Competitive differentiation is a strategic positioning tactic an organization can undertake to set its products, services and brands apart from those of its competitors.
In order to make an offering compelling in the marketplace, an organization must clearly articulate to consumers the benefits of a product, service or brand and contrast its unique qualities with other competing products. The goal of competitive differentiation is to have the customer perceive an organization's offering as being superior when compared to other similar offerings.
Differentiation can be achieved through packaging, marketing campaigns and after-market product support. Startup companies often develop products or services in niche markets in order to competitively differentiate themselves around a specific consumer need. A positioning statement can provide a basis for competitive differentiation, defining specific advantages a particular offering provides.
See also: unique selling point