For marketers, product differentiation offers a competitive advantage over other substitute products or services.

Products stand out to consumers in the various ways listed below

For example, cars all have similar functions, but each company emphasizes a different characteristic. 

Let’s break down Tesla using the model above. 

  • Pricing: High-end pricing allows users to view this product as a luxury good.
  • Quality: As a battery-operated vehicle with innovative technology, Tesla assumes the role of a high-quality car.
  • Design: Tesla’s cars are designed differently with a sleek exterior.  
  • Features: This self-driving car with an endless list of features makes this product different from others.
  • Service: Remote diagnostics, mobile service, and minimal maintenance allow Tesla to be unlike other models.
  • Customization: Tailor your Tesla to your needs to give your car a unique experience.

As you can see, Tesla is a prime example of product differentiation.