<P> The objective of differentiation is to develop a position that potential customers see as unique . The term is used frequently when dealing with freemium business models, in which businesses market a free and paid version of a given product . Given they target the same group of customers, it is imperative that free and paid versions be effectively differentiated . </P> <P> Differentiation primarily affects performance through reducing directness of competition: As the product becomes more different, categorization becomes more difficult and hence draws fewer comparisons with its competition . A successful product differentiation strategy will move your product from competing based primarily on price to competing on non-price factors (such as product characteristics, distribution strategy, or promotional variables). </P> <P> Most people would say that the implication of differentiation is the possibility of charging a price premium; however, this is a gross simplification . If customers value the firm's offer, they will be less sensitive to aspects of competing offers; price may not be one of these aspects . Differentiation makes customers in a given segment have a lower sensitivity to other features (non-price) of the product . </P>

When would a firm consider deleting a product