Types of differentiation strategy

(1) product differentiation strategy

The main factors of product differentiation are: characteristics, working performance, consistency, durability, reliability, maintainability, style and design.

(2) service differentiation The differentiation of strategic services mainly includes delivery, installation, customer training, consulting services and other factors.

(3) personnel differentiation strategy

Well-trained employees should be able to embody the following six characteristics: competence, courtesy, credibility, reliability, quick response and good communication.

(4) Image differentiation strategy

Characteristics of differentiation strategy [2]

Strong basic research ability (product innovation);

Organic organizational structure and strong coordination among departments;

Creative thinking ability and insight beyond mindset;

Strong market operation ability (market research ability and promotion ability make the market realize that the products are different)

Incentive system based on innovation;

The company's reputation in product quality and technological leadership.

Applicable conditions and organizational requirements of differentiation strategy

(1) There are many ways to create the difference between the products of enterprises and competitors, and this difference is considered valuable by customers;

(2) Customers' demands for products and requirements for use are varied, that is, customers' demands are different;

(3) There are few competitors who adopt similar differentiation approaches, which can truly guarantee the "differentiation" of enterprises;

(4) With the rapid development of technology, the market competition mainly focuses on the continuous introduction of new product functions.

In addition to the above external conditions, enterprises must also meet the following internal conditions to implement the differentiation strategy:

(1) Strong research and development ability, and researchers should have creative vision;

(2) The enterprise has a reputation of leading in product quality or technology;

(3) the enterprise has a long history in this industry or absorbs the skills of other enterprises to become a whole;

(4) Strong marketing ability;

(5) There should be strong coordination between R&D, product development, marketing and other functional departments;

(6) Enterprises should have material facilities that can attract senior researchers, creative talents and highly skilled employees;

(7) Strong cooperation among various sales channels.

Benefits and risks of differentiation strategy

The significance of implementing differentiation strategy lies in:

(1) Establish customer loyalty to the enterprise;

(2) forming strong barriers to industrial entry;

(3) Enhance the bargaining power of enterprises to suppliers. This is mainly because the differentiation strategy improves the marginal income of enterprises;

(4) weaken the bargaining power of buyers. Through the differentiation strategy, the enterprise makes the buyer lack of comparable product selection and reduces the buyer's sensitivity to price. On the other hand, through product differentiation, buyers have higher switching costs and rely on enterprises;

(5) Because the differentiation strategy enables enterprises to establish customer loyalty, substitutes cannot compete with them in performance.

The differentiation strategy also includes a series of risks:

1. Some customers may be lost. If the competitor who adopts the cost-leading strategy reduces the product price, then the product price gap between it and the manufacturer who implements the differentiation strategy is very large. In this case, in order to save a lot of money, users give up the product characteristics, services or images owned by the manufacturers who make the price difference, and choose products with good quality and low price instead;

2. The product difference factors of user demand are reduced. When users become more and more sophisticated and have no obvious understanding of the characteristics and differences of products, differences may be ignored;

3. A lot of imitation narrows the perception difference. Especially when the products develop to maturity, it is easy for manufacturers with technical strength to reduce the differences between products through realistic imitation;

4. Excessive differentiation.

Advantages of differentiation strategy [3]

Differentiation strategy is an effective means to enhance the competitive advantage of enterprises. Product differentiation has different effects on market price, market competition, market concentration, market entry barriers and market performance. Differentiated products or services can meet the special needs of some consumer groups, which cannot be provided by other competitors and can compete with competitors; The differentiation of products or services will also reduce the price sensitivity of customers, and it is unlikely to switch to other products and services, thus enabling enterprises to avoid price competition. Specifically, it can be seen from the following aspects:

1. Differentiation itself can bring higher premium to enterprise products. This premium should be able to make up for the increased cost due to differentiation and bring higher profits to enterprises. The greater the degree of product differentiation, the more difficult it is to substitute and imitate its characteristics or functions. The more customers are willing to pay higher fees for this differentiation, the greater the differentiation advantage the enterprise will gain.

2. Differentiated products and services can't be provided by competitors at the same price, which obviously weakens the bargaining power of customers.

3. Enterprises adopting differentiation strategy will be in a more favorable position than competitors when dealing with the competition of substitutes. Because customers who buy differentiated products are unwilling to accept substitutes.

4. Product differentiation will form certain barriers. The more obvious the product differentiation, the higher the barriers to entry.

