Have you ever wondered why some companies are able to offer products at much higher prices than its competitors and still outsell them?  Sure, you say, it’s because with the higher priced product you are paying for a brand.  But how did that brand become able to offer such high prices?  The answer is high product differentiation.

Product differentiation gives a company the ability to defend their prices.  This term refers to the differences that make a product stand out from others like it.  A company that has successfully used product differentiation has promoted both the key features and minor details of the item.  They have created the perception that theirs is the best and will always be the best.  Product differentiation is what gives buyers the ability to shop without needing to think.  Yes, your product may be priced higher than the one next to it on the shelf, but a customer trusts that yours is worth the higher cost.  For instance, consumers who purchase Cheerios know that it is priced a couple dollars higher than its off-brand competitor.  Cheerios buyers, though, know that it lowers their cholesterol, has less sodium, and encourages a healthier lifestyle.

Before being able to offer higher prices than your competitors, you must use product differentiation in your marketing campaign.  Your advertisements may contain tables comparing your product next to leading competitors’ products.  In these tables, emphasize the better features, reliability, and results of your product.  Many times, you may be up against loyal customers of your competitor, which is why it is necessary to make consumers rethink their purchase habits.  You may decide that free samples may also help change consumer perceptions, but this could also backfire if your product is very similar to the lead competitors’ brand.

Companies with a strong brand are not able to offer higher prices just because of the brand.  Yes, the brand may have become a symbol for those products, but the perception began through product differentiation.  Therefore, if you are trying to distinguish your company and its products as an elite brand and want to be able to charge higher prices, begin a product differentiation marketing campaign. Over time, your products just might become the new top brand.