Final answer:
Product differentiation is a strategic process used by companies to make their products distinct from competitors', whether through physical attributes, location, intangibles like reputation, or consumer perceptions influenced by advertising.
Step-by-step explanation:
The product differentiation process essentially encourages potential clients or customers of the organization to differentiate the organization's products and services from those of other organizations. Product differentiation can be achieved through various strategies including differences in the physical aspects of the product, the location where it's sold, intangible aspects of the product, and the perceptions held by consumers about the product.
These efforts lead to differentiated products, making them stand out in the marketplace and potentially more desirable to consumers compared to competitors' offerings. Distinctive physical characteristics might include unique design or features, whereas location can play a role if a product is available in a convenient or exclusive area. Intangible differentiation can revolve around promises like satisfaction guarantees or a reputation for high quality.
Additionally, services like free delivery or financial incentives can set a product apart. The final aspect of differentiation often occurs in the minds of buyers, influenced by brand loyalty and advertising, which shapes preferences that may not be tied to the actual quality or function of the product.