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Chapter #5

Chapter #5. Product Differrentiation. Victoria’s Secret. Who is Victoria ? Retired fashion model Thinking about starting a new family Has an adventurous sexy side Loves good food, classical music and great wine Travels frequently, at home in New York, Paris, LA or London

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Chapter #5

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  1. Chapter #5 Product Differrentiation

  2. Victoria’s Secret • Who is Victoria? • Retired fashion model • Thinking about starting a new family • Has an adventurous sexy side • Loves good food, classical music and great wine • Travels frequently, at home in New York, Paris, LA or London • Fashion tastes are edgy but never to the extreme • Sexy and alluring never cheap, trashy or vulgar • Beautiful and sexy, knows it is her brains not her looks that have enabled her to succeed in life • Created a lifestyle

  3. Product Differentiation • It’s about perception • Sam Adams • Rolex vs Casio

  4. Ways firms can differentiate their products • Directly on the attributes of its products or services, or… • Product features • Product complexity • Timing of product introduction • Location

  5. Ways firms can differentiate their products • On relationships between itself and its customers, or… • Product customization • Consumer marketing • Product reputation

  6. Ways firms can differentiate their products • On linkages within or between firms • Linkages among functions within a firm • Linkages with other firms • Product Mix • Distribution Channels • Service and Suppor

  7. Focusing on the attributes of a firm’s Product or Services • ProductFeatures • Product Complexity • Bic • Mount Blanc • Cross

  8. Focusing on the attributes of a firm’s Product or Services • Timing of Product Introduction • First Mover • Location • Disney World

  9. Focusing on the relationship between a firm and its Customer • Product Customization • Mountain Bikes vs Schwinn

  10. Focusing on the relationship between a firm and its Customer • Consumer Marketing • Mountain Dew • Pepsi • CocaCola • Fanta • Reputation • Positioning

  11. Focusing on Links within and Between Firms • Links between functions • Effective multi-disciplinary teams • Links with other firms • NASCAR • Co-brand • Product placements

  12. Focusing on Links within and Between Firms • Product Mix • Products or services are technologically linked • Single set of customer purchases several of a firm’s products or services • Distribution Channels • Service and Support

  13. Product Differentiation and Environmental Threats • Entry • Rivalry • Substitutes • Suppliers • Sugar • Buyers • Quasi-monopoly

  14. Product Differentiation and Environmental Opportunities • Xerox & Paper

  15. Ethical dilemma does a product do what it says it will? • Loseweight • Hairloss

  16. Product Differentiation and Sustained Competitive Advantage • Rare Bases • Imitability • Inform competitors • Product features

  17. Substitutes for Product Differentiation • Many of the bases of product differentiation can be partial substitutes for each other • Using other strategies

  18. 3M

  19. Can Firms be both low cost and differentiated? • The argument for no • Stuck in the middle

  20. Can Firms be both low cost and differentiated? • The argument for yes • Successful innovation leads to increased sales • Increased sales leads to lower costs

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