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. Marketing

    The activities of a company associated with buying and selling ...
  6. Competitive Advantage

    An advantage that a firm has over its competitors, allowing it ...
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. Over the past 10 years, advertising strategies have evolved as a result of technological development as the internet has provided new channels for advertisers to reach a larger audience.
    Personal Finance

    How The Internet Web Ad Industry Works

    Over the past 10 years, advertising strategies have evolved as a result of technological development as the internet has provided new channels for advertisers to reach a larger audience.
  8. For two years, Tinder has been able to stay afloat without relying on any kind of revenue stream. Now, the free match-making mobile app is exploring a new money-making model in an effort to cash in on the international $2 billion-a-year online dating industry.
    Personal Finance

    Tinder to Start Swiping for Cash?

    For two years, Tinder has been able to stay afloat without relying on any kind of revenue stream. Now, the free match-making mobile app is exploring a new money-making model in an effort to cash ...
  9. As technology has evolved, the landscape of the music industry has changed from radio broadcasts to mp3 and now streaming services.
    Entrepreneurship

    Will Pandora And Spotify Disrupt Music Royalties?

    As technology has evolved, the landscape of the music industry has changed from radio broadcasts to mp3 and now streaming services.
  10. Personal Finance

    How does Kickstarter make money?

    Learn how Kickstarter earns its profits, and how users raise money to get the funding they need to make their grand plans reach fruition.

You May Also Like

Hot Definitions
  1. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  2. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  3. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  4. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  5. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  6. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
Trading Center