Competitive advantage through differentiation

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Competitive Advantage through Differentiation
Differentiation is a strategy used by businesses to distinguish their products from similar products offered by competitors. Product differentiation is carried out in a way that is valued by consumers and is intended to alter customers’ choices. This is done by offering unique products in terms of the overall quality, price or additional features. This strategy helps in building customer loyalty for a particular brand (Armstrong et al. 213). It is often used by small businesses to compete effectively in markets dominated by large businesses. The differentiation strategy is based on identifying a relevance difference to the customers based on their needs and preferences. By creating a product that is different from similar offerings in the market, a business gives customers a reason to choose products from that particular brand and not from other available brands. This provides the business with a competitive advantage in that particular market. Product differentiation increases sales and helps a business to earn above average revenues as the business can charge higher prices for its unique product based on its quality and delivery system (Gonzalez).
An example of a company that focuses on product differentiation as a way of gaining competitive advantage is Starbucks in its coffee offerings. Starbucks achieves product differentiation by offering high-quality and differentiated coffee products.

Through innovation and effective sourcing of the quality coffee beans, Starbucks ensures that it offers the finest coffee to its customers. This has been a key to Starbucks’ competitive advantage in the coffee industry. It helps in maintaining customer loyalty to the Starbucks brand of coffee products. Despite the high competition in the industry, Starbucks is able to create a high demand for its products at profitable prices.
References
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Armstrong, Gary, Philip Kotler, and Marc O. Opresnik. Marketing: An Introduction. Boston [etc.: Pearson, 2017. Print.
Gonzalez, Mercedes. “An Insider’s Guide to Running A Successful Retail Store Chapter 2: How to Determine Your Target Market.” YouTube, uploaded by Shopify, 30 October 2014, http://www.youtube.com/watch?v=yKdylkCiy10