Differentiation

Organizations need to stand out as unique among their various competitors. Thus, marketing, management, and communication professionals seek to differentiate their organizations from their competitors.

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

Differentiation is also vital for nonprofits. They work to provide unique community-based services. Thus, some support the arts (museums and theaters, for instance). 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 the national welfare and general peace. The United States Postal Department competes with commercial package delivery rivals.

Differentiation is primarily 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 sub-compacts). Product positioning can include filling a market niche, such as high-cost luxury watches versus low-cost sports watches. Discount stores are different from 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. Such stores are unlikely to stock the highvolume, low-cost items that are more typical of discount stores.

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 can 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.

Organizations attempt to differentiate themselves by how they relate to the people in the communities where they operate. Some organizations build rapport, solid relationships, with persons in the community. These relationships can differentiate the organization as one demonstrating commitment to the community. They work to prove that they operate in the public interest. That is an important focal point of differentiation. The way an organization seeks (or fails) to build goodwill can differentiate it from other organizations. Is it open? Is it ethical, aspiring to the highest standards of corporate responsibility? Does it share control with the members of the community? Is it willing to work to solve issues, or does it seek to dominate their resolution? Does it foster and work to meet values of its stakeholders, such as working toward a diverse workforce or demonstrating a commitment to environmental protection?

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