ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Business and Employment»
  • Business Management & Leadership

Broad Differentiation: Maintaining the Consumer's Market

Updated on March 25, 2016

Large companies usually adopt this kind of strategy-Broad differentiation when the competition gets tough. Broad differentiation is a kind of differentiation that range from products to services. According to Michael Porter, in order to avoid being “stuck in the middle” company should select one strategy out of three generic strategies (Cost Leadership, Differentiation and Focus) which he had mentioned in his book, Competitive Strategy.

Why a company needs to differentiate?

Differentiation is a unique quality, perceived or real, of a good or service that distinguish it from a competing good or service..." -Your Dictionary.com-

The need to be distinctive and competitive are the reasons why the company needs to differentiate their products or services. Broad Differentiation Strategy is common in big firms that want to maintain and cover the whole market in the business world. The catch in differentiating a product and or services are:

  • a.) the company could set premium price of the product/services; and
  • b.) increase sales and gain loyalty from the consumers or customers because what they offer is unique thus, gave value to their money.

ADVANTAGES:

  • The differentiation would act as a barrier to the business entrants;
  • The company could set a higher price to suppliers; and
  • Reducing the bargaining power of the buyer because differentiated products can’t be easily copied.

When you differentiate products/services in a broad differentiation strategy, It doesn't mean you should focus on one brand for the entire market segment but also thinking and producing differentiated products that would fit to each market segment.

DRAWBACKS OF BROAD DIFFERENTIATION

Below are the disadvantages or risks of the broad differentiation strategy:

  • Differentiating on an unimportant product feature that doesn't result in providing the best value to the customer;
  • Too much differentiating the product like products' features exceed the customers’ needs;
  • Charging a price premium that buyers perceive as too high;
  • Ignoring a need to signal value; and
  • Not identifying what customers consider valuable.

Whatever the economic conditions that the market would experience the company with differentiated products could still survive and flourish. We have to remember that bad economic condition to some company is an opportunity for growth. Therefore, the company’s long existence is dependent on the strategy they implemented, which are proven and tested.

Comments

    0 of 8192 characters used
    Post Comment

    • profile image

      Jess 21 months ago

      Double thumbs up for this article !

    • CompassAdvisor profile image

      CompassAdvisor 5 years ago from Charlotte, NC

      Nice article

    • dwarfstar profile image
      Author

      dwarfstar 6 years ago from California

      Thanks mike for the comment

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: "https://hubpages.com/privacy-policy#gdpr"

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)