Product differentiation is a marketing strategy

What Is Product Differentiation?
Product differentiation distinguishes one company's products or services from its competition.

• Product differentiation aims to direct a consumer's attention to one or more key benefits of a product or brand.

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.