You want to sell a substitute product to your rival and you want to sell at a higher price. How do you do that knowing that demand is elastic (Ed > 1) for substitutes?

The answer to this question is product differentiation. Product differentiation is the process of distinguishing a product or service from others, to make it more attractive to a particular target market. Firms add value to their products by differentiating their products and gain market power to charge a little extra for the added value.

1. Please research a firm that successfully uses product differentiation. Explain the firm's product and how it is differentiated.

Here are some examples:

Safe Catchhttp://

(Links to an external site.)

www.inc.com/magazine/201503/jeff-bercovici/building-a-better-can-of-tuna.html

(Links to an external site.)

Turmeric waterhttp://templeturmeric.com/press/time-magazine-artichoke-turmeric-and-more-strange-flavored-water-products-2/

(Links to an external site.)

Greek yogurthttps://loyoladigitaladvertising.wordpress.com/2013/09/23/yogurt-a-case-study-in-target-marketing-product-differentiation/

(Links to an external site.)

Chobanihttps://www.ama.org/publications/MarketingNews/Pages/culturing-subcategory.aspx

(Links to an external site.)

1. Think of a generic product and then differentiate it. Explain how you can gain market power (ability to increase the price) by differentiating your product.

Here are some examples:

GenericDifferentiated

Canned fishLow mercury canned fish

TurmericTurmeric water

YogurtGreek Yogurt

BreadGluten free bread

MilkProtein milk