Product Differentiation and Unique Selling Proposition

lil dickie said: "I think differentiating your product is needed more than ever these days. If you go into business to offer yet another service or product that is similar to existing ones, what chance do you really have of capturing market share? What do you think?"

chahinemm said: "not necessarily true considering first that how big the market itself is. if the market is a niche yeh i agree but if the market is humongous and hard for few companies to tame then the more people come in the higher chances to fill the gaps that exist. it also depends on the user awareness of ur product. perceived quality and ur marketing strategies (if u go to compete on price or quality) but usually price competition "results in 2 dead bodies" so not recommended unless u have deep pockets. it also depends on the local regulations. so i personally don't agree necessarily with differentiation yet its necessary to make other customers come to u but other factors can help it improve to make it in ur favor. chahine"

lil dickie said: "I know a lot of people attempt to differentiate on price, but I don't know if thats enough. Look at how well Nextel did with walkie talkies. Sometimes a gimmick can be enough to differentiate."

chahinemm said: "the way usually i try to differentiate myself is in few of the following ways and some offcourse are to protect myself. first i take the product service i want to sell. and check the lost price i can provide it at. after i analyze the competition and deduct at least 1/2 its value and remove another 1/3 of it. From that price i see if the lowest price i can provide it is lower or higher if higher forget it or go further in detail. if its lower i compare industry standards and prices and try to match my prices as close to competition as possible so both competition and myself maximize profit. but there are times where big clients i give slashed discount to cover up and get the reputation from which more clients join in and recuperate the slashed price. from that if the competition decide to reduce price i can compete against them but at the same time maximize my return. and i beleive this strategy is and can be superimposed on virtually any product or service. i would be interested to hear what u guys beleive would be good business strategies. to protect from downsides as always in busienss upside in the sky. chahine"

alhamid said: "keep in mind, compete on price can be very dangerous! if raw materials costs go up, you can be in big trouble."

chahinemm said: "offcourse but assuming that one provders cost goes up but if u take in approach that the general price of raw material goes up than ur competitiors costs are also going to go and therefore will increase their profit margins to cover up which therefore result in higher profit for u if u follow their higher price strategy.. but that may also loose some sales yet that depends mainly on the nature of the product which might or might now have easy substitutes. chahine"

lil dickie said: "Usually, if you can increase volume, the lowered cost basis can make you really competitive. But it's very tough to get big enough where your purchasing power means much."

chahinemm said: "but there is also the turnover of goods though... u might not necessarily buy a lot in one go but buy a lot in small repetitive batches... :D chahine"

OptiWiz said: "High turnover can have a lot of costs though. But worse yet is inventory that just won't sell."

chahinemm said: "[QUOTE=OptiWiz]High turnover can have a lot of costs though. But worse yet is inventory that just won't sell.[/QUOTE] good point :| chahine"