Product or Service Differentiation - Coursework Example

Download file to see previous pages Some critics argue that applying cost leadership and product differentiation strategies work best when applied simultaneously to achieve a sustainable competitive advantage. On the other hand, cost strategies are easy to duplicate by competitors hence only offer a temporary competitive advantage and attract unnecessary competition. It is in this regard therefore that Kotler and Keller (2009) advocate for product differentiation as the key to competitive advantage. Product differentiation entails production of a unique product from the competitors as perceived by customers. The difference is based on product features, service attributes, price, a relationship of firm and customers, linkages within or between firms, distribution channels, product mix, service and support among others (Piana, 2003).
According to Hooley, Saunders & Piercy (2004), successful product differentiation can be attained through rigorous advertising, public relations, and research and development. Availability of resources is also essential as it gives a firm the capability to continue improving the product through research and maintaining a competitive advantage. Piana (2003) observes that differentiation can be vertical or horizontal where vertical differentiation focuses on order of goods according to quality; low quality, medium or high-quality, and that high-quality goods are higher priced as opposed to low-quality products which are of low cost. The difference may not exist but customers may perceive high priced good as of good quality. Horizontal differentiation, on the other hand, is based on tastes, styles, and color among other features. Product differentiation is carried where a target segment exists based on the unique needs of customers.  ...Download file to see next pagesRead More