In the competitive market environment of today, consumers develop new needs and wants, which need to be met and satisfied. To anticipate the shift in consumer preferences, firms launch unique products or services in their effort to remain viable and competitive.
Product Uniqueness as a Differentiation Strategy
Product uniqueness focuses on the launch of products or services that aim to satisfy unmet consumer needs. By developing a unique value proposition to create a strong differential from competitors, firms aim at attracting more consumers and achieving a better positioning on the competitive market. The value proposition should skillfully integrate the increasing quality of prospective leads and market share and the improvement of operational efficiency to attract consumers to enter into a relationship with the firm. In that way, firms increase the perceived value of their products and services relative to the perceived value of the products and services of their competitors, achieving competitive advantage.
The Value of Mass Customization
Mass Customization (MC) aims at providing products and services which are best adapted to individual customer preferences. The more a firm knows about its customers’ needs the better it can serve them to its customer satisfaction and the stronger its competitive position will be in the market. As a part of product uniqueness strategy, mass customization contributes significantly to the utility customers experience by entering in a relationship with the firm, and its effects are moderated by the extent of functional fit to individual customer preferences. The more satisfied the customer by the perceived uniqueness of a product or a service, the higher the competitive advantage for the firm.
The Importance of Consumers’ Emotional Perceptions
The most important element in the process of developing unique products and/or services is to appeal to consumers’ emotional considerations. The way an individual customer perceives the value of a product or a service is the key to develop a product uniqueness strategy. For instance, if two different firms are offering exactly the same products or services, consumers will attribute a differentiation advantage over the ones they perceive as more valuable. Therefore, the perceived uniqueness of a product or a service is closely related to consumers’ emotional perceptions.
Important Elements of Product Uniqueness Strategy
Although product uniqueness is subject to consumer perceptions and customer preferences, firms can influence these preferences by several ways. The closer a firm’s products resemble competitive products the less tolerant consumers are to price differences and the more likely are to switch to competitive brands. This is why product uniqueness as a differentiation strategy needs to integrate several elements that can be both recognizable and valued by consumers.
a) Product Customization
A product or a service is unique when it has different product or service features. This means that the product or service has customized properties (compared to similar products or services) which can influence customer preferences.
The location of a firm is often a source of product differentiation. If a firm is located at a more central point, making access for consumers easier, it may have a differentiation advantage over a firm that is located in the suburbs. where consumers need more time and money to get there.
c) Brand recognition
Brand recognition and preference is another source of product differentiation. If consumers prefer certain brands over others and prefer certain products or services over others, these firms have a strong differentiation advantage over competitors. 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 often contributes to customer utility effectively.
Other important elements of product uniqueness strategy are: the product mix (the firm’s products and services); distribution channels (the pipelines through which goods and services flow from the firm to consumers and payments flow from consumers to the firm) and service and support.
In conclusion, product uniqueness is a differentiation strategy that is successfully implemented when products or services are customized for meeting particular customer needs and distributed through alternative distribution channels. Firms need to be aware of their customers’ basic needs, but they must also be able to estimate their expected needs in order to offer the expected quality and level of service. Only then, they can meet the perceived value that the customers have in their minds for particular products and services. This functional fit to individual consumer preferences can guarantee customer satisfaction, competitive advantage and successful implementation of the production differentiation strategy.