by Christina Pomoni

Created on: August 23, 2008

In the constantly changing market environment, consumers develop new needs and wants, which need to be met and satisfied. To anticipate the rapid swifts in consumer preferences, organizations need to launch unique products or services in order to remain viable and competitive.

Product uniqueness is a differentiation strategy, which is concerned with the launch of a product or a service for unmet needs. Typically, a firm's profitability is subject to the attractiveness of the industry in which it operates and the firm's positioning in the market. Through product differentiation organizations try to achieve a competitive advantage by increasing the perceived value of their products and services relative to the perceived value of the products and services of their competitors.

To convince consumers that a product or service is unique, organizations need to appeal in consumers' emotional considerations. For example, even if two products or services offered by two different organizations are exactly the same, one may have a differentiation advantage over the other if consumers perceive it as more valuable.

Although product uniqueness is subject to customer perceptions and preferences, firms may influence these preferences by several ways. For example, a product or a service is unique when it has different product or service features. This means that the product or service has modified properties, compared to similar products or services, which may influence customer preferences.

The location of a firm may also be a source of product differentiation. For example, if an organization is located close to consumers it may have a differentiation advantage over an organization that is located further away and makes it difficult for customers to get to it.

Brand recognition and preference is another source of product differentiation. If consumers prefer a certain brand over others and they are strongly motivated to purchase a particular product or service, the firm has a strong differentiation advantage. Brand reputation is hard to develop, but it may last long if customers are repeatedly satisfied by their interaction with the firm.

Timing is also important in product uniqueness. Taking the first movers' advantage and introducing a product or a service at the right time may contribute to customer utility in a different way than competitive firms do.

Finally, products or services are unique to the extent at which they are customized for particular customer applications and distributed through alternative distribution channels. For example, a bottling firm may distribute its products through a network of independent bottlers. The firm manufactures key ingredients for its soft drinks and ships these ingredients to local bottlers, who add carbonated water, package the drinks in cans or bottles, and distribute them.

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