Unscramble differentiation strategy

First, competition is "difference"

Many managers think that competition is to achieve the best, so they always try to win the competition by finding the best way. In fact, there is not only one best way in any industry because many customers have different needs. There are many good ways to compete, and there are many ways to provide value. There is a more useful idea about competition: how to be different and provide unique value in this way. This kind of competition provides more choices for customers and more innovations for the market.

Second, "one of the best" is not a strategy.

A wrong understanding will lead to a wrong decision. There are five common misunderstandings about war:

1, think strategy is an ambition. For example, "My strategy is to become the first or second in the industry" or "My strategy is development". In fact, this is not a strategy, just a hope. Strategy is not a goal, but a method, that is, "how" to become the first or second. The key is how to realize your competitive advantage and how to be unique.

2. Think that strategy is just some actions. For example, "our strategy is merger", "internationalization" and "outsourcing" ... these actions should be appropriate, but they are steps rather than strategies. Strategy is how to position yourself, make yourself unique and have advantages, which is the key, and then decide what steps to take. If strategies are defined as actions, then these actions may be isolated and unrelated, and they do not serve the unified goal.

What matters is strategy. Such as "marketing strategy", "government strategy" and "technology strategy". In fact, the core of strategy is integration. An enterprise has only one strategy, but not many strategies. All the businesses and things an enterprise wants to do should be integrated into an overall strategy, instead of squeezing many strategies together. And this strategy must be completed at one time, otherwise all parts of the strategy will have different directions.

4. Think that strategy is vision. For example, "our strategy is to make important products for society" or "to provide services for mankind". The strategy should be what your competitive advantage is and how to position yourself in the industry in order to gain competitive advantage and sustainable development.

5. Think of strategy as experiment. "Because the world is developing rapidly, we should not make a strategy from the beginning. We should try many times to see which ones are successful. " I think this is a very dangerous idea. Generally speaking, small businesses don't do many experiments, and then suddenly one day a miracle appeared and they succeeded. Success must be predictable, and you must build a competitive advantage, which requires you to think clearly from the beginning and see where the opportunities are.

Third, the strategy is not only "ahead"

Excellent performance in competitive advantage can be manifested in two completely different ways, the first is operational efficiency, and the second is strategic positioning. They are different, but many managers actually confuse them.

Operational efficiency is to take out those advanced methods and implement them. For an emerging economy like China, integrating and learning from the advanced practices of international competitors is a very important aspect of management, which requires a lot of time and energy. Improving the operational efficiency of an enterprise is the premise for you to compete with your competitors, which is neither the goal nor the strategy of the enterprise. We must first achieve a certain level of operational efficiency in order to survive; Then do things better through strategy.

Four, the five characteristics of an effective strategy

1. has a unique value appeal. What you do is very different from other competitors. There are three important aspects of value appeal: what kind of customers do you want to serve? What are the needs of these customers? What kind of corresponding price will you seek? These three points constitute your value appeal. Your choice should be different from that of your opponent. If you want to compete with multinational companies to do the same thing, you are unlikely to succeed, so you must make a strategy and adopt a unique perspective to meet unique needs.

2. Have different value chains carefully designed for customers. Marketing, manufacturing and logistics must be different from competitors, so as to have characteristics, otherwise they can only compete in operational efficiency.

3. Make a clear choice and decide what not to do. When making a strategy, you should consider the trade-offs, which will make it difficult for your competitors to imitate your strategy. Trade-offs are very important, because you can't have both, you can only do something and not do something. A common mistake made by enterprises is that they want to do too many things and are unwilling to give up. If you have a choice, your opponent will hurt himself if he learns you, which forces him to make a choice: either give up his core advantage completely, or give up plagiarism, or at least not copy you effectively.

4. Activities in the value chain must match and promote each other. Why are the low-cost model of Southwest Airlines, the direct selling model of Dell and the mass customization model difficult to imitate? Because their advantage is not an activity, but the whole value chain works together. Competitors should imitate you, not just one thing, but the whole strategy of the past to be effective.

5. The strategy should be continuous. Any strategy must be implemented for three to four years, otherwise it is not a strategy. If you change your strategy every year, it means there is no strategy, but it is very fashionable. This doesn't mean that you will never change. First of all, you should constantly look for advanced practices. Second, you should always look for better ways to implement your strategy. If there is a new technology, how can my company use this technology to make my strategy more effective? If you have a clear strategy, you will actually change faster, because with a strategy, you will set priorities and determine what is important. If you don't have a strategy, you will think everything is important, so you won't know which to do first and which to do later.

