Question

Now consider are strongly differentiated product. Should a firm pursue cost leadership or benefit leadership? Please provide an example of a product that stands exemplary for leadership answer.

Answer 1

Product differentiation: Product differentiation is a marketing strategy that attempts to differentiate a company's products or services from the competition. Successful product differentiation identifies the unique qualities a company has to offer and differentiates between them about other market values ​​and securities Involve exposing. Product differentiation goes hand in hand with the development of a strong value proposition to make a product or service attractive to a target market or audience.

Some factors are product differentiation :

1.Quality 2. Design 3. Service and interaction 4. Features and work 5. Customization 6. Pricing

Examples of differentiated products might include the fastest high-speed internet service or the most gas-efficient electric vehicle on the market today.

Both strategies are beneficial for the firm in its way. Like,

Cost leadership: The relationship between cost leadership and differentiation policy and these both operate across a wide range of industry segments. Cost leadership is about organizing all your resources around the production of goods and services at the least cost. With the lowest cost of providing your products, you can get your business the lowest price in the market for those products Put your customers in the unique position of being able to charge. Just to keep things straight, I'm not talking about cost leadership, not necessarily leadership although the two usually go together.

The best example of cost leadership I can think of today is Amazon.

If your goal is to be a cost leader, it’s good to keep the following things in mind:

1. Do what you and your employees' skills help your organization do.

2. Understand that some markets (commodities) will force you to be a cost leader.

3. Proceed at a lower cost when you cannot move at a lower cost.

Benefit leadership: At the other end of the spectrum is profitable leadership. This strategy specifically focuses on mobilizing all your resources around the goal of providing superior benefits, different benefits, or both. Providing maximum benefits in the market relative to competitiveness By doing so, you are in a position to justify paying more value to your customers. There are many examples of profit-oriented companies, of which Apple is the most prominent.

  If your plan to create a new business or a new product as a benefits leader, it’s best to keep the following in mind:

1. Profit leadership means signing up for continued innovation.

2. Providing only better benefits can be very difficult to maintain.

3. Providing various benefits requires more creativity but can be easier to maintain over the long term.

Example of leadership :

Companies introducing a new product often cite its lower costs to buy or use. If Company A produces a coffee maker virtually identical to that of Company B, Company C may offer a version at a lower cost. If it comes with a reusable filter, the savings on paper filters are highlighted in packaging and advertising it.

For example, product differentiation is demonstrated in many coffee maker brands in today's market. Bartan coffee makers have a thick, substantial feel, and a premium price match. The ease of use of Keurig coffee pods Differentiates itself with. Amazon Basics, as always, sets an unexpectedly low price point.