1) Be differentiated
Create a product that meets some need in a way that no one else does. You have to be:
- Some combination of all of the above
2) Be cheap
Be the least expensive option on the market.
This is a kind of differentiation but one that is difficult to maintain because:
- Lots of people know how to do it
- It saps the resources you need to run your business
2.5) Create differentiation where it doesn't really exist
This includes things like:
- Fancy packages
- Clever names
- Massive ad campaigns (ala Cola Wars).
- Rent seeking behaviors
This seems to be a popular option but, when exposed for what it is, I think most people think it smells funny.
Each has it's place and clearly can be successful. I prefer seeking to be differentiated.
Understanding what people really need by looking for the patterns underneath what they say they want is quite interesting sometimes.