What is the term for the strategy of adjusting a product offering to provide superior customer value?

The strategy of adjusting a product offering to provide superior customer value is referred to as differentiation. This approach focuses on creating a product that has unique features or quality that set it apart from competitors, making it more attractive to specific consumer segments. By emphasizing unique attributes or superior performance, companies can command a premium price and foster brand loyalty, as customers perceive additional value in the differentiated product.

Differentiation can involve various aspects, such as innovative design, enhanced functionality, superior customer service, or unique marketing strategies. This allows businesses to cater to specific customer needs and preferences, carving out a niche in the market that is less vulnerable to price competition.

Market segmentation refers to the practice of dividing a broad target market into subsets of consumers with common needs or characteristics, which can indeed help in identifying areas for differentiation but is not itself a strategy for providing superior value. Cost leadership focuses on being the lowest cost producer in the industry, which contrasts with differentiation. Meanwhile, market penetration aims to increase market share within existing markets through aggressive marketing or pricing strategies but does not inherently involve the modification of product features for differentiation.

In summary, differentiation is crucial for creating products perceived as superior by customers, leading to competitive advantages in the marketplace.