Product Differentiation

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A lot of recent content on the Beyond Cost Plus site has focussed on price discrimination and differential pricing, the difference between the two, and the role played by product differentiation.

Later a perfect real world example of product differentiation came to mind. In “Duffless”, an early episode of The Simpsons, Homer got to visit Duff Brewing and witnessed an important reality of product differentiation:

product_differentiation_at_duff_brewing

The only thing that matters is the perceived difference. There doesn’t even have to be a real difference as long as the customer perceives enough difference to distinguish the product.

That can be achieved through differences in quality, or functions and features, but it can also be achieved solely through packaging, marketing, advertising, etc. The key is only that customers perceive a difference.

It is also nice to see that this Duffs tradition lives on at their “real” brewery in Florida.

product_differentiation_example

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