Product Differentiation As A Survival Strategy In A Competitive Marketing Environment

Project and Seminar Material for Marketing

Product Differentiation As A Survival Strategy In A Competitive Marketing Environment


The history of marketing revolves around customers or consumer. This denotes that the major reasons why products are produced are because of the consumers who made the production process effective and efficient. Product differentiation is used to separate the choice, test, want needs of the consumers so it become so important that the segmenting differentiating product for easy identification becomes the paramount need in the cosmetic industry. Product differentiation has being found effective in the marketing world/environment because it increase the sale of the product and provide consumers with the required satisfaction they needed. Therefore companies should use the rightful means of communication to ensure that the rightful strategy in differentiating product will be adopted so as to satisfy the yarning of the consumers. Through the process of differentiating product consumers problem will be solved, and the rightful target and objectives including the goal of the company will be achieved and customer’s satisfaction will be attained.

Chapter One

1.0 Introduction

Product differentiation is a strategy and a survival tool for effective penetration in every competitive marketing environment, considering the fact, that product is the main thing that keeps every production company going in every business environment, product has being viewed as the major projector of every companies capacity and capability mostly production companies, so how the product determines how it will survive the competitive environment.

The aim of this chapter will be summarized into three points as thus

First, to define those marketing terms this will be used throughout this research work.

Secondly, to look into the impact of product differentiation as a survival strategy in starline Nigeria limited.

Thirdly, to take a deep look at market segmentation and also to specifically state the fact that the market is heterogeneous.

1.1 Background of Study

The market as some marketers used to think of it, is not a group of homogenous buyers but a group of heterogeneous buyer whose different attitude is in one product for example some women apply cosmetics to draw alteration to themselves while others apply to beautify themselves so the company will tailor her product appeal to satisfy the needs of the fact that the market is always heterogeneous led to the concept of “market segmentation”.

Market segmentation is an establishment and acknowledged techniques for dividing a mass market into identifiable sub-units in order that the individual needs if buyers and potential buyer can be easily satisfied.

It seeks to establish particular group or cluster of buyers.

Market may be served with two different products, which are product standardization and product differentiation. Product standardization is the decision to sell the same type of product to the whole market without considering the heterogeneous nature of the whole market (consumers) of the product. In nutshell product standardization is an efficient method to reduce cost and increase quality by minimizing the differences in your products, you are able to rapidly increase production, streamline distribution, decrease raw material cost and reinforce product branding.

This could be achieve through standardizing the basic component, standardizing the packaging of the product quality

It is the use of one product and four mix for all market segment no attend is made to cultivate various segment of the market place. Product differentiation is the decision to produce two or more types of the same product but differentiate in terms of stage, features, quality, size, price packaging so as to offer variety to the market and distinguish seller products from competitors product. it also take in consideration the heterogeneous nature of the market. Product differentiation allows the firm to promote it product as different in quality than other competing ones and this becomes the edge, which the firm has rather gain than pries product differentiation is seen as that which treat each consumer uniquely as reflected by above definition, product differentiation and standardization are tools of market segmentation.

market segmentation itself can be explained as the identification and dividing a marketing into meaningful groups to buyers who might need separate product an organization that decides to produce goods like cosmetics must recognize that they can neither serve nor appeal to the total market with one product or one marketing mix the idea is born out of the fact that the buyers to numerous, widely spread and different in their purchase behaviour however, this study will research into how effective, efficient product differentiation is employed as a survival strategy in the competitive marketing environment of cosmetic product, how it helps the profitability of the company. Its impact on the market share of the company.

All these with particular reference to starline Nigeria Limited Aba. The company started as a simple proprietorship in mid metamorphosed into starline Nigeria limited. In 1962 founded by Chief (Dr) Peter S. Owuma (Late). Starline Nigeria limited is a market leader in the manufacturing of cosmetics in Nigeria. Over twenty (20) products ranging from, Erato range, ultimate Elope range hair product range, petrosa range, identical range hair product range and so many others are currently in the market and highly differentiated to serve the whole segment of the market and highly basically.

Example, Erato Lotions identified as Erato skin Lintner for fair complexion in order to cover the market segment.

1.2 Statement of Problem

Business fail these days because those responsible for formulating strategies objectives lack the for-sight in identifying the various psychological needs, and differences existing in those markets the company is serving.

Once a product is doing well in the market, the decision markets will assume that they are making 100% profit while having 100% success market opportunity available to them.

Also, due to heavy cost involved in a distinct product from existing once, there is always a problem of additional cost when a firm wants to go into product differentiation.

For any business to succeed, it must have in-depth knowledge of the market it is serving and must be able to move strategies to satisfy the consumer of her product. Among the many strategies that can be used are: After sales services, discount, product modification and product differentiation.

