The research on evaluating a differentiation strategy is still evolving. He left academia to start up and run three high-growth companies, including an $80 million runaway success story. In this research, five dimensions of differentiation strategy were studied including pricing, value-added products, operating procedures, distribution network and customer incentive programmes. If it can pass these three critical checks, it is worth developing into a broader differentiation strategy: Differentiators can’t be fabricated. In strategic marketing and management literature, the differentiation strategy has been based on the premise that improved/innovative outputs will translate into greater demand for the business’s outputs (Buzzell and Gale, 1987). Don’t know where to start? You need to make that all-important expertise visible to the outside world. It will also inform your selection of issues to write about to make your expertise more visible to your target audience. Differentiation Strategy. As we outline in The Visible Expert, there are certain strategies and techniques that can elevate the visibility of your expertise in the marketplace. to learn more about what sets sales winners apart from runners-up. A. organic B. mechanistic C. integrated D. centralized. describes what criteria companies use to select one service provider over another. One of the most common selection criterion is expertise, and it is the factor that most often tips the scale in favor of the contract-winning firm. Differentiation is possible along one or more of various dimensions — product features, quality, customer service, guarantee, distribution, delivery, product customization, etc. According to our definition above, this is a differentiation strategy. B) earn the highest profit margins of any company in the industry. Usually, it involves highlighting a meaningful difference between you and your competitors. Subscribe to Our BlogProfessional Services Marketing Today, Branding and Marketing for Professional Services, 1851 Alexander Bell Drive, Suite 350, Reston, VA 20191. is the way in which you make your firm stand out from otherwise similar competitors in the marketplace. b. Differentiation strategies based on distribution systems are generally unsuccessful. 42. In fact, the fastest growing firms (those that grow at least 20% year over year) take it a step further and are three times as likely to use original research in their content marketing strategy. There are some big advantages to using a differentiation strategy. Relationships — both social and professional — are still important, but only when there is an awareness of your expertise. A differentiation strategy involves the firm creating a product or service, which is considered unique in some aspect that the customer values. Types of Product Differentiation . Differentiation strategy: Differentiation strategy Approach under which a firm aims to develop and market unique products for different customer segments. It entails development of a product or service, that is unique for the customers, in terms of product design, features, brand image, quality, or customer service. These data will give you a feel for what is possible when a comprehensive differentiation strategy is fully implemented. Coca-cola. In a differentiation strategy, a firm seeks to be unique in its industry along dimensions that are widely valued by buyers. Previously, he had hired a life-long friend to help with his marketing. Increase in Perceived Expertise. What Is the Cost of Video Production for the Web. It’s just not relevant yet. . A differentiation strategy calls for the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition. However, we’ve learned some important things already. Monitor the new business pipeline. But the only proven way to make your expertise visible and turn it into a credible differentiator is to have a clear strategy. Author: Lee Frederiksen, Ph.D. Who wears the boots in our office? The research on evaluating a differentiation strategy is still evolving. Research will help you align your firm’s offerings with the desires and preferences of potential clients. The value of these different techniques, when put together as part of a differentiation strategy, has been proven time and again by clients that go through our, Research will help you align your firm’s offerings with the desires and preferences of potential clients. A differentiation strategy is appropriate where the target customer segment is not price-sensitive, the market is competitive or saturated, customers have very specific needs which are possibly under-served, and the firm has unique resources and capabilities which enable it to satisfy these needs in ways that are difficult to copy. Differentiation Strategy Rather than costs, a firm using the differentiation strategy tries to invest in and develop features that differentiate its goods or services in ways customers value. We conducted extensive research on highly visible experts and the professional services buyers who hire them. These could include patents or other Intellectual Property (IP), unique technical … Differentiation strategy is disadvantageous for a firm because of the fact that: Economies of scale It makes them well positioned to withstand price competition from rivals Downplaying research and development can slow cost leaders’ ability to respond to changes once they are detected. This particular strategy focuses on market research data to understand the client and also to identify what the current competitors are doing to fulfill what the market is expecting. Many cost saving activities are easily duplicated B. Thus, Differentiation strategy is being used by all top companies for their products. Think of it as the DNA of your differentiation strategy. 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