CREATING A DIFFERENTIATION STRATEGY

PRODUCT FEATURES

A product or service's customer-oriented strengths; statements of a valuable product

or service feature, with an emphasis on what the customer gets from the products
Many small-business marketers assume that prospects will understand why they should buy
their product or service just because they've been told about it. Thus, business owners only
communicate the features of their product or service to prospective customers and neglect to
mention the benefits.
Take a look at the list of features below, taken directly from current advertising and
marketing materials:

 Self-setting clock on a DVD player

 50-number speed dial

 Open 24 hours

Each is a feature--a factual statement about the product or service being promoted. But
features aren't what entice customers to buy. That's where benefits come in. A benefit
answers the question "What's in it for me?" meaning the feature provides the customer with
something of value to them. So--and this is where most businesses go wrong--that must
mean:

 The benefit of a self-setting clock is convenience.

 The benefit of 50-number speed dial is fewer keystrokes.

 The benefit of a store open 24 hours is you can shop there whenever you want.

While these may seem like true benefits, they're really just elaborations on the features.
So what is truly a benefit?The best way to understand the true benefit of your product or
service--or to answer the "What's in it for me?" question--is to focus instead on results. A
customer's perception of each feature's results is what attracts him or her to a particular
product or service. When someone chooses a VCR with a self-setting clock, the assumption
is that the benefit is convenience, but the actual results are that they don't have to read the
instructions, watch a blinking 12:00, and, most important, feel stupid. Those results are the
true benefits.When you try to sell the features of your product or service, you're making the
customer do all the work to figure out why they want the feature. It's in a seller's best interest
to draw the connection for them. But to do that, you have to know the results yourself. Let's
take another look at that features list to see the possible benefits from the customer's point of
view:

 Self-setting clock: I won't feel dumb!

 50-number speed dial: I can keep in touch with my best customers without effort, and
I won't get frustrated misdialing.

 Open 24 hours: When my pregnant wife craves pickles and ice cream at 4 a.m., I
won't have to disappoint her.

By this time, you should be mentally going over every sales pitch or marketing message
you've been using with great trepidation and rightly so. If you look carefully and honestly,
you'll most likely find that your benefits are really just more features.

BRAND IMAGE

Impression in the consumers' mind of a brand's total personality (real and imaginary
qualities and shortcomings). Brand image is developed over time through advertising
campaigns with a consistent theme, and is authenticated through the consumers' direct
experience. See also corporate image.

A brand is the identity of a specific product, service, or business. A brand can take
many forms, including a name, sign, symbol, color combination or slogan. The word brand
began simply as a way to tell one person's cattle from another by means of a hot iron stamp.
A legally protected brand name is called a trademark. The word brand has continued to
evolve to encompass identity - it affects the personality of a product, company or service.

A concept brand is a brand that is associated with an abstract concept, like breast
cancer awareness or environmentalism, rather than a specific product, service, or business. A
commodity brand is a brand associated with a commodity. Got milk? is an example of a
commodity brand.

In the automotive industry, brands were originally called marques, and marque is still
often used as a synonym for brand in reference to motor vehicles.
 SERVICE AND DELIVERY

A service is the intangible equivalent of an economic good. Service provision is often

an economic activity where the buyer does not generally, except by exclusive contract,
obtain exclusive ownership of the thing purchased. The benefits of such a service, if priced,
are held to be self-evident in the buyers willingness to pay for it. Public services are those
society pays for as a whole through taxes and other means.Delivery of work by a person or
group for the benefit of someone else. Assistance offered by a business to its customers. For
example, an appliance dealer is known to offer excellent service to its customers.
The service encounter is defined as all activities involved in the service delivery
process. Some service managers use the term "moment of truth" to indicate that defining
point in a specific service encounter where interactions are most intense.
Many business theorists view service provision as a performance or act (sometimes
humorously referred to as dramalurgy, perhaps in reference to dramaturgy). The location of
the service delivery is referred to as the stage and the objects that facilitate the service
process are called props. A script is a sequence of behaviors followed by all those involved,
including the client(s). Some service dramas are tightly scripted, others are more ad lib. Role
congruence occurs when each actor follows a script that harmonizes with the roles played by
the other actors.
In some service industries, especially health care, dispute resolution, and social
services, a popular concept is the idea of the caseload, which refers to the total number of
patients, clients, litigants, or claimants that a given employee is presently responsible for. On
a daily basis, in all those fields, employees must balance the needs of any individual case
against the needs of all other current cases as well as their own personal needs.

LOGISTIC EDGE

Logistic means the overall  management of the way resources are moved to the areas
where they are required. This term originated in a military context, referring to how
personnel acquire, transport and store supplies and equipment. In the business community,
the term is used to refer to how resources are acquired, transported and stored along the
supply chain. By having an efficient supply chain and proper logistical procedures, a
company can cut costs and increase efficiency.
Logistics is the one important function in business today. No marketing,
manufacturing or project execution can succeed without logistics support. For companies, 10
per cent to 35 per cent of gross sales are logistics cost, depending on business, geography
and weight/value ratio. 
Logistics is comparatively a new term, but not the operation. Logistics has existed since the
beginning of civilisation. Raw material and finished products had always to be moved,
though on a small scale. Things began changing with the advance in transportation.
Population began moving from rural to urban areas and to business centres. No longer did
people live near production centres, nor did production take place near
residence centres. The geographical distance between the production
point and consumption point increased. And logistics gained
importance. Another factor has come into play recently. Since the early 1990's, the business
scene has changed. The globalization, the free market and the competition has required that
the customer gets the right material, at the right time, at the right point and in the right
condition… at the lowest cost. 

PRICE ADVANTAGE

In order gain a true price advantage over its competitors, a company must have more
than low prices. It must have a structural or fundamental cost advantage to justify such
prices. Examples of a structural cost advantage might be favorable long-term purchase price
contracts on raw materials, low overhead or lower shipping costs due to geographic
proximity to markets. Low price alone (without correspondingly low production, purchasing
or promotion costs) is a recipe for business disaster.

Barring unique circumstances, most firms operating in the same industry in a given location
will tend to have pretty much the same cost structure. When one competitor cuts price as a
tactic aimed at increasing market share and volume, others usually follow. This will act to
erase whatever advantage the first competitor gained by reducing prices, leaving customers
as the only winners.
 Submitted by:
Michelle Ann N. Bravo
Aschel R. Prado

BSBA-FMGT-4D

Submitted to:
Professor Sionida A. Baes