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Product and Service Differentiation and Positioning Strategy

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What is the relationship between a product/service and differentiation and positioning strategy?

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This solution explains the relationship between a product/service, differentiation and positioning strategy in 1500 words with three references.

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Please see response attached, which is also presented below. I hope this helps and take care.


1. What is the relationship between a product/service and differentiation and positioning strategy?

Your product is what you sell, whereas positioning and differentiation is how you go about marketing and selling your product.

Positioning: What image of your product can you put in the mind of the consumer that will make her or him buy your product - reason why the customer should buy your product?
Product Differentiation: What makes your product different from others- a reason why the customer should buy your product over another product?

The following article explains and gives excellent examples of this relationship:



Competitive advantage in the market can only be sustained overtime by creating a continuous stream of innovative products and services. The accelerating pace of change has hastened the process of product obsolescence and increase the pressure on new product development.

The increasing specialized demands of customers have led to the market being segmented into smaller and smaller segments. To gain market share companies are tailoring products for diverse segments to gain market share. Alvin Toffler' (1970) wrote." Manufactures produce for mini markets". This has started the drive towards mass customization. The proliferation of new products has seen a rapidly rising ration of new existing products. Manufacturing companies, especially those in the Engineering, Automobile industry etc. is investing heavily in the product development capabilities and competencies. The product development cycle, from concept to market, has come down from years to months.

New products create value for the customer in terms of providing new features. For the manufacturing company it provides competitive advantage by exploring new markets and the opportunity to ...

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