Discovering the new points of

DifferentiationBy

Ian C. MacMillan &

Rita Gunther McGrath

Presented by P. Parijatha

ReddyT21033

Ian C. MacMillan

Professor of Entrepreneurial Studies

and a professor of management at the

University of Pennsylvania’s Wharton School in Philadelphia.Rita Gunther McGrath

Assistant professor in the Management of

Organizations Division of Columbia University’s

Graduate School of Business in New York City.

About authors

What is Differentiation?

• Strategy to achieve a competitive advantage over competitors

• Process of adding meaningful and valued differences to distinguish the company’s offering from the competition.

Examining customers’ entire experience with a product or service (Consumption chain)

Uncovers opportunities to position the offerings in ways that neither companies themself nor

their competitors thought possible.

Basic idea of the article

What is this consumption chain?

“Open up your thinking to your customer's entire

experience with your product or service”

• Moment customers realize that they need a product or service to the time when they no longer want it and decide to dispose of it.

• Customers entire experience with product or service

1. How do people become aware of their need for your product and service?2. How do consumers make their final selection?3. How do consumers order and purchase your product or service?4. What happens when your product or service is delivered?5. How is your product or service paid for?6. How is your product stored?

Set of questions to help identify new, consumer-based points of differentiation.

Cont..

7. How is your product moved around?8. What is the consumer really using your product for?9. What do consumers need help with, when they use your product?10. What about returns or exchanges?11. What happens when your product is disposed of or no longer used?

1. How do people become aware of their need for your product and service?

Are customers aware that You can satisfy their need? They even had a need that can be

satisfied by you?

Examples:

2. How do consumers make their final selection?

Can you make Selection process More comfortable? Less irritating? More convenient?

Targeted the households Decision making influencers• “By a Preethi I

guarantee”

Targeted selection experience as their competitive focus

3. How do consumers order and purchase your product or service?Can a company can differentiate itself by making the process of ordering and purchasing more convenient ?

Simplification of ordering and restocking process

Net booking of tickets along with home delivery

4. What happens when your product or service is delivered?

What has to happen from the time a company delivers a product to the time consumer actually uses it ?

Recording and settling the case of the policy holders on spot.

Insurance company in

Cleveland Ohio

5. How is your product installed?

• Particularly relevant for companies with complex products

Compaq Computer

offers its customers a poster that clearly illustrates the ten installation steps.

6. How is your product or service paid for?

• Addressing difficulties in payment policies and differentiating from competitors

Hygrevar Home & Hearth, a leading Madras-based real estate brand

It not only sell the property but also help their customers get a

home loan

7. How is your product stored?

Expensive, inconvenient, or downright dangerous for customers to have a product simply sitting around, the opportunities for differentiation abound.

Redesigned its pack to make it stand up on its

lid

8. How is your product moved around?

• Whether the Transportation is across a room or across a state or..

• Often-overlooked opportunity for differentiation

9. What is the consumer really using your product for?

• Finding better ways for customers to use a product or service is a powerful differentiator

Refrigerator

deodorant

10. What about returns or exchanges?

• Handling things well when the product doesn't work out can be as powerful as meeting the need that motivated the initial purchase.

no-questions-asked return policy

Nordstrom

11. What happens when your product is disposed of or no longer used?

• What do customers do with the obsolete goods?

Apparel manufacturers

Disposal of the old dresses

• ‘Gift your old pair of jeans and get Rs.250 off on our new one.

• Your old jean would be donated to XXX charity.’

Analyzing the customers experience:

Applying 5 simple questions at each link in the chain• What?• Where?• Who?• When?• How?

Conclusion:

• Goal is to assemble an inventory of possible points of differentiation.

• Finding ways to differentiate ones company doesn’t have to be an act of genius.

• It is the skill that can be developed and nurtured.