Marketers need to know which approach is best suited for their needs before creating a marketing strategy. There are six main approaches, which you can see below.

Marketing orientation refers to the type of distribute that an organization decides to employ in its distribution channel due to what it believes will be most profitable.

The six orientations are:

Different companies have different strengths and weaknesses in terms of their production capacities or financial resources, or perhaps even market access restrictions by governments in some countries – these all dictate which types of orientations are most suitable for them. For example, it would be illogical for a company with the capabilities of producing huge quantities per day at low costs not go down the mass production route, whereas smaller firms with less production capacity to choose from may want to go down the differentiated product approach.

Differentiate marketing is a form of marketing that focuses on developing or highlighting unique benefits. The goal is for customers to realize how these differences benefit them, thus motivating them to purchase the company’s offering rather than one in another industry. Differentiating can also include creating new market segments, such as “men who care about their appearance”. Marketers do not know whether other companies are taking this approach, so they must research and explore alternative pathways themselves.

Product line differentiation – A firm produces several related products (i.e., various sizes of toothpaste) to target different types of consumers with no overlap among competitors’ offerings or unnecessary duplication within its own line.

Product differentiation – The firm offers a product with multiple attributes so as to give it added value in the target market’s perception, such as adding extra side dishes onto a menu item or including optional accessories with the purchase of a new car. Sometimes, firms may offer completely different but similar products for sale through their distribution channels (as is often found in “discount stores”). Other times, differentiation may be achieved by improved customer service, delivery options and payment methods.

Differentiation can also include creating new market segments that other companies might not see as profitable enough to serve: for example, men who care about their appearance and want hair removal services; young adults purchasing items on credit; or people who buy organic food rather than more traditional alternatives.

Product positioning or place marketing is a method that aims to position a product in the market vis-a-vis competitors. The theory of Place Marketing holds that an organization needs an explicit and carefully planned differentiation strategy, not just a random mix of products on offer. In practice, product differentiation strategies are usually combined with service delivery systems to achieve competitive advantage through the entire customer relationship life cycle.

The main goals of product positioning include:

Differentiation can also be approached from an organizational perspective rather than a product one: for example, fast food chains selling “indulgence” (i.e., extreme pleasure) not only with respect to the dining experience but also convenience; ambiance; speed; and even the type of treatment with the employees.

Think about what you use in your daily life. Where did it come from? Who is the supplier? How much did it cost you? What are some other alternatives out there? Can you think of a company whose goal is to provide more than one product or service instead of just one thing? How can they be differentiated over another competitor’s initial

offering(s)? Do they focus on the multi-product approach or do they sell different products to consumers within their own industry (i.e., Ford vs. Honda)?

Price differentiation – A firm may offer identical products at different prices, for example during periodic sale events; each price ensures that no excess demand occurs for this product because of its low price, and at the same time the company can extract most of the potential consumer surplus.

Product bundling – The firm sells two or more products together at a reduced price compared to what the products would cost if purchased separately. For example, mobile phone service providers often bundle text messaging, voice minutes and data plans together.

Tangible product differentiation – A tangible product is one that can be touched and felt by customers. Firms use tangible product differentiation to make their products more appealing to customers. This type of differentiation is often used in conjunction with promotional activities, such as advertising, packaging, and styling. For example, clothing companies often use different colors, shapes, and fabrics in their designs to make their clothes stand out from the competition.

Service differentiation – Service differentiation is the practice of developing and maintaining a unique position for an organization or brand in the minds of its target market through delivering superior value and benefits over competitors, thus ensuring customer commitment and satisfaction. It is related to product differentiation and place marketing. The key difference between service differentiation and product differentiation is that service differentiation focuses on creating value from all possible touch points with customers, whereas product differentiation focuses on tangible features only.

In the 1990s, along with technological progress allowing TV channels to be transmitted via satellite rather than terrestrial antennas, pay-TV channels were launched in Europe that would broadcast only movies without any advertising. These movie channels would create a differentiated image by showing classic movies from the early years of Hollywood studios and European arthouse films, which were not available on the other channels.

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Image differentiation – Firms may use different images to differentiate their products from those of their competitors. For example, a company that sells athletic clothing may use an image of athletes to promote its products.

Functional differentiation – Functional differentiation occurs when a firm offers different functions for its product. For example, a laptop may have different functions such as word processing, internet browsing, and playing games.

Location-based differentiation – Location-based differentiation is the practice of offering different products or services in different locations. This type of differentiation is often used by retail firms to attract customers to their stores. For example, a grocery store may sell fresh produce in one location and household items in another.

Product line extension – Product line extension is a type of product differentiation in which an organization offers an existing product in a new geographical market, with additional features or accessories to cater to the needs and wants of different types of consumers. For example, a company may offer its existing products at different prices based on differences in the group buying power of the target market segments.

Specialization – Specialization occurs when an organization focuses on selling a specific type of product instead of a wide range of products. For example, an automobile company that offers only sports cars would have a specialization strategy. An advantage of this type of business model involving specialization is that it allows businesses to derive greater benefits from economies of scale and scope by concentrating on producing a limited number of products.

Packaging differentiation – Packaging differentiation is the use of different packaging to attract customers. For example, a company may use colorful packaging to make its product look more appealing.

Branding – Branding is the process of creating a unique name, term, design, symbol, or other feature that identifies a product or service and distinguishes it from those of other producers. A strong brand creates customer loyalty and can be worth billions of dollars. Branding can be used to differentiate products in a number of ways, such as through the exclusive use of certain colors, fonts, or symbols.

Channel differentiation – Channel differentiation is the practice of offering different channels through which customers can purchase products. This could involve offering products through different types of stores, such as a grocery store, department store, or specialty store.

Price differentiation – Price differentiation is the process of setting different prices for the same product in different geographical markets or segments. This type of differentiation can be used to exploit differences in the cost of production, the availability of raw materials, and other factors. For example, a company may sell its product at a lower price in developing countries to take advantage of the lower labor costs.

Product differentiation is a key element of marketing and is used to create value for customers by making products more appealing than those offered by competitors. There are a number of ways that firms can use product differentiation to stand out from their rivals, including:

The products can be differentiated by adding extra functions. For example, a home sewing machine may have functions specifically designed for quilting. Customers are more likely to purchase products with customized features. For example, if customers are looking for a large desk that will fit into their office space, they will be more likely to buy furniture from a company that offers customization options compared with a company that only sells one standard desk model. Companies can differentiate their product in ways other than by adding extra functions or customizing the design of the product. Some strategies used to do this include:

A company often uses several strategies at once to create product differentiation and increase its market share and profitability.

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