VHD1BCT 0910553                                                                                14 May, 2010

                                                                                                                                     

                                                                               

Course / Programme:        BA (Hons) Business Administration

Module Title:                         Marketing Management (MKT3001DL)

Assignment Title                        Report – Differentiation

Assignment Number:                One of Two (50% of final mark)

Student Number                        0910553

Marking Tutor:                        David Ratcliffe

Local Tutor:                                Vo Hiep Hieu

Issue Date:                                   5 April 2010

Submission Deadline:                   14 May 2010

Table of Content

Introduction        3

Definition of Differentiation        3

Product Differentiation        4

Service Differentiation        7

Personnel Differentiation        8

Channel Differentiation        9

Image Differentiation        10

Conclusion        13

Reference        13

Introduction

When Vietnam joins WTO, there is a big competition among companies. They continuously manufacture various products and offer best services. But the issue here is how they can make money from customers who only want to spend their money once.

Products are always abundant on the market. However, there is scarce situation that only one company providing products or services which is really unique. This means that the available products or services are on the way to be similar and identical. For that, differentiation is a necessary factor for all companies to think of. A company wants to survive. It must differentiate its products or services to gain sustainable competitive advantage.

This report focuses on outlining and evaluating the concepts of the differentiation and different ways of offering differentiation.

Definition of Differentiation

Kotler and Keller (2006) defined differentiation is the meaningful differences between the company’s offer and competitor offers. Differentiation is all what makes the company’s brand stands out in a sea of competitors which are almost identical. If the company does not have differentiation, it will not be possible to build a strong brand and gain competitive advantage. Products are manufactured from factories but brand is built in customers’ minds. In reality, brand is the concept that exists in customers’ perception (Tai and Chew, 2008). Brand differentiation will make positive impression to customers when they view the company. If customers cannot find the differentiation between the company’s brand and competing brands, they will buy products with lowest price. Therefore, the key of differentiation is “brand” (Kotler et al., 2006). For example, Evian is doing business as selling water. Water is a commodity available everywhere – 80% of the earth is covered by water. But water of Evian is supplied from Alps Mountain. And then mineral is added to this water. Those things made Evian become a strong brand. Water is just water but there is a big differentiation is that Evian water is mined from the Alps Mountain (Evian, 2007)

The organization can have control over many components – making creative products, lowing cost, deciding products’ quality. But brand is another matter. It occurs only in customers’ minds and it has 100% up to customers how they perceive the company’s brand. However, in the competitive market, the company needs to go beyond tradition of offering products or services. To differentiate its market offering, an organization can use the highlights of five dimensions are product, service, personnel, channel, and image differentiation.

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Product Differentiation

Differentiation of product is a business strategy that the company attempts to create a number of differences in its products to compete with competitors’ products. And these differences must be perceived by customers.  When customers perceive the differences and have preference for the differences, that company may lead the market and gain competitive advantage (Hooley et al., 2004). To have the success of the product differentiation, the company is able to effectively differentiate the main aspects of its products such as form, design, durability, features, style, performance, reliability, conformance, reparability, and style. Those basic aspects of the ...

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