Product Differentiation

AAA

DEFINITION of 'Product Differentiation'

A marketing process that showcases the differences between products. Differentiation looks to make a product more attractive by contrasting its unique qualities with other competing products. Successful product differentiation creates a competitive advantage for the seller, as customers view these products as unique or superior.

INVESTOPEDIA EXPLAINS 'Product Differentiation'

Product differentiation can be achieved in many ways. It may be as simple as packaging the goods in a creative way, or as elaborate as incorporating new functional features. Sometimes differentiation does not involve changing the product at all, but creating a new advertising campaign or other sales promotions instead.

RELATED TERMS
  1. Augmented Product

    A commodity that has both the primary physical attributes and ...
  2. Parity Product

    A brand of good that has enough similarities with other brands ...
  3. Product Placement

    A form of advertising (usually not involving ads) in which branded ...
  4. Prophet's Reputation Management ...

    An index created by strategic brand and marketing consultancy ...
  5. Porter's 5 Forces

    Named after Michael E. Porter, this model identifies and analyzes ...
  6. Value Added

    The enhancement a company gives its product or service before ...
RELATED FAQS
  1. Who are Fiat Chrysler Automobiles' (FCAU) main suppliers?

    Fiat Chrysler Automobiles, commonly known as FCAU, designs, manufactures and sells passenger automobiles. It is the world's ... Read Full Answer >>
  2. What is the difference between product differentiation and price discrimination?

    Product differentiation and price discrimination are two strategies used in marketing and economics. Product differentiation ... Read Full Answer >>
  3. What are the characteristics of a monopolistic market?

    A monopolistic market is a market structure that has the characteristics of a pure monopoly. A monopoly exists when there ... Read Full Answer >>
  4. What should be included in a restaurant business model?

    The most important elements of a restaurant business model include the restaurant's unique value proposition, menu choices, ... Read Full Answer >>
  5. What do you need to know to create a business model?

    A business model lays out the idea for a business, along with the step-by-step plan for making the business profitable. To ... Read Full Answer >>
  6. What's the biggest sports endorsement deal ever signed?

    According to Forbes, basketball player Derrick Rose holds the largest endorsement deal as of 2014; the deal is for more than ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Industry Handbook

    In this feature, we take an in-depth look at the various techniques that determine the value and investment quality of companies from an industry perspective.
  2. Economics

    Economics Basics

    Learn economics principles such as the relationship of supply and demand, elasticity, utility, and more!
  3. Active Trading

    Competitive Advantage Counts

    What's the best indicator of a company's future success? Its ability to succeed when others fail.
  4. Professionals

    Advertising, Crocodiles And Moats

    Memorable advertising is a brick in the fortress that keeps competitors at bay.
  5. Home & Auto

    4 Types Of Home Renovation: Which Ones Boost Value?

    You think your updated house looks great, but potential buyers may not feel the same way.
  6. Professionals

    Lead The Charge With Product Development

    If you like to keep your finger on the pulse of the market, this could be the career for you.
  7. Personal Finance

    How Youtube Makes Money Off Videos

    YouTube's revenue is growing even if the profits aren’t, and some growth is better than nothing.
  8. Personal Finance

    How To Calculate ROI Of A Marketing Campaign

    To make the most of your marketing spend, you need to know how to measure its results.
  9. Personal Finance

    The Top 6 Companies Owned By Google

    Google owns an incredible number of companies. These are its top six acquisitions.
  10. Professionals

    Why Advisors Should Focus on Relationships

    Successful financial advisors share a secret: It's about the people, not the numbers.

You May Also Like

Hot Definitions
  1. Fracking

    A slang term for hydraulic fracturing. Fracking refers to the procedure of creating fractures in rocks and rock formations ...
  2. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  4. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  5. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  6. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
Trading Center