Definitions from Porter's Five Forces
Task: Identify three business terms. Define each from three different sources.
Terms & Definitions:
Product Differentiation
Making products that stand out from the competition in terms of price, quality or service. Methods include:
Establishing a strong brand image for a good or service.
Making the unique selling point of a good or service clear.
Other competitive factors, such as having a better location, design, appearance or price than rivals.
A marketing process that showcases the differences between products. Looks to make a product more attractive by contrasting its unique qualities with other competing products. When successful, creates a competitive advantage for the seller; customers view these products as unique or superior.
Can be as simple as packaging goods in a new or creative new way.
Creating an advertising campaign or sales promotion can achieve this.
Specific kind of business and marketing strategy. Focuses on a target market in which competitors already offer similar products or services. Companies using this try to create the perception that their version of this product or service is somehow different and thus has added value that is not available elsewhere.
Essential in any kind of business; if the public perceives no difference between two products, the only means of competition is through pricing.
Example: In the D&M case, D&M used a form of product differentiation to boost their sales. They were known as “the company” to buy a dishwasher from, whether that dishwasher was bought at Sears or any other store.
Bargaining Power
The relative capacity of each of the parties to a negotiation or dispute to compel or secure agreement on its own terms.
Ability of customers of the industry to influence the price and terms of purchase. The buyers are powerful when:
They are concentrated and buy in large volume.
Their purchases are a sizable percentage of the selling industry’s total sales.
The item being purchased is
Terms & Definitions:
Product Differentiation
Making products that stand out from the competition in terms of price, quality or service. Methods include:
Establishing a strong brand image for a good or service.
Making the unique selling point of a good or service clear.
Other competitive factors, such as having a better location, design, appearance or price than rivals.
A marketing process that showcases the differences between products. Looks to make a product more attractive by contrasting its unique qualities with other competing products. When successful, creates a competitive advantage for the seller; customers view these products as unique or superior.
Can be as simple as packaging goods in a new or creative new way.
Creating an advertising campaign or sales promotion can achieve this.
Specific kind of business and marketing strategy. Focuses on a target market in which competitors already offer similar products or services. Companies using this try to create the perception that their version of this product or service is somehow different and thus has added value that is not available elsewhere.
Essential in any kind of business; if the public perceives no difference between two products, the only means of competition is through pricing.
Example: In the D&M case, D&M used a form of product differentiation to boost their sales. They were known as “the company” to buy a dishwasher from, whether that dishwasher was bought at Sears or any other store.
Bargaining Power
The relative capacity of each of the parties to a negotiation or dispute to compel or secure agreement on its own terms.
Ability of customers of the industry to influence the price and terms of purchase. The buyers are powerful when:
They are concentrated and buy in large volume.
Their purchases are a sizable percentage of the selling industry’s total sales.
The item being purchased is