How to strategize in order to create a differentiation advantage?

Every firm that decides on which strategy to take in order to create a differentiation advantage should first understand the behavior and preferences of their customers. If a firm offers consumers something that they value that rival firms do not have, then it has a potential differentiation advantage. Consumers are very responsive to how products are distinguishable from each other. A firm may be able to increase its profit if it can consistently convince its consumers that their good is better when compared to other substitutes. This can be done by not only exhausting their resources to make their product distinguishable through packing, branding, distribution or advertising but to improve their product quality and bringing new products in the market.