Working for a company and getting a market research report that says that your product category is mature, is not ideal. Essentially, that market research report is telling you that your product is seen by customers as being identical to those of the competitors. The ability to differentiate your product is gone, and at that point the primary lever that you have left is price. In the 1990’s Pennzoil, facing pricing competition from a number of competitors such as Castrol, decided to take a term that would only be familiar to a very few people, such as engineers studying fluid dynamics, and educate the population of auto owners about the term, and then convince them that “thermal breakdown” was something that they needed to avoid in their family cars and that Pennzoil’s superior “viscosity” was the answer to a better protect their engines. By the way, May 26th 1992, US District Judge Alfred Wolin required Pennzoil to suspend such advertising because their claims had not been proven.
Product differentiation is typically tested by a market research project to understand whether the unique qualities are meaningful, believable and something that might sway a customer in a purchase decision. Differentiation is essentially about finding something that your product does better than the competition, and that matters to customers (or making customers understand why it should matter to them). The whole point of differentiating a product is to gain competitive advantage by demonstrating the unique characteristics or capabilities of your products in order to prove your product’s superior value.
What are your product differentiators, and how do they play with with your target market?
