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ppeal to a different 'market niche.' Thus, competing companies may attain its market share and charge a price premium through reduced price sensitivity and reduced directness of competition.

On the other hand, new comers aim at existing niche market will inevitably face the established brand identification and customer loyalty. Necessarily, large expenditure is needed to fade the brands in a given segment and build own product image.

The objective of this strategy is to develop a position that potential customers will see as unique. If your target market sees your product as different from the competitors', you will have more flexibility in developing your marketing mix. 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).

In fact, giant international mobile manufacturers have continuously strengthened their technology investment and developed their core technology, in order to establish their leading positions in the mobile handset industry. Motorola, as an example, has been a global leader in innovation in telecommunications. In China, Motorola has invested US$500 million in R&D, building more than 10 R&D centers and labs in Beijing, Tianjin, Shanghai, Nanjing, Chengdu and Hangzhou. The number of R&D staff has surpassed 2500 in 2005. 36

Generally, the major sources of product differentiation are as follows:

Differences in quality or design among output

Ignorance of buyers regarding the essential characteristics and qualities of goods they are purchasing

Pervasive sales promotion activities of sellers and, in particular, advertising

Possibility of developing significant product differentiation through advertising is greatly enhanced for so called “gift goods” or “prestige goods”

Differentiation in the locations of sellers of the same good where the product fills no technical function but rather can satisfy many different sort of personal needs or uses (psychological or physical).

3. Capital requirements

The need to invest large financial resources in order to compete creates a barrier to entry, particularly if the capital is required for unrecoverable expenditures in up-front advertising or R&D. Capital is necessary not only for fixed facilities but also for customer credit, inventories, and absorbing start-up losses. While major corporations have the financial resources to invade almost any industry, the huge capital requirements in certain fields, such as mobile manufacturing, limit the pool of likely entrants.

For example, at the end of 2005, Motorola’s total cumulative investment in China reached US$3.6 billion, making it one of the largest foreign investors in China. Similarly, in 2005, Ericsson further proved its long-term commitment by announcing a USD 1 billion investment for the next five years in China to strengthen its competent capability37. It is arguably that almost all famous foreign mobile compani本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。