When you have a parity or commoditised product with little differentiation from competitors, you need a profound understanding of what frustrates customers and what matters to them most before looking for ways to differentiate what you are offering. It’s only through real customer insight into the customer’s behaviour, experiences, beliefs, needs and desires that you can find a point of differentiation.

Customer segmentation is one technique used by marketers to understand their customers better and develop differentiated offers for different segments. This article will focus on more general points of differentiation.

If the makers of bottled water can differentiate a free commodity then it is entirely possible for the manufacturers of Life Science products to do so too.

Here’s a marketing example: a producer of chromatography columns wanted to increase market share. They were targeting biologists in Academia who on occasion express and purify proteins for their research. Through customer interviews they found that these customers don’t do protein purification frequently so they lack in-depth skills and don’t really think about or care what column they use as long as it does what they need. They often choose the wrong column which is frustrating and wastes their precious protein sample and would benefit from selecting the right products for their needs. The opportunity for the company was to position themselves as the experts in protein purification. They wanted to be recognised as the supplier that offers the simplest way to find the right protein separation column that works and if necessary the support to help customers find the right solution. To do this they crafted marketing campaigns around a simple message which was “small things in your protein purification process can have a big impact on your scientific result” and delivered this through a series of educational webinars, product selection guides and customer forums.

To differentiate a parity product marketers need to think broadly.

As E. Raymond Corey put it in 1975 “The ‘product’…is the total package of benefits the customer receives when he or she buys.” ** Added to this, marketers can look at the experience that the customer has when buying from your company and also the product lifecycle to find potential points of differentiation. Here are some of the main ones:

1. Total product:

• Customers have an expectation about what the product will consist of. Do they expect the lab instrument to come with a PC or tablet device, do they expect to buy this separately or do they want a choice? If you’re selling an instrument can you add a useful app or analysis feature? What else can you provide to help customers to use, label, stack, store, transport or dispose of products more easily.

• Brand can help to differentiate your product especially if your marketing reinforces the benefits of the product and how they are aligned with the brand values e.g. reliability or customer service. If customers already have an affinity for the brand this can create favourability towards the product;

• Third party endorsements can reflect positively on the product. For example, being mentioned favourably by a key opinion leader, a regulator or an environmental body can help.

• Don’t forget the packaging. Your product will need to stand out on the shelf. Gibco redesigned their reagent bottles in 2008 to give them a distinctive design that was both ergonomically better but also made them stand out from other reagents.

2. Customer experience

• Adding training and education can distinguish a product if competitors aren’t doing it or are not doing it well. Bundling training with the product is fairly standard these days but how about lifetime training for any new users if a company invests in an expensive piece of lab equipment?

• Service levels are another common way of differentiating a product offer. These can vary from the number of service days included with the purchase to guaranteed response times and even return and replace policies.

• Reagents such as antibodies sometimes have a higher than expected failure rate. Would you consider offering a replacement guarantee?

• Can you offer greater convenience in the way in which the product is purchased (e.g. different channels available), greater ease of use, better responsiveness, longer payment terms, quicker delivery or better stock management? Life Technologies (before they were acquired by Thermo Fisher) pioneered the use of reagent fridges in customers’ labs which were automatically restocked to make it convenient for customers to have what they needed to hand.

3. Product lifecycle

• The customer’s perception of the product doesn’t start or end with the product. Can you manufacture it in a more environmentally friendly way or dispose of it for the customer?

• How about all that packaging that the product comes in? Can you take it away and recycle it?

• What happens to instruments when they are retired? Can they be traded in against new ones even if they are from a different supplier?

A well differentiated product should have greater value in the mind of the customer than it actually costs you to provide.

It’s important to know the cost of any add-ons or services and whether they will produce the expected increase in revenue before offering them to customers.

The key to differentiating a parity product is to make the customer think differently about your product. You might need to act boldly, take a different point of view and stand for something that customers can believe in.

** Key Options in Market Selection and Product Planning, E. Raymond Corey, HBR SEPTEMBER 1975.