D
iffe
re
nti
at
io n
incl
u
des
both
ta
ngi
ble a
nd
in
tang
ibl
e
dimensi
ons
.
Tt:
111gible
d[/
:
f ere11tiation
is
co
n
ce
rn
ed
w
ith
th
e
observab
le ch
aracteristics
of
a
pr
o
du
ct
or
servi
ce
1h
ar
are rel
eva
nt to cu
stomers·
rr
eferences
and
ch
oice
pro
ce
sses,
fo
r e
xampl
e
si
ze.
shap
e,
co
lo
r,
we
ight
, des
ign
, mate
ri
al,
and
perform
an
ce
a11ribu1
es
such
as
reliability
.
consi
s
tency
, taste,
speed,
dur
ability
, a
nd
sa
fety.
Tang
i
ble
differenLiati
o n al
so
ex
ten
d~
to
prndue1s
a
nd
serv
ices
1h
a1
co
mpl
eme
nt
the
product
in
q u
est
io n:
de
li
very
.
afte
r-
sales !)ervices,
and
accessori
es.
O
ppo
rtunities
for
inta
ngible
diffe
re
ntiati
on
a
rise
beca
u
se
the
va
lu
e cha! c
us
-
tom
ers
pe
r
ce
ive
in
a
produce
is
seldom
de
te
rmin
ed
sole
ly by o bser
vable
pr
o
duce
f
ea
t
ures
or
ob
j
ec
tiv
e
pe
r
forma
n
ce
c
ri
te
ri
a.
Socia
l, e
moti
o
nal
, p
syc
ho l
og
ica
l.
a
nd
esth
et
ic
co
ns
iderations
are
prese
nt in m
os
t c
ustom
er choices.
For
co
ns
um
er
goods
and
serv
ices
th
e
desire
for
s
tatu
s, e
xclusi
vity,
in
d iv
idu
a
li
ty
,
sec
urity
, and
co
mm
unity
are
powerfu
l moti
va
tional
forces. \
Vhe
re a
produc
t or
service
is m
ee
tjng
co
mpl
ex
custo
me
r n
eeds
,
differentiati
on ch
oices
inv
olve
th
e o
verall
im
age
of
the
firm
and
its o
fferi
n
g.
Im
age
differentiaLion
is e
sp
ec
ia
ll
y
im
po
r
tant
for
those
p ro
du
cts and
serv
ices
whose
qualiti
es
and
performa
n
ce
are
diffi
c
ult
to
ascerra
in
at
the
t
ime
of
pur
chase
(so
-ca
ll
ed
ex
p
er
ien
ce
goo
d
s)
.
Th
ese
include
cos
m
etics
, m
ed
ical
se
r vi
ces,
and
educa
tion
.
Di
ffere
ntiation
and
S
egme
ntation
DifferenciaLion
is
differ
e
nt
from
segmenta-
ti
on. D i
ffere
nti
a
ti
o n
is
co
n
ce
rned
wit
h h
ow
a
firm
co
mpet
es-
the
ways
in
whi
ch
it
ca
n o
ffer
uniqu
ene
ss
co cu
sto
mers.
Such
uniqu
eness
might
rel
ate
to
co
n
sist-
en
cy
(M
cDo
na
ld
's), re
li
ab
ili
ty
(F
edera
l
Exp
ress), stacus (
Am
e
ri
can
Exp
r
ess),
qualit
y
(B
M
W),
and
inn
ova
ti
on (
Appl
e).
Segmentation
is
co
n
ce
rn
ed
w
ith
w here a
firm
com-
pe
t
es
in
te
rms
of
cu
stome
r
grou
ps,
locali
ties,
an
d p
rodu
ce
types
.
Wh
ereas
seg
m
entat
io n is a t
ea
tur
e of
mark
e1 st
ru
c
tur
e,
diff
e
rentiati
o n
is
a
st
rat
eg
ic
ch
oice
made
by a
firm
.
Differen
ti
at
ion m
ay
le
ad
co
focus
i
ng
u
pon
pa
rti
c
ular
m
arke
t
seg
ments
, b
ut
not
necessaril
y.
IK
EA, McD
ona
Jd·s, Ho nda,
and
Star
buc
k s a
ll
pursue
diflerenria
tion,
but
p
os
iti
on
th
emselves
within
the mass m
ar
k
et
spa
nnin
g
mu
ltip
le
dcmog
rarhi
c
and
s
ocioeco
no
mi
c
segme
nts
.•·•
Th
e
Sustainabilit
y
af
Di/
J'e
re
nt
iation
Advantag
e
D i
fte
renLia
ci
o n o
ff
ers a m o
re
sec
ur
e
ba
s
is
fo
r
co
m
petit
i
ve
advantag
e than
low
cost
d
oes.
A
posit
i
on
o f
cost
advan-
t
age
is
vuln
era
bl
e to
th
e e
me
r
gence
of
ne
w
compe
tit
ors
fro
m l
ow-co~
1
co
untri
es
and
to
adve
rse moveme
nt
s in e
xc
ha
ng
e rates.
Cos
t
adv
a
ntage
c
an
al
so
be
over
-
turned
by
inn
ova
ti
on:
di
sco
u
nt
brokerage
fi
rm
s
were
und
er
c
ut
by i
nt
ernet
broke
rs.
