What are differentiated products in economics?
A company’s product is a differentiated product if it is uniquely different than those of competitors. If the product is different, the producer can make the case that it is better. If it is a better product, the company can charge a higher price for it.
How many types of product differentiation are there?
three
Several different factors can differentiate a product. However, there are three main categories of product differentiation. These include horizontal differentiation, vertical differentiation, and mixed differentiation.
What are the examples of differentiated products?
“Differentiated product” refers to products that can remain competitive despite being put against competing products that are very similar. Cars, smartphones, computers, shoes, and perhaps most notably, bottled water are just a few common examples of differentiated products.
What are sources of product differentiation?
The sources of product differentiation are many: sets offered by different suppliers will have variations in shape, size and look which make them recognisable one from another. (ii) Secondly, some physical differences may affect standards of performance.
What are the methods of product differentiation?
EIGHT WAYS TO DIFFERENTIATE YOUR PRODUCT FROM COMPETITORS
- You can differentiate your product by size.
- You can differentiate your product by origin.
- You can differentiate your product by branding.
- You can differentiate your product by your packaging.
- You can differentiate your product by adding a simple feature or ingredient.
What are the different patterns of differentiation?
The 7 differentiation methods: Digital resources. Verbal support. Variable outcomes. Ongoing assessment.
What is product differentiation quizlet?
Product differentiation is a business strategy whereby firms attempt to gain a competitive advantage by increasing the perceived value of their products and services relative to the perceived value of other firms’ products or services.
What are the 5 brand differentiation strategies?
5 Strategies to Drive Brand Differentiation
- Emotional Response. This relies on providing an emotional salience that is tied to a product or service.
- Innovation.
- Brand Presentation.
- Unique Experience.
- Pricing.
What are the different types of product differentiation?
Products, in this case, are differentiated by form, shape, feature, function, color, customization, durability, quality, services, etc. 1. Vertical Differentiation Vertical differentiation focuses on differentiation in a product based on quality.
How do you use price to differentiate a product?
Price can be used to differentiate a product in two ways. Companies can charge the lowest price compared to competitors to attract cost-conscious buyers—the retailer Costco is an example. However, companies can also charge high prices to imply quality and that a product is a luxury or high-end item, such as a Bugatti sports car.
How does product differentiation increase market competition?
Product differentiation increases market competition and controls prices for consumers. Product differentiation is fundamentally a marketing strategy to encourage the consumer to choose one brand or product over another in a crowded field of competitors.
What is an example of horizontal product differentiation?
Examples of Horizontal Product Differentiation. Choosing between different mineral water brands. The customer doesn’t know the real difference but chooses one anyway. Two ice-cream stalls selling similar ice-creams, but the customer chooses the one closer to them because (s)he is indifferent between them.