Case analysis of differentiation strategy

Case 1: Analysis of the application of differentiation strategy in real estate industry [4]

If an enterprise wants to develop the market, it must find a marketing strategy to beat the competitors of its products or services. Therefore, the differentiation strategy has been paid more and more attention by entrepreneurs. Differentiation strategy is the ultimate way for enterprises to gain competitiveness. Effective differentiation can enable enterprises to enjoy the rich benefits brought by high prices.

First, the application status of differentiation strategy in the real estate industry

After China's entry into WTO, the competition in the real estate market will further intensify. However, with the introduction of a series of policies by China government, such as canceling welfare housing allocation, purchasing houses with provident fund loans and mortgage loans, it has brought new development opportunities to China real estate market. At this time, real estate development enterprises can meet the market demand by adopting differentiation strategy, and only in this way can they develop and strengthen themselves in the fierce market competition. It can be said that it is imperative for the real estate industry to implement the differentiation strategy.

Second, the application analysis of differentiation strategy in the real estate industry

1. Product differentiation

For tangible real estate products, product differentiation is the most basic and the first thing to master. Compared with other products, real estate products themselves are very different.

(1) product quality

Quality is the foundation of any product, and real estate products are no exception. The first is the design quality; Secondly, the quality of the project. The quality of the project requires not only safety, but also waterproofing, flatness of the wall and sealing of doors and windows. People often say 100- 1=0, which means that even a small matter may invalidate all efforts. Finally, environmental quality and supporting quality.

(2) Product performance

For example, in the same location, your property has a better ecological environment than other properties; On the basis of the same occupancy rate, your room type has more or more convenient functional combinations than other properties, and so on. As long as the price does not exceed the customer's cognitive value, they are willing to pay a higher price to buy real estate products with good performance.

(3) Product features

Product function refers to the increase and supplement of the basic functions of real estate products.

For example, in the case that the greening of residential quarters is generally ignored, it should be a feature to attach importance to greening and improve the ecological function of residential quarters. For another example, increase intelligent facilities, central heating and drinking water supply in residential areas, build split-level houses, large-scale lighting protruding windowsills, sun rooms, movable transparent roof patios, indoor automatic alarm and so on. Can constitute the characteristics of real estate.

(4) Product design style

From the developer's point of view, what is required is convenient construction and smooth market introduction. From the customer's point of view, it requires good performance, good quality, beautiful and distinctive. Design work must be balanced and strive for perfection. The final choice of design depends on the customer's understanding of product differentiation and the value comparison of the target market.

2. Service differentiation

Different from other commodities, the consumer groups of commercial housing have both sexual needs and individual needs. When competitors are evenly matched in terms of customers' sexual needs, the factor that affects customers' purchase intention is often which project can better meet his individual needs and win his favor. These personalized needs are often not met by the product itself, but by the services attached to the product, which is what we usually call "services can increase the added value of products."

3. Brand differentiation

Most consumers in China have entered the stage of "brand consumption". Many development companies only pay attention to short-term behavior in the process of real estate development and sales, but do not pay attention to brand reputation. Consumers can only choose through oral information when buying a house. In a sense, due to the particularity of real estate consumption, consumers are cautious when choosing a house, so it is very necessary to establish a brand of real estate.

4. Differentiation of marketing channels-direct sales by owners

In marketing, people think that in a person's life circle, he can contact and lead to similar purchases as many as 250 people. Therefore, in real estate sales, if an owner who has bought a house sells the house to his friends and colleagues through self-introduction, it can produce better results than the sales staff.

Third, the housing industry should implement the differentiation strategy.

1. Effective difference countermeasures

Effective differentiation refers to the differentiation that can effectively form enterprise market power and improve market performance. Effective differentiation countermeasures include the following aspects:.

(1) Reality

A certain degree of differentiation can indeed make a considerable number of customers get more practical benefits. If the real differences of real estate products can make consumers get real benefits, such differences can attract consumers' attention, because only by bringing real and affordable product differences to consumers can they be recognized by consumers and be invincible in the market competition. Of course, the real product difference does not exclude the good buying experience that products bring to consumers in terms of brand and goodwill. Brand and goodwill can not only bring superior guarantee of quality and function, but also bring consumers a sense of honor and accomplishment of social status and class. This kind of psychological feeling is also a real benefit feature.

