Graduate Thesis Or Dissertation


Marketing A Horse of A Different Color: The Role of Unique Features and Explanations In Perceived Product Differentiation Public Deposited

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  • Product differentiation has been integral to the understanding of both competitive marketing strategy and consumer welfare. However, despites its ubiquity in theory and practice, product categories are often perceived by consumers to be homogenous and undifferentiated. Additionally, attempts by businesses to create differentiation often fail. I argue that understanding how differentiation is perceived by consumers is vital to understanding why these failures occur, why categories appear undifferentiated, and how to build successful differentiation strategies. In the first chapter, I provide an overview of product differentiation theories and research from both the economics and psychology traditions in marketing, describing the limitations and gaps within the various approaches. In the second chapter, I examine an apparent dilemma faced by marketers. Across a variety of products and categories, features that are more unique (i.e., less common) are also poorly understood by consumers. Thus, the features with the most potential to create differentiation are also the least likely to be perceived as such by consumers. Conversely, the features that are well-understood, and therefore allow a consumer to assess their value, are too common to create differentiation. However, this dilemma can be overcome with mechanistic explanations about how unique, poorly understood features work. In the third chapter, I examine how consumers’ mental representation and comparison processes of products interact with differentiation attempts by multiple competitors. Specifically, I find that an undifferentiated product in a category can nevertheless appear to be highly distinct when multiple competitors are differentiated with poorly understood features. Again, mechanistic explanations help consumers see the true differentiation. Overall, the research highlights the importance of consumer cognition in product differentiation theory. Specifically, utilizing consumers’ propensity to think about the causal connections between products and the benefits they provide allows for better outcomes for both businesses and consumers.

Date Issued
  • 2019-07-29
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  • 2022-12-13
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