A tempting way to effect increase in sales and counter opposition is to add as many features as the competition has provided to the product. Some companies go beyond just adding features. They add comparison chart with one extra tick to show that their product is superior.
Assuming that one is a small entrepreneur, it is simply not possible to gain market share against a leader without incurring significant costs in development and marketing. In fact a small entrepreneur should not even try competing head to head with the market leader.
A market leader has
- enormous clout in market
- brand image built from years
- huge marketing budget
- loyal customers unwilling to switch over
- capacity to take losses and wipe out competition
- price advantage because of scale
The key is differentiation. With better differentiation , a product can stand out on its own without competing head on with the competition.
Here are a few example of product differentiation ( these examples are from big companies, but we can learn from them ) that I scoured from the net.
Dell – Differentiated by offering online purchase and home delivery of product ( Different way of doing things)
McDonald – Adding local flavor in order to compete again strong traditional eating out joints in various countries ( localization). Big article here.
Apple – By bringing in the coolness factor in cell phone industry ( differentiating by design )
Samsung – Bringing cell phones to every segment in the market ( A variety of products) . A good slideshare presentation for marketing mix ( not Mobile phones )
Facebook – Social media alternative to market leader Google ( Completely unrelated strategy to capture same market – advertising) . One good article here.
WhatsApp – Making SMS social ( Making a technology cool )
IBM – Support to open source projects ( brand reputation ). See here
I gave enough material to you to read.
The point is simple, product differentiation can happen many ways. An entrepreneur needs to discover that segment area which is
- needs lesser resources to develop
- is away from prying eyes of big competitor
Image courtesy of [Stuart Miles] / FreeDigitalPhotos.net