Differentiation strategy

Differentiation strategy involves the development of unique products that differ significantly from those of competitors. The differentiation strategy requires that a company continually invest in enhancing its products, so that it always maintains an edge over its rivals in the features being offered to customers. The investment must include a top-tier team of product designers and marketing personnel. In addition, the products being delivered must be of the highest quality.  This strategy requires a heavy investment in branding, so that the targeted customers will recognize the products that the company has developed for them. When there is a strong differentiation strategy in place, customers are willing to pay a price premium for the company’s products. If the firm steps back from any of these efforts, then the perceived level of differentiation will decline over time.