what is product differentiation 
product differentiation distinguishes one company s products or services from its competition successful product differentiation leads to brand loyalty and sales a product differentiation strategy identifies and communicates the unique qualities of a product or company while highlighting the differences between that product or company and its competitors product differentiation can create a competitive advantage for the product s seller and build brand awareness investopedia sydney burnsmarketing strategyproduct differentiation is a marketing strategy to encourage consumers to choose one brand or product over another it identifies the qualities that set one product apart from similar products and uses those differences to drive consumer choice differentiation marketing may also focus on a niche market differentiating qualities may be reflected in a product s packaging marketing promotion or brand name a strategy may require adding new functional features or might be as simple as redesigning packaging sometimes differentiation marketing does not require any changes to the product but a new advertising campaign or other promotions the differences between products can be physical or measurable such as the lowest price gym in a region however the differences between the products could be more abstract such as a car company claiming their cars are the most luxurious product differentiation aims to alter a consumer s interpretation of the benefits of one item compared to another the actual difference in the product compared with competing products might be small or nonexistent companies that achieve high market research metrics for brand loyalty and customer loyalty grow revenues 2 5 times faster than industry peers and deliver two to five times the returns to shareholders over 10 year time frames according to a study by the harvard business review 1