Differentiation strategy

A Differentiation Strategy

A firm's approach to creating and marketing its distinctive products for a range of clients is referred to as a differentiation strategy (Lancaster & Schenck, 2014). When a company has a competitive advantage and the financial wherewithal to support pricey advertising efforts, this strategy is typically employed. Along with low cost and focus approach, it is also recognized as one of the three generic marketing techniques that many companies use in the modern business environment. The flexibility of changing the price of a company's services or goods is one benefit of the differentiation approach. Differentiation strategy is essential in many organizations, and it is used by many firms to enable them to increase their earnings profits from the sale of their products through creation of unique products (Lancaster & Schenck, 2014). Undoubtedly, uniqueness in products attracts more customers compared to those that they are used to. In many instances, companies or organization utilize product differentiation strategy as a way of innovating new ideas particularly regarding customer’s preferences and sales.

Solving a Problem with Product Differentiation

In case 3.1, Patterson is interested in solving a problem that arises due to shortcomings of the existing undershirts According to him, the undershirts were too baggy and boxy and were definitely not made to fit everyone. While wearing the undershirts, he normally tucked them in. He god frustrated on a number of occasions whenever he put on the undershirts and decided to look for a solution. After approaching a company that makes the undershirts and not finding a solution, he drew his preferred undershirt and took it to the tailor to do a prototype of the drawing. The tailor did an amazing job and it solved the problem. He no longer go frustrated wearing the new model of undershirts. Evidently, Patterson employed the concept of product differentiation as a way of satisfying specific needs of customers. Despite the fact that most customers purchased the undershirts and only a few complained like him, it is clear that there are a number of customers who are dissatisfied with certain product features but do not complain to the sellers.

The Importance of Sustainable Competitive Advantage

Sustainable competitive advantage refers to the attributes, assets as well as abilities that are not easy to copy or exceed. They offer a favorable or superior long term position over other competitors in the industry (Kapoor & Kulshretha, 2012). Some examples of sustainable competitive advantages include power brands, pricing power, low costs of products, entry barriers, differentiation of products, excellent or outstanding management style, and adapting of product line. It is recommended that all companies consider developing or having at least a single sustainable competitive advantage in order to succeed in various roles in the company.

The Tommy Underpants Case Study

Tommy underpants case study provides a succinct depiction of how sustainable competitive advantage can be used to successfully establish a business from a small idea on customer’s dissatisfaction. Sustainable competitive advantage requires creativity and innovation for it to succeed. It requires constant research to avoid any instances of duplicating other people’s or company’s ideas. What is more, it requires dedication and cautiousness. In the case, Patterson tests if the new undershirts are accepted by the people. He uses about 200 undershirts tailored in his preference and requests for people’s responses. He uses $300 to carry out a research to establish if there is another company or person who manufactures similar undershirts. From this, he succeeds in creating a sustainable competitive advantage over his competitors. His undershirts are preferred by most customers compared to the old versions. This way, he does not face stiff competition from other companies producing similar products but of different models. Uniqueness in products is a way of creating sustainable advantage. It is a way of acquiring dominance in the market for a long time and ensuring that all customers are satisfied. It is a leeway to making huge profits and achieving success in business.

The Concept of Disintermediation

Disintermediation refers to a reduction in the involvement of intermediaries like producers. It means selling products directly to customers without going through the normal distribution channels. Disintermediation is a common practice in businesses that seek to find customer’s responses or feedbacks regarding particular products (Li-Williams et al, 2000). Moreover, it is a means of creating customer loyalty through customer contacts. Disintermediation has an advantage of encouraging customer-producer relationships. It facilitates fast address of customer problems or complaints. In the cases, it is clear that Patterson maximizes the use of disintermediation as a method of addressing issues of problems customers face while using the old version of undershirts. It makes it easier for him to get the complaints or dissatisfactions directly from the customers. He utilizes the concept perfectly to market his brand.

The Importance of a Business Tagline

A business tagline refers to a unique phrase accompanying the brand name translating to brand identity and business positioning that gives consumers a clue or a positive perspective of the brand (In Chandler, 2014). Notably, a tagline markets the position of a business using a few but memorable words.

In the case, Patterson understands that the primary purchasers of underpants are women. However, the logo and the description of the product were mainly masculine. He decided to make a logo that was purely feminine. He also created a box with feminine colors; tiffany blue and chocolate brown mainly to catch the attention of women. This acted as an excellent tagline for the product.

References

In Chandler, R. C. (2014). Business and corporate integrity: Sustaining organizational compliance, ethics, and trust. New York: Collins & Sons.

Kapoor, A., & Kulshretha, C. (2012). Branding and sustainable competitive advantage: Building virtual presence. Hershey, PA: Business Science Reference.

Lancaster, P., & Schenck, B. F. (2014). Small business marketing for dummies. New York: SAGE.

Li-Williams, L., Olsen, D., & Massachusetts Institute of Technology. (2000). Reintermediation or disintermediation?: The impact of e-commerce on commercial real estate brokerage.