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A Summary of

Product Differentiation: What Every Product Manager Needs to Know

by
Christina Gkofa
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Product Differentiation: introducing novel features to a product to establish unique selling proposition (USP)

  • Essential for product’s survival and competitive advantages
  • Aid smaller businesses to challenge monopolistic incumbents
  • Horizontal: differentiation in color, style, shape, flavor (not price)
  • Vertical: differentiation hierarchy based on quality
  • Mixed/Simple: mix of vertical and horizontal with visible differentiation
  • Leverage USPs by focusing on quality, functionalities, personalization, marketing

Pros

  • Price is not the only focus: product quality and design trump
  • Heightened brand loyalty
  • Reinforce unique points

Cons

  • Added pressure on manufacturers
  • Price increase for end users
  • Revenue is not guaranteed
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