D iffe re nti at io n incl u des both ta ngi ble a nd in tang ibl e dimensi ons

D iffe re nti at io n incl u des both ta ngi ble a nd

This preview shows page 13 - 14 out of 19 pages.

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.
Image of page 13
Image of page 14

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture