Differentiation

The concept of differentiation is one of the most basic to human perception. Psychologists have studied the human (and other animals) cognitive processes by which they distinguish one thing from others. This basic ability is essential to survival. For instance, differentiation allows humans to know what is edible and what is not.

By this logic, organizations need to stand out as unique among their competitors for resources. Thus, marketing, management, and communication professionals seek to differentiate their organizations, as well as their products and services, from those of their competitors.

Differentiation results when stakeholders (markets and publics) make attributions about an organization that, at least in part, distinguish it as different or unique in some meaningful way. The assumption is that customers make strategic distinctions among competitors. The most obvious distinctions might be as simple as price, quality, availability, customer relations, and reputation of the organization.

Differentiation is also vital for nonprofit organizations. They work to provide unique community-based services. Thus, some support the arts (museums or theaters). Others address needs of specific populations. For instance, nonprofit hospitals raise money to provide services that might depend on a specialty (burn treatment or cancer treatment) or for a demographic class (children or the indigent). The United Way differentiates itself by raising funds for a variety of charitable purposes. The Light House for the Blind serves individuals who have limited or no vision capability.

Differentiation occurs even in the governmental sector. Some agencies build or repair roads. Others provide emergency and safety (police, fire) response. Some protect water quality, and others handle solid waste. Various military branches compete for funding based on their unique service to national security. The United States Postal Service competes with commercial package delivery rivals.

Differentiation is a marketing decision. Businesses are differentiated by product line (chemical manufacturing versus farm implement manufacturing) and by product type or line (pickups, SUVs, minivans, sedans, or subcompacts). Product positioning can include filling a market niche, such as high-cost luxury watches versus low-cost sports watches. Discount stores are different from top-end department stores and specialty boutiques.

Placement can also be a matter of differentiation. At the counter of movie theatres one would expect popcorn, soft drinks, hot dogs, and candy, but not pickups and farm equipment. Specialty products are often sold in specialty stores or even by brand name. Apple, for instance, knows and benefits from this principle.

Positioning is also a matter of differentiation. What markets does a company serve? What markets within its industry does it not serve? Is it retail or wholesale? Is it long on service and short on product? Or is it the opposite? Quality is also a positioning decision that can differentiate products and the companies that sell them. Think of the varieties of alcoholic beverages that are available—to satisfy all tastes.

Many of the matters of differentiation mentioned above are the primary responsibility of marketing. Others come closer to the purview of public relations. Some advocate, for instance, that customer relations should be a primary function of public relations. Organizations differentiate themselves by how well they respond to the needs, wants, and concerns of customers. Product support can be a matter of differentiation, as well as the return policy.

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