Brand differentiation is a way for a business to be recognized in their field. A company could easily stand out at the top because of its unique and differentiated products, as well as its value proposition. However, another company could be playing on cost rather than implementing product differentiation. Managing your cost is important, but it doesn't promise you consistent growth if you are in a perfect competition market. This is because sooner or later, there will be a competitor that would offer a price lower to yours. Cost and product differentiation are both important in any industry. You must try to experiment with your products to ensure you provide the most unique and cheapest products in the industry.
Why Is There A Need For This?
The world is changing at a fast pace, and consumers are continually looking for unique products for their lifestyle. The first thing a company should look out for is its consumer. You have to satisfy your consumer or else your products won't be around the market for a while. You should work on how to better serve your customers rather than squeezing every nickel and dime for yourself. However, companies are reluctant to bring in change, especially the older ones and they are too used to the way they do things. Customers would rate those older companies as an innovation-less company. They would not buy your products for the future and this would defame your company.
You Lose Customer Following:
In the worst scenarios, the company might lose its followers. This is a dark phase for the company. As this time era is all about your reach, losing following pushes you in the back of the line. If you are planning to bring in changes in product for the future, you would have a negligible audience to promote that change. As the customers would still consider you with zero innovation, this can damage your current and future growth.
Less Differentiated Products Are Prone To Be Replicated:
Do you really want to be basic? Of course, we all believe in the comfort of being basic, but you and your company must get out of the comfort zone to grow. That might mean stop being basic! Being a basic company with basic products means competitors that easily can replicate your products. Because you are not habitual of bringing in frequent changes to your products, they are easily copied. Competitors can replicate the parts of your product and can find them at lower prices. As they would be paying lesser than you, this would cause them to have a lower cost price. Since you aren't backing your higher rates than them with innovative products, people won't buy from you. You lose your market share and profit just by practicing the routine items for several years.
Experiments Lead To Innovations:
This phrase is very true when you are experimenting with your products. A planned experiment would help you to identify what changes you can bring to your product as well as how to potentially lower your price to stay competitive. This would add distinguishing features for your product. No matter how small these features might seem, they are for sure noticed by customers and considered whenever they make a purchase. Even if you don't end up getting an innovated product, there would be learning for your next try. You can put these learnings in your next experiment and end up getting an even better product than this. So, you must never stop experimenting even if you fail, as this would at least help your learning.