Marketing differentiation is the difference between you and your competition. Differentiation is commonly looked at as what sets you apart in the marketplace. While the idea of what sets your product or service apart in the marketplace is the lion’s share of what marketing differentiation is, it’s not what makes the concept whole. The appeal of your product/service to your market segment is what makes the concept of marketing differentiation complete. It doesn’t matter how your product differs from your competition if your market segment doesn’t know or if those differences have no perceived value to your target market.
There are multiple components to marketing differentiation so to better explain the general idea let’s look at the service component and apply it to the two largest pizza companies in the world, Pizza Hut and Domino’s Pizza. Similar to Coca-Cola and Pepsi these two companies offer two products that are virtually the same. The differentiation occurs in the appeal of the service component. One specific example is offered by Domino’s Pizza. They offer a pizza delivery service specifically for TiVo customers. TiVo customers can buy a Domino’s pizza and track their order and delivery progress on their units as a courtesy provided by Domino’s. Needless to say this has increased brand loyalty and repeat business by the users of this service. In this example the number two pizza giant used a creative service differentiation strategy to increase its market share and encourage brand loyalty. Applied correctly, marketing differentiation is an extremely important part of any marketing strategy.
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