The research work is aimed at suggesting way, a company will lower the cost that scars firms away form product differentiation so as to compete favourably with other products.

1.3 Objectives of Study

The main purpose of this research is to look into the impact of product differentiation as a survival strategy in Star-line Nigeria limited, the purpose of this study include:

  1. Examination of the product differentiation on the competitive trend of Star-line Nigeria ltd.
  2. To determine the impact of product differentiation on the profitability of Star-line Nigeria Ltd.
  3. To determine the role of product differentiation strategies in Star-line Nigeria Ltd.
  4. To identify the problems of differentiation strategies in Star-line Ltd.
  5. To recommend the best approach in applying product differentiation.

1.4 Research Question

For the purpose of the research, the following questions are formulated to assist the researcher identify the importance of product differentiation as a survival strategy in the marketing of Star-line cosmetics.

  1. Is product differentiation being used in Star-line Nigeria Ltd.?
  2. What are the bases of differentiating a product?
  3. Has product differentiation any significant on the market share of Star-line Nigeria Ltd?
  4. Has product differentiation any impact on the market share of Star-line Nigeria Ltd?
  5. What effect does product differentiation have on the profit of Star-line Nigeria Ltd?

1.5 Statement of Hypothesis

Ho: product differentiation has no significant effect on the market share of cosmetic product

Ho2: product dedifferentiation increase the sale of cosmetics product

1.6 Significance of Study

Any company producing highly competitive product need to differentiate her product(s) from that of her competitors as well as to be able to respond well to the challenges of the market place.

On competition, this research work would have shed enough light to the prospects of product differentiation as a survival strategy, this would apart from being useful to students, will also be useful to business owners especially small business owners who will then learn that it pays to differentiate one’s product as this policy will help increase the sales volume, market share and profit.

The government will also benefit from the fruit of this research since the improvement of profit of the firm will then improve nation’s economy which will then be a credit to the government.

1.7 Scope of the Study

Because of the limited time allowed for this research work and the need to produce a valid and relevant result, the work is centered on just one organization-Starline Nigeria Limited Aba, Abia state. The researcher is faced with constrained during the source of materials for this work, the research is expected to attend lectures, write term papers.

1.8 Limitation of the Study

This research work which deals with production differentiation as a survival strategy in a competitive marketing environment-Starline Nigeria Limited was really affected by a lot of constraints.

The major problem encountered was the inability to give adequate co-operation from the staff of the company, this made things difficult for me to get data required in order to make my findings, this really wasted my time during the research work.

Also finance acted as a hindrance during the period of this study, cost of transporting for the number of day this work was carried became a problem to me.

Time factor also contributed as there was time given to carryout the research.

1.9 Definition of Terms

There are some terms that must be defined in project writing so as make the work complete and as well avoid the misconception and this interpretation that may arise

Market Mix:

This consist of four(4) major variables in marketing, it serves as pillars that makes marketing stand well, they are products, place price and promotion. Also called 4P’s and marketing elements.

Product Differentiation:

It is the decision of the management to produce mere types of the same product but differentiated in terms of style, quality, packaging, size and colour.


This refers to skillful plans by marketing practitioners to take advantage of competitors in the market place.

Product Standardization:

It is a tool of market segmentation, which treats the whole market equal by producing the same standard of product for the same (entire) market.


Is the management process for identifying, anticipating and satisfying customer’s requirement profitably.

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to reiterate that the objective of this study was to examine product differentiation as a survival strategy in a competitive market environment.

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given.

In this chapter, certain recommendations are made which in the opinion of the researcher are drawn from the findings of the study.

5.2 Summary

This study was undertaken to examine product differentiation as a survival strategy in a competitive market environment. The study opened with chapter one where the statement of the problem was clearly defined. The study objectives and research hypotheses were defined and formulated respectively. The study reviewed related and relevant literatures. The chapter two gave the conceptual framework, empirical and theoretical studies. The third chapter described the methodology employed by the researcher in collecting both the primary and the secondary data. The research method employed here is the descriptive survey method. The study analyzed and presented the data collected in tables and tested the hypotheses using the chi-square statistical tool. While the fifth chapter gives the study summary and conclusion.

5.3 Conclusion

In conclusion, from the research study, it can be established that however little the significance product differentiation holds in relation with healthy competitive market, the fact remains that there is a positive relationship between the variables. This means that manufacturing organizations must pay greater attention to the products the manufacture in terms of quality design, innovations and unique features. Finally, firms in the manufacturing sector face domestic and international competition in addition to rapid shifts in customer demands whereby many manufacturing firms have come to realize that to remain viable, a strategy of product differentiation may be a more viable option than strategies based on efficiency and price (Spencer, Joiner and Salmon 2009). This research study further demonstrates that product differentiation could be used as a tool for achieving competitive advantage and enhancing greater organizational performance.

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