Product Differentiation

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Product differentiation

This must not be confused with the previous symptom, product proliferation. Product differentiation refers to the qualitative and technological differences between products as offered by the various competing suppliers. Early on in the life of products differences tend to be greater than subsequently. Suppliers are experimenting with formulae and processes, establishing the basic physical properties of the product.

Motor cars offer an interesting illustration of both the proliferation and the differentiation symptoms: proliferation of models, colours, extras, power-packs, today is greater then ever. Differentiation (say, between manufacturer A's 4-cylinder family saloon and manufacturer B's 4-cylinder family saloon) has been reduced substantially compared with say, 40 years ago. In most eases changes in the degree of differentiation (for that is what is relevant in our context) are not difficult to establish.


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