Directorate of distance education

Consumers skills 
in evaluating goods across versions and prices 
are nurtured by a sufficiently rich environment of social interaction and 
product differentiation. In particular, in contrast to neoclassical claims 
that “preferences are given”, tastes evolve over time due to experiences 
(both personal and indirect, e.g. by looking at others).
Personal experience can be a process leading to getting to like 
certain previously unacceptable versions, as the following instruction by 
the producer of a high cocoa percentage chocolate.
Another important dimension of consumer behaviour that is 
influenced by the width of product differentiation is the 
time length of 
search
for the purchase, that can be increased if differentiation is wider 
and opaque (e.g. requires visits to many points-of-sale, hidden features, 
etc.).
Long-Term Trends
The ever growing product differentiation process due to new 
emergent firms/countries and the innovation efforts of incumbents has 
encountered in the last decades some form of brake due to the pressure of 
globalized, standardized homogeneous goods
with a dominant design.
Behaviour During the Industry Life-Cycle
High product differentiation with radically different proposals is 
typical of the early stage of an infant industry, until a dominant design will 
replace technically imperfect or simply unlucky models. 
Afterwards, when the industry reaches the maturity stage with few 
main competitors, differentiation re-emerge (often due to minor external 

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changes) as an attempt to soften price competition and to reach new 
niches of consumers.
Policies
Most experimentation with product differentiation is spontaneous 
in the market economy. However, there may be specific features of 
products that touch the public interest. For instance the safety of product 
can be forced to be high by the policymaker, to avoid cheap and dangerous 
versions be offered to customers. 
For the transition to a low-carbon economy, standards of