In order to improve a product or service it is necessary to offer something of value to current users. In order to differentiate a product or service, it is necessary to provide a benefit that competitors do not have. Thus, the key to improving and differentiating a product or service is the identification and delivery of an important benefit that is not currently available. In our experience there are three fundamental strategies that can produce successful product or service improvements and differentiation. Each of these approaches is discussed below.
Technological innovation is often the source of significant improvements or points of difference.
Technology often creates the opportunity to deliver new important benefits to customers. However, it is a marketing assessment of the appeal of benefits made possible by technology that determines the value of a technological innovation. Thus, in order to assess the marketing impact of new technology, it is essential to evaluate changes in perceived performance against the expectations and desires of customers. A new computer hard drive that uses the latest components or new technology is not important unless it is more reliable, offers faster retrieval or is more compact and lightweight. The technology that allows for a shampoo and conditioner in one product is important primarily because it saves consumers time when they shower.