Answer to Question #264505 in Marketing for Akhona Klanisi

Question

A company pursuing a differentiation strategy strives to create a product or service that customers perceive as being different in some important way. Customers need to believe that the product or service offered has differentiated qualities that are worth paying a premium price for.

 

Provide practical strategic recommendations for how Woolworths South Africa can better differentiate its products and services for each of the following three divisions: 1) Woolworths Food Division 2) Woolworths Fashion, Beauty and Home Division 3) Woolworths Financial Services Division.

Answer 1

Provide practical strategic recommendations for how Woolworths South Africa can better differentiate its products and services for each of the following three divisions:

1) Woolworths Food Division

Woolworth can try to focus on Superior Taste and Quality. One way to differentiate a brand is by emphasizing superior product quality. Success in differentiating a fast food brand on taste quality revolves around impacting advertisements backed by a great product. Even if the company's price points are higher than those offered by others, it is critical that customers believe the taste quality exceeds the quality of less expensive competitors. Developing a distinctive taste or cooking process is often a better opportunity for differentiation than competing on cost with large chains.

2) Woolworths Fashion, Beauty and Home Division

The fashion industry needs to regain its differentiation through product distinction. For far too long brands have moved toward a vast sea of sameness. Every product from every brand looked all the same. As this has been happening, people have moved even closer to having the primary differentiation coming only through price. If businesses can’t differentiate their product on originality of design or other product attributes, then all they can do is to be cheaper than the other competitors.

3) Woolworths Financial Services Division.

In Digital Secret Shopping Studies, consumers are asked to review the product comparison tools on financial brand websites. Time and time again, the visual execution for these tools often leave consumers feeling confused as they struggle to distinguish different types of products. To address this, a company like Woolworth can add a guided selling product recommendation quiz that provides a personalized solution based on a consumer’s unique situation. They can also benchmark and position their financial brand’s products on their website directly against their competitors’ products in the marketplace. They can’t stop consumers from comparison shopping, but anchoring their products against their competitors can give them some influence over the narrative.

Reference

Calori, R., & Ardisson, J. M. (1988). Differentiation strategies in ‘stalemate industries’. Strategic Management Journal, 9(3), 255-269.