When customers step foot inside a grocery store, they are bombarded with options. As you know, the market is saturated and you need to find a way to differentiate your products. Without the right differentiation, customers won’t even consider buying your product, considering they have many options.
In this article, we are going to talk about product differentiation and its importance, focusing on consumer goods products.
What is product differentiation?
Product differentiation is a strategy to distinguish your products from those of competitors. Look at product differentiation as what makes your product stand out from the crowd.
Why do customers buy your product? Why is it special compared to other products in its category? Does your product provide something that others don't? These are just a few questions that can help you find the right product differentiators.
Don’t worry if you haven’t figured out the differentiators yet. You don’t have to start from scratch, you can develop them as you promote your product.
A differentiator can be related to anything from packaging to the values of the company. For instance, a product that is 99% natural or one that is eco-friendly has a powerful differentiator. Depending on the type of product, your resources, and the needs of your target audience, you can find differentiators that will help you gain a competitive advantage.
Types of product differentiation
When they decide to buy a product, customers look at different types of differentiators. They are divided into three groups:
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Vertical differentiation
Vertical differentiation is an objective one. It is when customers rank products from best to worst considering objective measurements like price, quality, quantity, and so on.
Even though the factors that are taken into consideration are objective, customers have different objectives, needs, and wants. For example, one customer might put a higher value on price and not care about the ingredients of the product, while another customer could choose a more expensive product because it has more natural ingredients.
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Horizontal differentiation
The horizontal differentiation is a subjective matter. When shoppers don’t have any objective factors to consider, they reside in choosing products based on what they like or dislike.
For example, a shopper wants to buy chips. There is no objective factor to ranking chips flavors. They will just choose the flavor of chips they enjoy the most.
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Mixed differentiation
When making a more important purchase decision, customers might use mixed differentiation. They will consider both objective and subjective factors to be sure that they made the best decision.
For instance, if customers want to purchase big home appliances, they will first consider objective factors like price, dimensions, and electricity consumption. Then, they will look at subjective factors such as design, color, etc.
Product differentiation at the point of sale
What if we’ve told you that besides regular differentiators (price, ingredients, etc.) there is a differentiator that can make you stand out right at the point of sale?
Customers want more than products, they want experiences. If you want to offer shoppers an amazing experience in-store and have a unique product differentiator, you should try out Tokinomo.
The brand activation robotic POSM is the best solution for brands that want to make their products stand out from the crowd. Because of Tokinomo’s technology, your campaign options are almost unlimited. You just need a creative idea and Tokinomo will take care of the rest.
Advantages of product differentiation
Still not sure how product differentiation can help your brand? Here are 3 advantages you should take into account:
Gain competitive advantage
Different always stands out. In a store where all products blend with one another, a strong product differentiator will help you gain the attention of shoppers.
Increase brand loyalty
When you have powerful differentiators, you have the opportunity to make your brand memorable. Customers want to purchase products from brands they resonate with and from those that are top of mind. Product differentiation will help you increase brand loyalty in the long term.
Increase sales
The ultimate goal for any FMCG brand is to increase sales in-store. With strong product differentiation, you will be able to increase sales right at the point of purchase. Why? Because shoppers won’t think twice before buying your product.
Making your product stand out can be a challenging task considering the variety of consumer goods products available nowadays. However, with the right differentiators and a bit of innovation, you can achieve this goal. In the long run, product differentiation is your biggest ally against your competitors.
