Product differentiation is defined to be a process in which it is tried to build the product’s unique and attractive features and easily distinguishable image in the eyes of its target market.

Product differentiation can be the reason for both increasing the profit margins and even causing a decline to them. Therefore it must not be overlooked and should be given due importance because if the differences will not be clear enough then people will not be able to differentiate it with the other competing brands in the market, by this other competitors will get a chance to snatch away the profit margins.

Example of Product Differentiation

Advertising plays an important role in differentiating the product and catching its customers. We can take the examples of brands like surf excel who has positioned itself so differently through its advertisement of umer & dadi it has become very popular, it promoted that stains are good, and its healthy if kids play and get their clothes messed up as surf excel is their to clean them so worry not.

Source of Attracting Potential Buyers

Product differentiation is considered to be a key to open doors for the potential buyers. Its uniqueness and different attractive features can attract the potential buyers in the market.

Role of Product Differentiation In Positioning the Product

Product differentiation no doubt plays a very important role in positioning the product in the mind of the target market.

Product Differentiation as a Competitive Advantage

If the product differentiation is done perfectly than it can provide a competitive advantage over others.

Types of Product Differentiation

Product differentiation can be done on the basis of the 4 p’s of marketing namely


A product can be designed in such a way, enriched with eye catching features that its target market could easily differentiate it from other available products in the market.

A company can use the pricing of its product to its advantage and to position the product differently in the eyes of the customers.


The promotion of the product is very important to make it known to the people about its presence now it is very important to promote the product in such a way that it becomes its competitive advantage. It must be unique and difference that people must notice it, like it and desire to try the product.

Placement of the product on the shelves is also a type of product differentiation.


John Beath, Yannis Katsoulacos (1991), “The Economic Theory Of Product Differentiation”, Cambridge University Press, Pg 204

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