The Effect of Product Differentiation on Competitive Advantage Mediated by Brand Image: An Empirical Study on Residential Real-estate Business in Addis Ababa

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Addis Ababa University


This research is an empirical study of these companies' product differentiation and competitive advantage strategy and how they apply differentiation to their marketing strategies to use it as a competitive advantage. Most companies do not consider differentiation a competitive tool, especially the four components( Product quality, Product design, Product innovation, and Product feature ); these components are the main focus of this study. It describes the direct and indirect effect (through the mediating variable Brand Image) of these components on competitive advantage. The researcher used multiples regression analysis to analyze and interpret the relationship between the dependent and independent variables using the SPSS version 25 software. Meanwhile, the indirect effect of the independent variables or the mediation test was conducted using the Smartpls software. The study was able to identify that the independent variables have a positively strong effect on the dependent variable except for product quality which showed a positive but slightly weak effect. The mediating variable brand image has the most significant effect on competitive advantage.



Product Differentiation, competitive advantage, product quality