Differentiation is a key component of product marketing. Search my website for the word differentiation and you’ll see I’ve written about it often regarding Apple because few technology gadget makers do it better.
This is what pops up on a Google search:
noun: differentiation; plural noun: differentiations
the action or process of differentiating.
“packaging can be a source of product differentiation”
synonyms: distinction, distinctness, difference; separation, demarcation, delimitation
“there is not enough differentiation between the two types of investment”
Differentiation is Apple’s secret sauce that isn’t that much of a secret. Differentiation also carries a few marketing axioms. For example, assume Apple’s iPhone is the smartphone industry’s top product. How would a smartphone maker compete against Apple and carve out some marketshare.
First, the company could build a better smartphone than Apple’s iPhone. It could happen. After all, the iPhone itself, back in 2007 when it launched, was notably different than phones of the era; easier to use, more comfortable, more compelling. In essence, it was a better smartphone. So, any company that wants to compete against Apple’s iPhone must have a demonstrably better device priced at about the same as the iPhone, otherwise, what’s the compelling reason to switch.
Second, the company could build a smartphone that competes feature-to-feature with the iPhone; completely matching functionality and capability in nearly every way. In this case, though, the competing device would need to be sold at a lower price point than iPhone, otherwise, what’s the compelling reason to switch.
We see this exact scenario being played out now with Android smartphones, most of which are priced less than iPhone, compete with one another on price, and claim to do about the same thing as an iPhone. Samsung’s Galaxy S8 and Note 8 attempt to outdo the iPhone on the premium side of the spectrum with more features and some advanced capabilities, but fail to attract iPhone customers to switch, and need to discount their products to stay competitive in sales.
The problem here is obvious. Apple is a moving target.
Each year the iPhone line gets better and recently broader. Five iPhone models range in price from $349 to $999, with three new models this year alone, with all three sporting premium features that work well together in a cohesive ecosystem. Even better, all five models run the latest operating system, iOS 11.
As macOS and OS X was to the Mac vs. Windows era, iOS vs. Android is a similar differentiation. Functionality might be similar, but differences are sufficient that Apple can soak up most of the industry’s profits wherever it places a product.
Apple’s whole approach to conducting business seems to be based upon differentiation. Look how Apple Stores are operated vs. competing retail outlets. Every product fits well into the ecosystem with other products and services, and each is sufficiently different than competitors that customers are not easily enticed to leave.
Differentiation is Apple’s not-so-secret sauce and until a competitor can do what Apple does better than Apple or as good as Apple (but for a lower price) nothing will change.