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Ways to differentiate products

shilpi (student) (780 Points)

06 April 2017

Is lowest cost one of the way to differentiate products?In my view ..No ..because Differentiate strategies focus only on price insensitive and loyal customers .

Recently ,Cost leadership strategies adopted by Jio ,focussed on price sensitive buyers and captured whole market successfully.

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6 Replies

Suresh Pai S (Tax Consultant) (1029 Points)
Replied 06 April 2017

What's your issue actually?

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Suresh Pai S (Tax Consultant) (1029 Points)
Replied 06 April 2017

Nowadays most businesses are adoption diversified strategies. There is product diversification and also market diversification. All other strategies are becoming extinct.

Suresh Pai S (Tax Consultant) (1029 Points)
Replied 06 April 2017

We cannot predict the actions of Jio. He was just benchmarking his new business. While he capture the market, he may resort to price leadership which is evident is telecom industry.

shilpi (student) (780 Points)
Replied 06 April 2017

I am talking about porter's generic strategy .There are three strategies.,Cost leadership ,Differentiation,Focus strategies.

An organization apply differentiation ,when market is composed of many price -insensitive buyers.

But

In our module the meaning of differentiation is "greater product flexibilty ,compatibility ,lower costs ,improved service,less maintenance ,greater features etc."

shilpi (student) (780 Points)
Replied 06 April 2017

according to porter 's theory jio's strategy was cost leadership and in marketing theory , "market penetration strategy "is the suitable name.

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Suresh Pai S (Tax Consultant) (1029 Points)
Replied 08 April 2017

Dear Shilpi,

In the text book the meaning of differentiation strategy is given exactly as you gave. What you wrote was the outcome of the differentiation strategy and it is given from the customer's point of view.

Jio's strategy is definitely a cost leadership strategy but it can't never be market penetration strategy because the features of the product is changed and made available at a very lower cost. In fact they were not charging anything from us for a major period.

Market penetration strategy works on increasing the sales to the existing market without making any major changes. Here the cost is definitely a change and also 4G is also a major change. Even though 4G was introduced by airtel many were not using it because of its higher cost. Hence most of us were using 4G for the first time. Market penetration is done by excessive promotional campaigns may be what VIVO is doing now. They are giving advert everywhere.

This is my opinion.

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