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|Most modern markets are characterized by product differentiation. For example Cheap Paris Saint-Germain Jerseys , there is no one identical type of car, perfume, radio station or hotel. Product differentiation can be viewed as the ability of producers to differentiate close substitutes, so that customers no longer regard them as similar products. This differentiation can occur by changing the physical attributes of a product or service. Alternatively, differentiation can take place in a psychological sense.
• Brands and trademarks can be exploited to differentiate similar products. Trademarks are normally words or symbols used by producers to denote particular brands. In many cases, firms which own trademarks have obtained exclusive property rights to exploit these. Examples are the Lacoste crocodile and the Armani eagle. This gives the firm some degree of monopoly power by reducing the number of substitutes and hence lowering consumers’ price elasticity of demand for the product in question. Brands and trademarks can sometimes become synonymous with the products they are associated with (e.g. Hoover and vacuum cleaner). If this occurs the firm may lose its trademark protection.
• Community or national differences. In this case, the country or community of origin is the defining factor that differentiates goods and services. Products and services from different parts of the world are often deemed to be different and of higher quality – for example, Jersey cream made in Jersey, Devon custard, Russia vodka, Scottish whisky, Irish stout, Swiss watches and Italian clothes. Domestic producers can exploit such differences, for example by putting an Italian flag on a packet of pasta or giving clothes an Italian sounding name.
• Customer wants. Consumers have different characteristics, tastes and preferences. As a consequence, the type of product demanded varies from consumer to consumer. Differentiation by producers to meet these varied wants is often of a horizontal type – for example Cheap Real Madrid Jerseys , color of cars and size of clothes.
• Geographical variations. The location of a producer can often differentiate a product or service for example, the ease with which a shop or factory can be reached by consumers, as is the case when consumers make choices between the corner shop and the out-of-town superstore. It is also often the case that identical houses are differentiated by which part of the country they are located in. For example, London has traditionally been deemed a more desirable place in which to buy property than other parts of the United Kingdom.
• Ignorance on the part of consumers can allow firms to exaggerate the degree of differentiation of their products and services. If consumer ignorance is present, producers may suggest that high prices reflect higher quality.
• New technology can also be used to differentiate a product – for example, the addition of Internet and e-mail features on a mobile telephone.
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