[Music] differentiation strategies are attractive whenever buyers needs and preferences are too diverse to be fully satisfied by a standardized product or service the essence of a broad differentiation strategy is to offer unique product or service attributes that a wide range of buyers find appealing and worth paying for a company attempting to succeed through differentiation must study buyers needs and behavior carefully to learn what buyers think has value and what they're willing to pay for then the company must include these desirable features to clearly set itself apart from rivals lacking such product or service attributes successful differentiation allows a firm to command a premium price and/or increased unit sales because additional buyers are won over by the differentiating features and or gain by early to its brand because some buyers are strongly attracted to the differentiating features and bond with the company's products companies can pursue a differentiation strategy from many angles like a unique taste like red bull or Doritos multiple features like Microsoft Office or the Apple iPhone a wide selection of one-stop shopping like the Home Depot or amazon.com superior service such as Ritz Carlson or Nordstrom engineering design and performance like mercedes-benz or BMW product reliability like whirlpool or Bosch quality manufacturing like Michelin or Toyota and technological leadership like 3m a uniqueness driver is a value chain activity or factor that can have a strong effect on customer value and creating differentiation differentiation opportunities can exist in activities along the industries value chain and particularly in activities and factors that meaningfully impact customer value such activities are referred to as uniqueness drivers and have a high impact on differentiation rather than on a company's overall cost position ways that managers can enhance differentiation through the systematic management of uniqueness drivers include the following seeking out high quality inputs striving for innovation technological advances pursuing continuous quality improvement emphasizing human resource management activities that improve the skills expertise and knowledge of personnel an improving customer service or adding additional services well it's easy enough to graph that a successful differentiation strategy must offer value in ways unmatched by rivals a big issue in crafting a differentiation strategy is deciding what is valuable to customers typically value can be delivered to customers in three basic ways first including product attributes and user features that lower the buyers costs second incorporate tangible features that improve product performance and third incorporate intangible features that enhance buyer satisfaction in non-economic ways differentiation strategies tend to work best in market circumstances where buyers needs and users of the product are diverse there are many ways to differentiate the product or service that have value to buyers few rival firms are following a similar differentiation approach and technological change is fast-paced and competition revolves around rapidly evolving product features differentiation strategies can fail for any of several reasons a differentiation strategy key to a product or service attribute that are easily and quickly copied is always suspect differentiation strategies can also falter when buyers see little value in the unique attributes of a company's product and overspending on efforts to differentiate is a strategy flaw that can erode profitability a low-cost provider strategy can always defeat a differentiation strategy when buyers are satisfied with a basic product and don't think extra attributes are worth a higher price [Music]