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One of the courses that as taught me a great deal during my M.B.A. is the course on Economics. And one phrase I still use today is: 

« All things being equal in all aspects, the predominant factor which will differentiate between two identical products is the price ». 

Such a simple sentence but filled with important information for all involved in selling a product or a service.

One such information is that in the absence of differentiation, the main reason a consumer will choose a product over another is the price. To better illustrate this, let's take two half-crates of tomatoes found in an unspecified farmers' market...

It is 9:00 a.m. and the two stands are next to each other. If the tomatoes are the same quality, same size and same color from one stand to the next, that you are equally well-attended and that all other considerations are identical, you will end up buying the tomatoes costing less.

Now, you might say:

- I know one of the sales people at one of the stand (reputation), the product is differentiated.

- In one of the two stands, they left the tomatoes on the branch (product differentiation), the product is different.

- One of the sales person comes and put the tomatoes basket in the trunk of your car (product differentiation true value added service initiative), both product are no longer identical.

And so on.

What is important to remember is that if you want to reduce your dependency on price, than differentiation is the best way to achieve this goal.

If you have questions or if you would like to find out how does this apply to your business, do not hesitate to contact us.

Looking forward to being part of your success.

Stéphane Elmaleh-Riel, B.Ed., MBA
Marketing consultant

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