(2) uniqueness

Some kind of differentiation is not available to other development enterprises, or it is provided to customers by this enterprise very prominently and clearly. Effective differentiation should have obvious characteristics different from competitors, that is, uniqueness, which can highlight the advantages of differentiation and attract attention. To solve the problem of uniqueness, we should consider two aspects: one is conceptual innovation, the general method is to dig from the performance characteristics and pleasure characteristics of products, and the other is tonality treatment. The general method is to make rational things emotional and boring things interesting and contemporary.

(3) Not easy to imitate

A certain differentiation is not easy for other developers to imitate. In the fierce market competition environment, the most basic requirement of effective differentiation strategy is that opponents are difficult to imitate. However, in today's China real estate market, the phenomenon of following the trend is quite serious, and the imitation of competitors narrows the differentiation, so that enterprises invest a lot in differentiation, but the effect is not good.

The narrowing of differentiation is mainly reflected in planning and design, building materials selection, construction technology and so on. Therefore, development enterprises can set up imitation obstacles, such as experience, strong connection with the outside world, internal coordination and the advantages of pioneers, which are not easy for imitators to break.

2. Precise positioning countermeasures

Accurate differentiation positioning can design the most attractive differentiation for your own real estate target market.

(1) content positioning

The development enterprise and the developed real estate have different advantages, so we should compare with the advantages of competitors, strengthen and highlight our own advantages. For example, a developer's property and another developer's similar property compete in terms of environment and apartment type. However, this enterprise is more famous and has advantages in personnel quality and service, so it is necessary to emphasize the introduction of brand and service advantages as the difference.

(2) Communication positioning

Developers should not only determine a clear differentiated positioning, but also carry out fruitful publicity on this positioning. For example, the developer decided to take "the best reputation" as the positioning theme, and it must ensure that the publicity of this theme goes deep into the hearts of customers. A better way is to publicize your own property sales performance, the most timely delivery date, the least sales disputes and the highest awards. In addition, "the best word of mouth" can also be reflected by other marketing combinations such as price, advertising, promotion means and distribution channels.

3. Risk avoidance countermeasures

There are certain risks in implementing differentiation strategy in real estate industry. Here is a brief introduction to how to avoid these risks.

(1) The cost of implementing differentiation is too high.

When developing real estate, development enterprises should conduct certain market research, reasonably calculate and evaluate the differentiated input-output ratio, and implement this strategy after comprehensive consideration without affecting consumers' purchase.

(2) Changes in customer demand

Consumer psychology is becoming more and more mature, which may reduce the demand for differentiation. In this case, development enterprises should conduct a comprehensive market survey, fully understand the needs of consumers, implement differentiation strategies according to the real needs of consumers, and compete effectively with the real differences of competitors.

(3) When adopting differentiation strategy, there may be a situation that hinders the improvement of its market share, that is, the market share is lower than that of enterprises adopting low-cost strategy. At this time, it is necessary to consider the products and profits of enterprises together, not only depending on market share, but also on profits. Through comprehensive consideration, find out the advantages and disadvantages of adopting this tactic, so as to make a choice whether to change the tactics.

Case 2: Analysis of differentiation strategy of household appliance industry [5]

First, the differentiation strategy is an inevitable choice for the home appliance industry.

Only when there are differences can there be a market, so that we can be invincible in the competition of the same industry with strong hands. If any competitive enterprise wants to survive for a long time, it must form a unique advantage over all other competitors through differentiated competitive strategy, and maintaining this differentiation is the essence of its long-term strategy. The demand of the customer market varies widely, and the differentiation of supply in the personalized era has become the permanent goal for enterprises to form unique competitiveness.

1, the price war has overwhelmed the home appliance industry.

In recent years, the method of attracting consumers by competing prices for household appliances has caused many manufacturers to make ends meet and become heavily in debt. Simply excavating comparative advantages from cost leadership and making a fuss about price competition have caused the home appliance industry to fall into a state of homogenization, vicious price competition and meager profit, and the cost leadership strategy is being severely tested.

