Saturday, January 16, 2010

Differentiation Competitive Strategy

In a differentiation competitive strategy, a company tries to differentiate its product from that of its competitors. By differentiating its offer, every company tries to create a desirable image in the minds of consumers relative to competing products. This way competitors may find it harder to convince consumers that the company;s product is not better than theirs. A good example of differentiation strategy is of Gillette.
This type of competitive strategy is extremely handy for those companies who want to charge skimming pricing. When customers know that they are getting something special, they may not hesitate in paying a higher price for the product.