Leaving Idaho, we headed southwest on US 395 through the Palouse region of eastern Washington. Rolling hills— coated with, as the song goes, amber waves of grain— stretched to the horizon, and we watched as giant combines kicked clouds of dust into the blue late-summer sky. As a result, Scott’s Volvo was pretty dirty by the time we got to the Tri-Cities; the outside, that is, since Mike had long since picked every Cheerio out of the rear seat. We checked into the Cedar Inn and Suites in Kennewick, which was precisely the sort of brand-new, charmless, and completely sterile motel that Scott loves best.

The Ice Harbor Brewery, advertising good beer, fried food, and a nice setting on the Columbia River, was our dinnertime destination, and we hopped back in the car for what we thought would be a short drive to the restaurant. Shockingly, the GPS on Paul’s phone malfunctioned (again!), and we ended up taking an indirect route on a narrow road through a riverside park. There, to our amazement, we encountered a massive traffic jam: ten cars at a dead stop in front of us, and nobody moving. Scott felt a pang of hunger, and immediately regretted not having grabbed an extra cookie at Community 1st Bank back in Idaho.

Mike and Paul stepped out of the car to investigate, but returned to find Scott in a full-on hunger meltdown. Accusations began to fly: Incompetent navigation! Lodging with malicious intent! Not my fault! Blame my kid! Geese!

What? Yes, Mike and Paul had found the cause of our roadblock. A massive gaggle, led by a gander Moses parting a Red Sea of cars, was crossing the road ahead. Scott dropped his combative posture, and we quickly joined every other motorist in our traffic jam to watch and photograph. Eventually, the geese cleared and, after a beer or two, so did the air between us.

The next morning we were right back to interesting lessons in product differentiation. Designing a company’s products or services to appeal to a particular set of customers can yield big rewards. As the design features become more and more specific to the needs of individual consumers, products may even become customized. This was the approach adopted by TiLite, a manufacturer of “Complex Rehab Manual Wheelchairs” we visited in neighboring Pasco.

The “Ti” in TiLite refers to titanium, the strong corrosion-resistant metal that is used to make the company’s wheelchairs. We spoke to Rick Forman and Josh Anderson from TiLite seated around a long table in the company’s conference room, which was decorated with posters of championship wheelchair athletes. We began by asking how the company ended up on the arid plains of southeastern Washington.

“It actually goes all the way back to the Manhattan Project,” Rick began, giving us a dose of American history along with the company’s background.

“How much time do you have?” chimed in Josh with an eye-roll, as if he’d heard Rick tell the long version of this story before.

The Hanford Nuclear Site, which manufactured the plutonium used in the first atomic bomb, was located nearby. TiLite was a spin-off of a Swedish manufacturer of titanium tubes that were used in the plutonium manufacturing facility. As the nuclear industry waned in the 1970s and 1980s, the company searched for other applications for the metal and eventually understood its potential for wheelchairs.

“Titanium has the highest strength-to-weight ratio,” Rick explained. “So you can make a much thinner-walled tube.”
“There are lots of reasons why a user would prefer a titanium wheelchair,” Josh went on. “The primary reason is that titanium is a vibration-dampening material. If you’re spending sixteen hours in the chair every day, that comfort level is huge.”

Josh spoke about the virtues of the chair from experience, as he himself is a user of the product. “I had a spinal cord injury when I was fourteen years old, so I have been using this technology for twenty-six years. I have seen it develop and I like to be a part of that development.”

In addition to the strength and vibration-dampening properties, titanium has excellent shape-manipulation ability. This allows for TiLite’s main user-oriented feature: customization. Manual wheelchairs are manufactured for independent users who self-propel rather than being pushed in their chairs. For manual users, mobility is enhanced substantially by having a wheelchair built specifically to the size and shape of their bodies and the challenges associated with their injuries.

“For each one of our chairs we have a very detailed order form, where we specifically ask you every measurement that we need. We define every option that is available because we make every wheelchair for a specific individual. We offer fifty different rear-wheel options— our competitors generally offer around twenty.”

This comparison began to get to the heart of the differentiation advantage that customization generates for TiLite. Because of all the available configurations permitted by the shape-shifting metal— billions of potential combinations, Rick noted proudly— the more standardized products offered by competitors can’t possibly be as attractive for any individual user.
“One of the measurements is seat height— front seat height and rear seat height. And then there’s frame angle, the angle of that knee bend in the wheelchair. We give you four or five choices on that. Depending on what your front and rear seat height are, as you tilt one, the other changes.”
“We do that; they don’t,” Rick summed up. “The competition doesn’t, and whatever seat height you choose, your angle is going to be off— that’s too bad.”
“Our product is by far more custom than anyone else’s,” echoed Josh. “You couldn’t take my chair [Josh measured more than six foot four from head to toe] if you needed one. If we just gave you my chair, it wouldn’t work for you. It would be no different than your getting one of these four-hundred-dollar, low-end chairs.” TiLite’s chairs could be priced three times higher or more, depending on the customized options the user selects.

In hearing these descriptions of the product, there was no doubt in our minds that having a customized wheelchair would be superior from a user’s perspective. For TiLite to have a successful business, however, they need to do more than just provide a better solution— the costs of providing the solution must be less than the revenue that they can generate from the customers. So a risk of a differentiation or customization strategy is that is becomes too costly to provide that unique targeted product.

“It is more expensive,” Josh admitted, “but we really fine-tune our manufacturing processes so that we can limit that. Because of the initial material that we’ve started with— the titanium— we’ve streamlined our process around building custom.”

Since the costs of custom manufacturing are higher, this extreme differentiation strategy will work only if appreciation of a customized product translates into users who are willing to pay higher prices. TiLite is at the top of a stratified market, and both public and private insurance providers need to be convinced that the added functionality compared to a standardized product is worth the higher price tag. When users can be more self-sufficient in their TiLite wheelchairs, that helps make the argument.

We thanked Josh and Rick as they showed us to the door and then strolled out to the car. We had seen many good examples of product-differentiation strategies, so the conversation naturally turned in that direction. “Didn’t you write your PhD dissertation on product differentiation?” Paul asked Mike.

“Yeah, it was a study of motels,” he replied. “I looked at rural interstate exits and examined how new entrants try to differentiate from the established players.”

“Do you think your analysis can explain the Flamingo Motel?” Scott asked.

Paul rolled his eyes as Mike thought for a moment. “I can’t think of a rational explanation for that.” Learn more about balancing the benefits of customization with the costs only at the University Canada West.