Appeal is made to a variety of different customers by adding or subtracting tangible features to the same basic product. Examples would be several varieties of food items at a restaurant, different styles of mens' pants for a clothing manufacturer, or various models of all-terrain vehicles with different engine and transmission options.
Critical relationships necessary in the current reality for this approach to work are that our business has extra production capacity or an aggressive growth plan.
Strategic solution implementation is simply selling the same basic thing to a new customer. We are "taking a second bite" out of a competitor's existing customer base, or we are adding to the market's overall customer base. To ensure that this approach works, the current reality analysis of the competitors is crucial.
Negative branch pitfalls include marketing misjudging the new market, engineering leading, and investing funds we don't have in new tooling and manufacturing resources. Simple and safe applications of this intervention are selling the same thing to customers in a different "place" and selling a variety of the same basic "product" at different "price" points.VERTICAL FEATURE DIFFERENTIATION
Often missed due to the visibility or obvious tangible elements of the horizontal features approach. The vertical feature approach is intended to sell more product to the same customers, more frequently. The "more product" sold may be the same product, or it may be a completely different product/service then was originally sold to that customer. Examples are liquor and dessert sales to a restaurant customer and convenience stores. It is far easier to sell something else to the same customer than it is to find a new customer.
Critical relationships for this approach include several of those mentioned for horizontal features. However, the marketing emphasis is on the way the same customer uses the tangible related products.
Strategic solution implementation mandates that the common ground relating the different tangible products to be sold to the same customer is the current reality of the customer. This solution should be used prior to horizontal differentiation and should be applied in our company's current reality near the beginning of the growth stage in the product life cycle as shown in figure 2.
Negative branch reservations are the design of the differentiation based upon utilization of a common resource of the supplier.
DOMINANT EDGE DIFFERENTIATION
A less frequently seen approach and also a more difficult and dangerous approach. The essence of this approach is to top end every competitor's product. Examples illustrating this are the Dodge Viper, personal computers, and Dillon Reloading Presses.
Strategic solution elements include top-ending the competition on a factor that interests the market, and resources developed for the top-end market should be applied judiciously to other segment at lower price points.
Negative branches are selecting a dominant edge that the market does not care about, investing in a dominant edge prior to ensuring that the base factors are robust enough, or the dominant edge stealing market from our own existing products that are still in their life cycle growth stage.
Based upon the way the customer uses or experiences the product. The tangible product is augmented through intangibles such as options, warranties, delivery, lead time, service, etc. Examples of this approach are Hardees/McDonald's and the companies from It's Not Luck, Pete's Printing and Pressure Steam.
Critical relationship preconditions include extra production capacity or an aggressive growth plan, and a sales force that can relate to the customer's needs. It cannot be used if our marketing and sales department has weak TOC current reality and evaporating paradigm (cloud) ability.
Negative branch concerns are not looking at differentiation through the customer's eyes, and staying too close to our current features and resources.
To Be Continued
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