How to Tackle Product Differentiation in Modern Manufacturing

Product differentiation in the manufacturing industry is the cornerstone of success. It’s not uncommon for products within the sector to appear homogeneous, even if there are complex differences beneath the surface. The problem manufacturers and marketers face is being able to effectively show and communicate the difference and elevate their products above the rest.

In fact, according to the Content Marketing Institute, 45% of manufacturing marketers struggle with differentiating their products from competitors. Why is product differentiation in a sector built on innovation excellence such a big problem, and how can manufacturers overcome these challenges?

Why is Product Differentiation in Manufacturing a Significant Issue?

There are five main reasons that manufacturing professionals, including marketeers, cite when discussing product differentiation issues:

1. Competitive Pressure and Market Saturation

As of 2023, there are approximately 138,440 manufacturing businesses in the UK (ONS), all competing against each other and on the global stage against manufacturing giants like China, Germany and the US.

In mature manufacturing markets, McKinsey & Company research shows that 48% of companies are struggling with product saturation, making differentiation a decidedly difficult task. In certain manufacturing subsectors, a few leading companies may dominate the market, making it challenging for smaller players to compete - despite product innovation and operational uniqueness.

Furthermore, Brexit has introduced new trade dynamics and regulatory changes that have affected the competitiveness of UK manufacturers in both domestic and international markets.  

With this in mind, it’s no surprise that 61% of manufacturing professionals believe that competitive pressure has increased in recent years (Deloitte), making product differentiation more critical.

2. Customisation Demands and Rising Customer Expectations

Some 72% of manufacturers report experiencing increased demand for customised products (PwC). This can be challenging for manufacturers as it often conflicts with achieving economies of scale - a key consideration in product differentiation that goes hand in hand with increased customer expectations.

According to a Salesforce report, 67% of manufacturers said they feel like customer expectations in relation to product quality and uniqueness have risen significantly in recent years. This is having a knock-on effect of competitiveness and innovation as a whole, forcing manufacturers to re-think not only how they develop products, but how they reimagine their sales and marketing processes to align with new buyer expectations.

3. Product Complexity

With innovation comes enhanced product complexity, which makes product education and marketing more difficult. In fact, 58% of manufacturing professionals consider the increasing complexity of products a major challenge in differentiation (McKinsey & Company).

The complexity in products tends not to come in their appearance but rather in how they work, and being able to accurately and visually depict these operational complexities is where a lot of manufacturing marketers and salespeople fall down. Without being able to easily show how products work underneath, buyers will struggle to discern differences on the surface.

4. Sustainability and ESG Focus

Increasingly, manufacturing companies are facing pressure to incorporate sustainability and environmental, social, and governance (ESG) considerations into their product marketing strategies. This is not only to help reach government-initiated net-zero targets or to appease environmentally conscious buyers, but as a means to position their products and their brand as unique. In fact, 65% of manufacturing companies are focusing on sustainability and environmental considerations as a way to differentiate their products (PwC).

The problem is, as green business practices become the norm in manufacturing, using it as leverage for market differentiation won’t be enough.

5. Marketing Challenges

With all of the above issues combined, it’s no wonder that 38% of manufacturing marketers report finding it difficult to effectively communicate product differentiation in their marketing efforts (Content Marketing Institute).

That being said, product differentiation is only one issue industrial marketers face. According to Brandpoint, 42% of manufacturing marketers say that demonstrating product value is one of the biggest marketing challenges they face, whilst 32% believe that a limited marketing budget is one of the most significant marketing issues. In addition, 49% of industrial marketers say they struggle to create enough high-quality content (Marketing Engineers).

Overcoming Product Differentiation Issues

Showcasing product differentiation comes down to being able to effectively communicate the value of your product in a way that buyers can easily understand and visualise. At present, the reason why so many industrial marketers are struggling to do this is because traditional marketing methods don’t do their products justice.

Videos are an effective tool that almost all leading manufacturers use, but their popularity means they are no longer a differentiator.

With nearly half of industry professionals facing the same problem, MARTECH3D has developed a viable and sustainable solution: using digital twins for sales and marketing within the industrial sector.

Using industry-leading 3D technology, we can create photo-accurate 3D cut-through animations that show the inner workings of your product like never before, allowing buyers to see what truly makes your product different from the competition.

In addition, integrating interactive 3D product demos is an easy and efficient way to target environmentally conscious buyers and engage your audience in a way other companies haven’t thought of. If you’re one of the industrial marketers struggling to create compelling, educational content that demonstrates product value and delivers an exceptional ROI, MARTECH3D can help.

Does 3D Marketing Technology Really Work?

3D technology has been proven to be an effective sales and marketing tool, largely because it aids product education, which ties into differentiation. Here are some of the key ways you can use 3D technology to your advantage:

Improved Learning Retention: Research by the National Training Laboratories suggests that learners tend to remember only about 10% of textual information, 20% of audio information, but approximately 90% of visual information. This indicates that visual aids, such as 3D visualisations, can significantly improve learning retention. When you’re trying to showcase your USPs and separate yourself from the competition, information retention is key.

Enhanced Engagement: According to a report by TechSmith, visual content is more engaging, with 51% of marketers saying that video and other visual content are the most effective ways to capture attention. Whilst static videos can work, interactive 3D animations and videos work better for complex products, and it’s something not many manufacturers are doing at present, meaning you’ll stand out from the crowd by integrating it.

Increased Sales and Conversion Rates: 3D product visualisations can boost sales and conversion rates. According to an Adobe survey, businesses that use augmented reality (AR) and 3D product visualisations experienced a 10% increase in conversion rates. We also know from our own customers that the MARTECH3D platform is a catalyst for ROI. You can read some of our case studies here.

Cost Savings: By providing detailed 3D visualisations, manufacturers can reduce the need for physical prototypes and samples, resulting in cost savings in product development and distribution – especially where customisation is on the rise.

Book a Demo to Learn More

If you’re interested to see how effective our award-winning 3D sales and marketing platform is and how it can revolutionise your ability to differentiate your product in an increasingly competitive manufacturing landscape, speak to us today.

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