product differerntiation and product positioning

Product differentiation
An organization seeks to offer extra advantages to its customers. It identifies particular elements that are important to its customers and offers them increased benefits in this area. If it gets this right, it is able to charge a premium price for its product, allowing it to recover its higher costs and increase its margin and profit. The product must continue to be valued by the customer if the price premium is to hold up.
Product position
Every business needs to choose their position in order to compete in the market place and gain sustainable competitive advantage. For example, cost leadership, differentiation or focus. etc. After you consider the competitive environment, you could target your poducts braodly, covering most of the market or narrowly, focusing on a niche market.

2008-05-25 17:54:52 補充：
When an organization undertake product differentiation across the broad range of the market. The cost of differentiation while serving the mass market of customers, may be high.

2008-05-25 17:55:00 補充：
Of course the differentiatior can not ignore cost since a poor cost position will erode any gains that result from a price premium.

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Product Differentiation :
Simple = " Make my product different from others "
eg. MacDonald is selling Hamburger very well.
so, Burger King has to differentiate their hamburger, let it be different
MacDonald.
Why Burger King need to do so ? Because , they need to avoid face
to face, direct competition with MacDonald, they can't win.

So, How do Burger King make their product Different ? Well, by,
telling customers that their Beef is BBQ Beef from all their ads.


Product Positioning :
Simple = " What position in the market of your product are "
and
Position = " what image & function the product are compare to others"
eg. Sikeo is making Watch, the one for you to see the time.
They posiiton themselves to make Middle Class watch,
Omega is making Watch, they position at High End Class, so,
their watch are all very expesnsive.
And they use Golf Game as their promotion strategy, a game for rich
people.

Is that interesting ? that's Marketing.

producent differentiation
is the process of distinguishing the differences of a product or offering from others, to make it more attractive to a particular target market

product positioning
is the process by which marketers try to create an image or identity in the minds of their target market for its product

mostly with profit with differentation. Not a must to be hight profit.