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Use Product Differentiation for Good, Not for Evil

Written by William G Handlos, P.E.

Product differentiation is often thought of as a way to create a competitive advantage. Typically, a company decides to focus and promote upon a certain attribute(s) of a product making this attribute a key feature of their value proposition statement.

For example, a major automobile company might focus and promote a rear lift gate automatic opener actuated by the movement of the driver’s foot under the rear bumper. This inexpensive addition to an SUV’s feature set may be the difference in a buying decision between competing automobile brands, particularly in a market with fierce competition and similar option sets.  In this case, the manufacturer has created a product differentiator that truly adds benefit to the customer.

Product Differentiation is important during the buying cycle

Presto Geosystems® developed the original geocell in the late 1970s and GEOWEB® Geocell product enhancements have been developed every few years, always with the intent of offering benefits to their customers with each refinement.

For manufacturers who sell to contractors who bid on projects that are based upon engineered plans and specifications, the waters can be murkier. Is product differentiation created for the benefit of the customer or is differentiation simply crafted to create a unique set of specification characteristics for which other competing manufacturers cannot deliver?

Not all product differentiation poses consumer benefits

Presto developed the textured strip, perforated wall, use of tendons for slope applications, stacked Earth wall retention systems, the ATRA® Stake Clip used over rebar, the ATRA® GFRP Stake, the ATRA® Driver system for installing stakes quickly, the ATRA® Tendon Clip, and the ATRA® Key for quick, stronger geocell connections. Each of these enhancements added to the value proposition and improved the product strength, installation speed, durability or product performance to the customer. These are all examples of product differentiation used for the good of the project and the customer.

This history of product differentiation puts pressure on fast follower geocell providers and those manufacturers typically have only one arrow in their quiver, and that is price. Clearly, supplying only geocell, without the benefit of features or accessories, is less expensive… but provides an incomplete solution and delivers no differentiation.

Enter stage right the appearance of artificial differentiation. Geocell has been manufactured in 3, 4, 6, 8 and 12 inch depths and in 3 standard cell sizes for over 30 years by a multitude of manufacturers. These standards benefit the industry because specifications built on these standards allow competitive bids by multiple manufacturers. Faced with mounting market share loss, a few manufacturers have turned to creating differentiation that brings no value to the customer.

Sometimes the road less traveled is not a good thing

An example of this is the recent offering of nonstandard depth geocell. From a design perspective, there is very little to be gained by this offering. This effort is solely driven by the desire to create a specification for a product that is not offered by other companies and for which there would be no bidding competition. Differentiation? Yes. Value to the customer? Negligible.

Distinction Without a Difference

When a manufacturer offers a differentiation without substantiated benefit, it is a merely a differentiation tactic to gain advantage – a tactic that is not only potentially harmful to the customers’ project, but also the industry.

Specifying engineers would be best served by avoiding meaningless distinctions and better served by specifying products   that deliver differentiation that is intended to benefit the customer and the project.