What is the goal of product differentiation?

The goal of product differentiation is to distinguish a product and enhance its appeal in the market. This process involves creating unique attributes or features that set a product apart from competitors. By doing so, a company can attract specific target audiences who may value those distinctive qualities, whether they relate to functionality, design, branding, or customer experience. Successful differentiation often allows a company to command a premium price, build customer loyalty, and reduce the threat of competition.

Differentiation not only enhances the product's appeal but also contributes to the overall market strategy by positioning the product as a preferred choice among consumers. This can lead to increased market share and profitability as it helps to forge a unique identity for the product in a crowded marketplace.