Assessing and Increasing Product and Family Differentiation in the Market

To help guarantee profit and stability in today’s global market, companies must focus on the differentiation of their products. Successfully differentiated products will attract customers, generate revenue and benefit the brand image, whereas a banal product can lose money and leave a bad impression in the market. Many large companies have recently lost significant market share in part due to poor product differentiation. This paper introduces four indices to assess this differentiation at two levels—family and market—based on product function and function attributes. At the family level, the Product Differentiation Index (PDI) assesses the differentiation between a product and other products in the rest of the family and also the differentiation within the family. At the market level, the Family Differentiation Index (FDI), Family Coverage Index (FCI), and Family Un-coverage Index (FUI) assess the differentiation, the coverage, and the uncoverage of a family with another, and/or with the rest of the market, respectively. These indices help designers and marketers evaluate the positioning of their products and support product family planning. A case study involving two competitive single-use camera families is presented.