Can either make their product at or near industry pricing averages and reap superior profit
They can reduce prices to levels that cannot be matched by rivals over the long term.
To gain a differentiated position in the rightmost quadrants, a company must examine the value chain
to determine where and how it can emphasize uniqueness and add value.
Differentiation comes at a cost; therefore, a company must offer differentiated benefits only where a
substantial amount of customers are willing to pay a significant premium for a unique product.
A company can examine the entire value chain to find tangible and intangible benefits that appeal to
both emotion and practicability:
Tangible benefits can be created by melding superior engineering, top quality materials, and for
exacting manufacturing into a high-performance equipment.
Intangible benefits that customers crave can be created via exclusivity, brand mystique, and
"high-sheen, high-service" selling environments.
The tangible aspects include all observable product characteristics, such as size, color, and materials
under to make product, packaging, and complementary services.
The intangible aspects include unobservable and subjective qualities - image, status, exclusivity, and
The total value is created by the entire relationship a firm has with the customer.
Segmenting the Market: