Dictionary of Business Terms: differentiation strategy
differentiation strategy
- marketing technique used by a manufacturer to establish strong identity in a specific market; also called segmentation strategy. Using this strategy, a manufacturer will introduce different varieties of the same basic product under the same name into a particular product category and thus cover the range of products available in that category.
- positioning a brand in such a way as to differentiate it from the competition and establish an image that is unique; for example, the Wells Fargo Bank positions itself as the bank that opened up the West.
Dictionary of Marketing Terms: differentiation strategy
differentiation strategy
- marketing technique used by a manufacturer to establish strong identity in a specific market; also called segmentation strategy. Using this strategy, a manufacturer will introduce different varieties of the same basic product under the same name into a particular product category and thus cover the range of products available in that category. For example, a soda company that offers a regular soda, a diet soda, a decaffeinated soda, and a diet-decaffeinated soda all under the same brand name is using a differentiation strategy. Each type of soda is directed at a different segment of the soda market, and the full line of products available will help to establish the company's name in the soda category. This technique is quite costly to the advertiser because each individual product must be marketed independently, since separate marketing strategies are necessary for each market segment.
- positioning a brand in such a way as to differentiate it from the competition and establish an image that is unique; for example, the Wells Fargo Bank positions itself as the bank that opened up the West. Also called product differentiation.
