Thursday, January 28, 2010

Product Differentiation

Product Differentiation is the act of distinguishing a market offering to make it more attractive to a particular target market or markets.

When you think about differentiation, you don't often think of Mcdonald's. They have established themselves globally as a brand that is universally the same everywhere. Their products are so similar throughout the globe that economists even use the price of their Big Mac as a measure to study whether the law of one price holds across different countries. What you might not know is that even massively hegemonic corporations still have to practice differentiation in one way or another in order to break into foreign markets and new market segments.

In the US McDonald's sells familiarity, and their list of products invoke what many Americans would call familiar American foods. Here are some examples of other products Mcdonald's offers:

Take for instance the McRice in Indonesia. It is sold in a restaurants there because the Indonesian market demands that some form of their staple food be present at every meal.

In parts of Europe and Asia McBeers are sold as it is both culturally acceptable and part of their standard restaurant experience.

Even in the US, McDonald's has undergone small ammounts of product differntiation. In parts of New England, Mcdonald's offers the Mclobster. This is due to the availability of fresh ingredients and that it helps them compete with cheap seafood restaurants in the area.

As you can see, even industry behemoths can benefit from product differentiation and it might even be necessary for them to gain access to certain market segments. This example proves that even as the most singular and undifferentiated firms continue their trends of globalization, product differentiation becomes necessary for them to achieve their goal of global dominance.

Wyatt Bricca
Section E

1 comment:

  1. This is very interesting! I knew that McDonald's have slight different Menus in Japan such as teriyaki burger and shrimp burgers etc... But I never actually thought about the products at other countries. Unfortunately, I didn't see very different products at McDonald's I visited in Milan and Paris but I sure want to try out some of those menus. I think this example can be also used for target marketing - local marketing since McDonald's is serving in different style in different locality!

    Shogo Okuda
    Section G