The　paper　investigates　the　main　causes　of　low　price　competition　between　two　agencies　in　the　differential　model　from　the　perspective　of　quantitative　method　according　to　the　present　vicious　price　competition.　Based　on　the　original　model,　the　influence　of　differentiation　on　the　price　and　market　demand　is　analyzed　with　product　differentiation　implemented　by　one　travel　agency　through　introducing　value-added　services　variables.　The　results　show　that　travel　agencies　can　avoid　low　price　competition　by　product　differentiation　only　when　the　differential　efficiency　is　limited　within　a　certain　range.　Finally,　the　effect　of　the　differential　degree　on　the　differential　efficiency　is　further　researched.　It　is　found　that　the　low　differential　degree　will　lead　to　the　low　differential　efficiency.　Furthermore,　it　will　realize　the　significant　differential　efficiency　when　differentiation　rises　to　some　extent.　©2009　IEEE.