This would seemingly make creating a differentiated brand in the salt business next to impossible. Few goods are more basic and generic than table salt. As a result, advertising in general and brand building in particular are important to this strategy.

Successful use of a differentiation strategy depends on not only offering unique features but also communicating the value of these features to potential customers. Seven decades later, the Coleman Stove remains a must-have item for campers. Figure 5.8: Coleman’s patented stove was originally developed for use by soldiers during World War II. Lovers of the outdoors have been willing to pay more to purchase Coleman’s goods than they would to obtain lesser brands, because having equipment that you can count on to keep you warm and dry is worth a price premium in the minds of most campers. Cheaper brands are much more likely to have problems, and at a time when the consumer is most dependent on the camping item. Coleman’s sleeping bags, lanterns, and stoves are renowned for their reliability and durability. If camping equipment such as sleeping bags, lanterns, and stoves fail during a camping trip, the result will be, well, unhappy campers. In terms of the two competitive dimensions described by Michael Porter, using a differentiation strategy means that a firm is competing based on uniqueness rather than price while continuing to seek to attract a broad market (Porter, 1980). Coleman camping equipment offers a good example. The message that such a firm conveys to customers is that you will pay a little bit more for our offerings, but you will receive a good value overall because our offerings provide something special or valuable to you. A firm following a differentiation strategy attempts to convince customers to pay a premium price for its goods or services by providing unique and desirable features ( Figure 5.7 “Differentiation”). The Nature of the Differentiation StrategyĪ famous cliché contends that “you get what you pay for.” This saying captures the essence of a differentiation strategy.

Know the advantages and disadvantages of a differentiation strategy.

Describe the nature of differentiation.

Calibre systems target worker pay