Building a strategy on a differentiation requires a company to continuously invest in and develop: Superior product quality (features, benefits, durability, reliability)Branding (strong brand recogni

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Building a strategy on a differentiation requires a company to continuously invest in and develop:

  • Superior product quality (features, benefits, durability, reliability)
  • Branding (strong brand recognition, desire and loyalty)
  • Industry-wide distribution across all major channels (i.e. the product or brand is an essential item to be stocked by retailers)
  • Marketing capabilities (advertising, sponsorship etc.)

Differentiation strategy could be further divided into:

  • Purification (decrease in price; decrease in perceived value) – examples: EasyJet, Tata, Logan etc.
  • Hybrid (decrease in price; increase in perceived value) – examples: IKEA (SCM optimisation), Loreal (new brands as a response to crisis) etc.
  • Sophistication (increase in price; increase in perceived value) – examples: Mercedes (status), VW (reliability); Toyota (TQM)

Despite the fact that these brands pointed out above achieve significant economies of scale, they do not rely on a cost leadership strategy to compete. Differentiation often makes consumers believe that the higher prices ‘make up’ for the quality and/or higher costs. Strong marketing capabilities enable them to sell products for a premium and at the same time persuade customers to become brand loyal. For this assignment, find an example (DO NOT USE ANY OF THE EXAMPLES LISTED ABOVE – Tata/IKEA/etc.) of a direct-to-consumer advertisement which promotes a brands differentiation strategy.

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  1. Purification – link of advertisement and explain WHY
  2. Hybrid – link of advertisement and explain WHY
  3. Sophistication – link of advertisement and explain WHY
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