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By SaiSatish Vedam – Ex- Senior Director of Product Management, Oracle
In product management, mastering product differentiation is a crucial element for product success. Differentiation is about establishing uniqueness and superiority in your product compared to the alternatives and competitors in the market. Often, this is executed via marketing and messaging techniques.
Differentiation is similar to product positioning. It is identifying who your customer segment is and identifying compelling reasons why they should buy your product and creating a nice narrative or message using the appropriate channel that resonates with your customer segment and taking the message to them. So often, people think of this as a marketing and messaging strategy which is not entirely wrong. But a very important question that we should ask is- who else is responsible for communicating and highlighting that differentiation? The answer is- the product management team, engineering team, sales team, and sometimes even key partners that you are working with.
All people involved in the product development process should come together and understand that their product is different. But just understanding that is not enough. The customers also need to think the same way about the product.
1. The first step in this process is to grab your customers’ attention. You should generate demand from the market for your product given that there are so many choices, and something that helps you stand out in the market by focusing on the specific features or the attributes that set your product apart from the competition.
2. The second step is to establish your product’s superior value. Product managers should communicate it using various techniques and establish your product’s unique value proposition in the minds of customers.
3. The third step is to take the focus of the customer away from the price and bring the focus on the value. When you are starting, competing with low prices is not a bad strategy. But it is only sustainable for a short time. The simple reason is that someone with better resources and more money can undercut you very easily. It is also a bad way to enter a market where people compete in price because that is what we call commodity markets.
The ultimate goal of all the differentiation exercises is to gain a competitive advantage.
Hence, at its core, differentiation is about gaining a competitive advantage. Product managers can do the same by effectively understanding and communicating their product’s unique value proposition to the target market. This competitive advantage is essential for driving your product’s success and enabling your product to thrive in a crowded and competitive marketplace.
Differentiation is about establishing uniqueness and superiority in your product compared to the alternatives and competitors in the market.
The strategies for differentiation are grabbing the customers’ attention, establishing your product’s superior value, and taking the focus of the customer away from the price and bringing the focus on the value of the product.
The product management team, engineering team, sales team, and sometimes even key partners that you are working with are involved in product differentiation.
A product differentiation is called successful when it leads to higher revenue and better customer loyalty.
About the Author:
By SaiSatish Vedam – Ex- Senior Director of Product Management, Oracle
