final product diffrentiation

8/6/2019 FINAL Product Diffrentiation

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Product Differentiation

Presented to

Prof. SAMIK SHOME

By :- (Group 3)

Abhishek Kumawat

Biswajit ShuklaManpreet Singh Chhabra

Palak Shruti Dubey

Sadaf Ali Khan

Tejus Y S


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What is Product Differentiation ?What is Product Differentiation ?

The effort by firms to produce goods

that are different from other typesof goods.

Example:- Automobile models

Major activity of both existing and

potential new firms.


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Objective of Product DifferentiationObjective of Product Differentiation

To develop a product that is perceived as

unique by the potential buyers.

LOGITECHS WIRELESS KEYBOARD AND MOUSE


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Monopolistic CompetitionMonopolistic Competition

Monopolistic competition is a common marketstructure where many competing producers sell

products that are differentiated from one another.

Perfect Competition

Many firms, free entry

One Product

Monopolistic Competition

Many firms, free entry

Differentiated Product

Monopoly

One firm, no entry

One Product


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Examples-

Small Retail Stores

Restaurants (especially Fast Food joints)

Barber Shops


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FEATURES OFA PRODUCTFEATURES OFA PRODUCT

Technical Standards.

Quality Standards.

Design characteristics.

Service characteristics.


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Vertical Product DifferentiationVertical Product Differentiation

Afirms product differs from its rivals products in respect toQuality.

Superior And Inferior Products.

In terms of the quantity and quality of the functions and/orthe durability of the product.

Vertical Quality differences between products tend to

reflect differences in production costs.


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Horizontal Product DifferentiationHorizontal Product Differentiation

A firms product differs from its rivals as well as its ownproducts , although those products are seen to be of similar

quality.i.e. products are not generally regarded as

superior or inferior.

Differ in respect to style, design, colour , etc

Within a range do not significantly alter costs ofproduction.


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Puzzles ExplainedPuzzles Explained

How Product Differentiation explains puzzling facts if all goodswere homogenous.

Intra-Industry Trade :-

Traded between countries in goods from the same orsimilar industries.

Example:

U.S both buys and sells beer to Canada.

In order for people to benefit from the variety of beer.

Budweiser(U.S) being exported to Canada.

Molson(U.S) being exported to U.S.


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Contd..Contd..

ADVERTISEMENT

Product Differentiation explains why there appears to be

so much advertising. If all products were homogenous, advertising would

make little sense.

Even the greatest product wont sell if no one knowsabout it.

Way to provide information how products differ.

Purpose is to make people try new products.

Advertising will never sell inferior product.

It is used to create a perception about product

differentiation rather than genuine differences.


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Effect of AdvertisingEffect of Advertising


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Contd..Contd..

ConsumerInformation Services.

Helps consumers sort through exaggeratedclaims in advertising or help them get a better

perception of what the real differences between

products are.

Example :-Bike Magazines.


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How Are Products Differentiated?How Are Products Differentiated?

y Physical Characteristics

y Customer Service

y Location

y Time

y Convenience

y Reputation


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Optimal AmountOptimal Amount


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Individual firm Demand CurveIndividual firm Demand Curve


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EQUILIBRIUM IN THE LONG RUN


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CONCLUSIONCONCLUSION

y Product differentiation creates customer

preferences.

y Almost anything can be a base of

differentiation

y Product differentiation principles can be

applied to our personal and professional

lives.


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Thank You.Thank You.

final product diffrentiation

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