Long-term low-level price competition and disorderly over-expansion have made China's home appliance enterprises suffer the pain of oversupply prematurely, especially the domestic air-conditioning enterprises that are good at "price war". Under the pressure of skyrocketing compressor prices, the low-price strategy is being severely tested. More and more enterprises realize that price competition alone cannot establish core competitiveness, which is not the direction of long-term development, and strive to explore new development paths. New concepts such as "digitalization, frequency conversion technology and fuzziness" have been rapidly applied to household appliances. Refrigerator from single door to multi-door, from double door to large freezing, multi-temperature layer fluorine-free, fresh-keeping stage; Television is also experiencing technological progress from fuzzy television to digital television, and then to all-digital television. Many household electrical appliance enterprises increase technical input, actively develop high-tech products, take product differentiation as a long-term solution for enterprise development, and seek new market demand to realize the sustainable development of enterprises.

2. The heterogeneity of customers objectively requires the home appliance industry to implement differentiation strategy.

The heterogeneity of customers is the basis of differentiation. For enterprises, the only competitive means is to provide products to customers at the lowest possible price. But in fact, customers are not homogeneous, and there are differences in many aspects, such as the differences between urban and rural areas, the level of education, the amount of economic income, different psychological factors, values, consumption concepts, and the heterogeneity of buying behavior. It is precisely because of these differences that customers have different needs. Take the TV set as an example. Maybe some customers like TV sets with simple operation and low price, while some customers like TV sets with complex operation, expensive price and clear picture quality. When customers have different preferences, enterprises should produce products with different functions according to the consumption needs of different customer groups in order to win the market.

Second, the implementation of differentiation strategy in home appliance industry.

1, the meaning of differentiation strategy

Differentiated competition strategy refers to the development and production of innovative products that are superior to the existing products in the market in performance, function and quality by virtue of their own technological advantages and management advantages, and make innovative products meet the different needs of consumers. In addition, the extension of the concept of differentiated competition should also include the support of peripheral work such as product packaging differentiation, marketing differentiation, advertising differentiation and after-sales service differentiation, so as to form a complete differentiated competition system. On the basis of improving the market reputation and good image of enterprises, all aspects of enterprises can form a complementary virtuous circle system around differentiated competition.

2. Seek differentiation

The highest goal of differentiation strategy is to "stand out", that is, the products provided by this enterprise to customers are "irreplaceable" in terms of function, quality, service and marketing. The overall product concept of modern marketing theory shows that customers' value orientation of products or services has three levels: first, core value, which is mainly composed of the basic functions of products, that is, the basic reasons for the existence of products, such as mobile phones are used for communication and hamburgers are used to satisfy hunger; Second, tangible value, including product quality and performance, brand, packaging and appearance style related to service, which are also important components of actual products; Third, added value includes value-added services indirectly related to products-services beyond customers' expectations, such as lifetime warranty, free delivery, installment payment, installation and debugging. This "three-level" or "trinity" product concept has laid a theoretical foundation for our differentiated competitive strategy. On this basis, we can seek differentiation from three aspects: product, market and image.

First, product differentiation. In the same industry, the core value of products is basically the same, and the difference is mainly tangible value and added value.

In the case of meeting the basic needs of customers, whoever has many practical functions will stand out and win customers. If the product itself is obviously superior to competitors' similar products in terms of quality, performance and function, it can take the lead in the market. Different product differentiation strategies make different enterprises have distinct characteristics and gain different customer groups.

Second, image differentiation. By strengthening brand awareness and successfully implementing CI strategy, enterprises have formed a unique corporate image in consumers' minds, and consumers are willing to give priority to their products. For example, people who go to Qingdao will see thousands of balloons with Haier brand logo hanging over the airport along the way. Haier Group has created a sincere and credible image with high-quality products and the promise of "sincerity forever". If product differentiation is to serve customers with internal quality, then image differentiation is to occupy the best position in consumers' minds with integrity and unique external image.

Third, market differentiation. Market differentiation refers to the differences in product sales price, distribution channels and after-sales service under specific market environment conditions. In terms of sales price, the prices of similar products can be divided into high, medium and low. Enterprises can choose advanced gift packaging for high-priced sales according to market positioning, their own strength and product life cycle, so that consumers have the feeling of value for money. Or choose simple packaging to sell at a low price, so that consumers feel economical. In terms of distribution channels, there are long channels and short channels, wide channels and narrow channels according to different management levels or links.

The choice of channels is influenced by product characteristics, market factors, enterprises' own factors and national policies and decrees. Therefore, in similar products, enterprises can adopt appropriate sales channels according to relevant influencing factors and their own characteristics and advantages.