Definition of Differentiation Strategy

Differentiation strategy outlines a strategic framework that is chosen by the businesses to differentiate their services or products to beat their competitors in the same market. Product differentiation can be done in terms of improved quality, new features, better product design, features, improved brand image, or customer service. Differentiation strategy is adopted by businesses to gain a competitive advantage over their competitors. This can be achieved by analyzing the strengths and weakness, customer’s needs, market gap, expected perceived value from the customer base.

Following are the benefits of the differentiation strategy:

• Reduce price competition
• Better profit margins
• Consumer brand loyalty
• Unique products