Differentiation There are many ways to differentiate a physical product with those in its class. These techniques include quality, function, advertising, availability, distribution, and service. All of this work very well in doing what they are supposed to but there is one that stands out on top of all the others. Companies use these techniques to differentiate there product because of how it captures and locks in the customers of their target market. To differentiate means to set you apart from the others, which is what all companies, want for their product.

Why companies differentiate Source of Competitive Advantage One reason why companies differentiate their products is that it is a source of competitive advantage. When a product is released on the market, it only has a few months before other companies can replicate the product and make it their own. There can be so many versions of a product, but companies find things to make theirs better than their competition. Take a local pizza place as an example, each business takes their pizza and provides better service whether it be from training their servers more or by having a delivery service. Pizza is such a basic product and there are many businesses that try to enter that market. The few that have superior quality or differentiate themselves in any other way are the ones that survive. Monopolistic Competition When a company achieves successful product differentiator, their market becomes a monopolistic competition. Companies that can achieve successful differentiating strategies can monopolize their business from the others very easily. Using the same pizza example, think about the local Little Caesars pizza that enters in to an area for the first time. Before there were probably little mom and pop places and maybe another chain in the area. However, they differentiate their pizza with their low