Coagro Corp: Horizontal and Vertical Product Differentiation: The Basic Rules

lunes, 24 de julio de 2017

Horizontal and Vertical Product Differentiation: The Basic Rules

The process, to separate and qualify products into one or several categories, is made through differentiation.

Products are completely different depending on the markets. The standards and techniques used to define and group them among their trade business sections vary depending on the individual requirements of consumers, industries, and brokers. For these groups of people, creating standard measures and having a differentiation scale is vital. These generate a pattern of behaviors and balance, assessing the competitive challenge of the products among each other, and ranking them according to certain parameters.

Among these, two main variants are used to qualify and determine the value of certain goods in the market. These are horizontal and vertical product differentiation. The combination of both of these can be used to define the value of a product. Each one of them has individual characteristics that make them ideal for each market, and you, as a business owner, need to understand them to pick which one will be ideal to work with your brand.

Horizontal Differentiation

The horizontal differentiation criterion is used in products that can’t be differentiated per quality, but per individual characteristics that form a general approach to the nature of those elements. This means that the products are often similar in their principal features, but are different in other aspects. Often, in pre-manufactured goods, the colors, physical appearance and size are used to create a differentiation among the elements, while in manufactured goods other aspects are used as criteria for differentiation.

How are products horizontally differentiated?

By size: Big or small, and other physical characteristics.
By color: Depending on the nature of the product.
By percentage: The amount of product per-unit.

Vertical differentiation

This product differentiation is based on a single characteristic of the product and ranks the tested element on a scale from best to worst. The use of this differentiation elements requires critical assessment of the value that defines the rank.

The definition of this method requires that a scale is done according to the requirement of the market. Its aim is the product having an impact on the consumer. The reason for this is that usually the differentiated element is used in the manufacturing process as part of the display of the manufactured good. The indicator along the line of “pure,” “top quality,” “select beans” are examples of how the vertical differentiation is used in the process for the products.

How are products vertically differentiated?

By quality: High, medium and low.
By nature: Organic and mass produced.
By composition: More or fewer ingredients, or percentage of ingredients.

As you can see, both of them involve specific procedures to differentiate the products. Coagro Corp considers all of these characteristics for all the shipments and gives their consumers and business associates opportunities to pick the best alternatives for their respective industries. Contact them through their social media profiles to know more!