why marketers need to differentiate the products and services

Various companies are offering products with new and innovative features; marketers cannot estimate the entry of new entrants and their new products and strategies, because of such rapid market change it is very tough to predict the existed product’s future. More importantly, severe competition due to product differentiation can eliminate the similar products from the markets by applying repeated counter product differentiation strategies.

However, product differentiation can grasp the entire market share by offering products with unique features, by creating product awareness and by communicating values created by the products and services. Increasing perceived value of the products and services can strengthen the customer preferences to buy the products and services.

Differentiating factors 


Product differentiation and price differentiation are two different differentiation strategies in order to attract the prospective customers to create sales even there are a number of similar offerings. But here in product differentiation, marketers use price as a factor to differentiate the product from others or competitor’s products.

Example: Price variations between various brands or products and offers, price discounts, coupons, and offering mini packs with low prices.


Offering products in different forms can attract the buyers because buyers show interest to purchase known products which are in different forms. Product differentiation can be shown in size, shape and physical state also. Customers feel enough confident to buy such known products because they like to try differentiated products with fewer chances of uncertainty.


  • Nescafe coffee – Nescafe Chocolates
  • Batch soaps – Bath gels
  • Hair setting gels – Hair setting sprays


Unique product features highlights the usefulness of the products and services to the target customers. It means the way how the product features or technology used can maximize the benefits associated with the products. For example, a differentiating feature of nonstick pans with induction cooking base. Here customers can get the benefit from this feature. So the customers buy products with differentiated features in order to get benefited with more than one feature.

Lakme cc complexion care cream is a differentiated product and its benefits include sun protection (SPF 20), moisturizer, brightener, and can act as a makeup base for an even tone.

Features of Samsung Galaxy S7 –Beautiful, seamless unibody, water, and dust resistant, dual pixel 12 MP camera for low light performance, expandable micro SD up to 200 GB, etc.


Products are customized in order to fulfill each customer’s requirement. This strategy is used to attract the buyers by designing products, services, and programs customized for each and every individual customer’s requirements. Customers always search for unique products and more particularly suitable products for the own individual requirements.

Examples: DELL Laptops, Asian paints


One of the most important differentiation factors is product quality. Qualitative products and services have always market demand because customers compare various similar products and they can identify very minute quality variations while they are taking purchase decisions.

Examples: Havells, Toyota, etc

Products with different grades have different market demands; we cannot say that the highest grade products can only create sales. Here ability to pay and customer’s income levels decide whether to buy the products or not and what grade products they have to buy.


Durability is the measure of a particular product’s operating life under stressful or normal conditions. Customers give preference to buying durable products instead of unnecessary repeated purchases. Sometimes customers may sacrifice other product differentiation factors to get the durable products or products with long operating life. However, product differentiation with high durability can attract the potential customers.

For example, Asian paints Apex Duracast Swirltex offers a range of engraved finishes with various benefits such as antialgal, UV resistance,  tough textured and plaster protection etc.

Duracell pre-charged and rechargeable batteries are ideal for digital cameras, portable audio products, gaming devices and for other high battery drain items.


One another important product differentiation factor is reparability of the products and it is the measure of ease of repairing a product when it fails or malfunctions. If a product is able to be repaired easily then it becomes the most supporting factor for the customer decision making while purchasing products from a pool of similar products.

For example, LG G5 and LG G4 mobiles have high ease of reparability which includes relatively simple opening procedure, modular components, and cheaper part replacement, etc.


Reliability is one of the most important and intangible assets that a brand possesses. It is the promise of the brand to offer better products and services. It is the probability of the products successful functioning or that it will not malfunction or fail.

For example, Lexus cars are famous for its reliability, according to consumer reports it is ranked among top 10.

Volvo vehicles are the most reliable and safest vehicles this is the reason the manufacturers become successful in products differentiation on the basis of reliability.

Service differentiation

When a company is offering services or when it is not possible to differentiate the physical product then those companies distinguish their services from similar offerings by using service differentiation strategies. It may be through the modification of existed services or addition of new services or the combination of both. Here the differentiating factors may be

  • Providing ordering ease to the customers to place orders easily and providing various options to filter and select payment feasibility and providing adequate product information, etc.
  • If the companies are offering products with better delivery services, then the customers prefer to buy such products on the basis of company’s efficiency in safe and speedy deliveries.

Example: Domino’s Pizza, DTDC courier services, etc

  • Using guarantees and warranties as differentiating factor can benefit the organization in creating competitive advantage.
  • Tie-ups with various financial institutions and providing loan facilities with easy installment schemes can maximize the customer loyalty and sales.
  • Providing free installations or giving step by step installation instructions can help the customers in assembling or installing easily.

Advantages of product and service differentiation

  • To distinguish the products and services from the similar offerings
  • To increase the perceived value to attract the potential customers
  • To maximize the brand image and customer loyalty
  • To create competitive advantage
  • To reduce the directness of competition
  • To attract the potential customers
  • To grasp the market share and to bring radical change
  • To strengthen the product range