differentiation and product positioning

Differentiation and Differentiation and Product PositioningProduct Positioning

Chat SessionChat Session

Differentiation and Product Differentiation and Product PositioningPositioning

►Take a position on one of the Take a position on one of the following:following:

Your political candidate for Election 2008Your political candidate for Election 2008 The War on TerrorThe War on Terror Getting a college education Getting a college education The brand of ketchup you buyThe brand of ketchup you buy Child-rearing in the year 2008Child-rearing in the year 2008


►Now, jot down a few “talking points”Now, jot down a few “talking points”►Outline that positionOutline that position►Then, think about the following:Then, think about the following:

Is it different than another person who Is it different than another person who you may have discussed this with? If so, you may have discussed this with? If so, how so and why?how so and why?

If not, how could you make your position If not, how could you make your position different? Make it stand out? Persuade different? Make it stand out? Persuade people to take your side?people to take your side?


► Positioning and differentiating products is Positioning and differentiating products is similarsimilar Why do you drink the soft drink you do?Why do you drink the soft drink you do?

►Was it the advertising?Was it the advertising?►Was it the taste?Was it the taste?►Was it the marketing, the public relations?Was it the marketing, the public relations?►Other?Other?

►Why do you shop at the stores you do?Why do you shop at the stores you do? Branding?Branding? Behavior?Behavior? Buying habits?Buying habits?


►Developing and communicating a Developing and communicating a positioning strategypositioning strategy Positioning is the act of designing the Positioning is the act of designing the

company’s offering and image to occupy a company’s offering and image to occupy a distinctive place in the mind of the target distinctive place in the mind of the target market.market.►What is a value proposition? It’s a cogent What is a value proposition? It’s a cogent

reason why the target market should buy the reason why the target market should buy the product.product.

►Examples? Think about the type of clothing you Examples? Think about the type of clothing you buy? What’s the company’s value proposition? buy? What’s the company’s value proposition? Do you fit the target market? Why? How?Do you fit the target market? Why? How?


►Four major positioning errors:Four major positioning errors: UnderpositioningUnderpositioning OverpositioningOverpositioning Confused positioningConfused positioning Doubtful positioningDoubtful positioning

►Note: when a customer has to ask: “what do Note: when a customer has to ask: “what do you sell, manufacture, or what is it?—it’s time you sell, manufacture, or what is it?—it’s time to create a clear positioning plan.to create a clear positioning plan.


► Positioning possibilities:Positioning possibilities: Attribute positioning (size, number of years in Attribute positioning (size, number of years in

existence)existence) Benefit positioning (the leader in a certain benefit)Benefit positioning (the leader in a certain benefit) Use or application positioning (best to use)Use or application positioning (best to use) User positioning (best for user group)User positioning (best for user group) Competitor positioning (better than others)Competitor positioning (better than others) Product category positioning (leader in certain Product category positioning (leader in certain

product category)product category) Quality or price positioning (best value for the Quality or price positioning (best value for the

money)money)


►After you’ve determined this strategy, After you’ve determined this strategy, then you have to communicate the then you have to communicate the company’s positioningcompany’s positioning A marketing plan should include a A marketing plan should include a

positioning statement. TO (TARGET A positioning statement. TO (TARGET A GROUP OR NEED), OUR (BRAND) is GROUP OR NEED), OUR (BRAND) is (CONCEPT) THAT (POINT-OF-DIFFERENCE).(CONCEPT) THAT (POINT-OF-DIFFERENCE).►ExamplesExamples►Write your statement for ExactWrite your statement for Exact


►DifferentiationDifferentiation What makes you different from your What makes you different from your

spouse or siblings or friends or spouse or siblings or friends or colleagues?colleagues?►To differentiate is to set a meaningful and To differentiate is to set a meaningful and

valued difference to distinguish you (or a valued difference to distinguish you (or a company) from others (or competitors).company) from others (or competitors).


►While all products can be differentaited to While all products can be differentaited to some extent, not all brand differences are some extent, not all brand differences are meaningful or worthwhile. A difference is meaningful or worthwhile. A difference is stronger to the extent that it satisfies the stronger to the extent that it satisfies the following:following: ImportantImportant DistinctiveDistinctive SuperiorSuperior Pre-emptivePre-emptive AffordableAffordable ProfitableProfitable


►Tools you can use in differentiationTools you can use in differentiation Boston Consulting Group distinguishes four Boston Consulting Group distinguishes four

types of industries based on the number of types of industries based on the number of competitive advantages and their size.competitive advantages and their size.

Volume industryVolume industry Stalemated industryStalemated industry Fragmented industryFragmented industry Specialized industrySpecialized industry

►P.317 KotlerP.317 Kotler


►Key to competitive advantage is Key to competitive advantage is product differentiationproduct differentiation Products variation by:Products variation by:

►FormForm►FeaturesFeatures►Performance QualityPerformance Quality►Conformance QualityConformance Quality►DurabilityDurability►ReliabilityReliability►RepairabilityRepairability


►Services differentiation by:Services differentiation by: Ordering easeOrdering ease DeliveryDelivery InstallationInstallation Customer trainingCustomer training Customer consultingCustomer consulting Maintenance and repairMaintenance and repair Miscellaneous servicesMiscellaneous services


►Personnel differentiationPersonnel differentiation Better training people…Better training people…

►6 characteristics6 characteristics CompetenceCompetence CredibilityCredibility CourtesyCourtesy ReliabilityReliability ResponsivenessResponsiveness CommunicationCommunication


►Channel differentiationChannel differentiation How company’s design their distribution How company’s design their distribution

channels’ coverage, expertise and channels’ coverage, expertise and performanceperformance


► Image differentiationImage differentiation Buyers respond differently to company Buyers respond differently to company

and brand imagesand brand images►Identity is the way that a company aims to Identity is the way that a company aims to

identify or position itself or its productidentify or position itself or its product►Image is the way the public perceives the Image is the way the public perceives the

company or its productscompany or its products Symbols, colors, slogans, special attributesSymbols, colors, slogans, special attributes Physical plantPhysical plant Events and sponsorshipsEvents and sponsorships Multiple image-building techniquesMultiple image-building techniques


► Product life-cycle marketing strategiesProduct life-cycle marketing strategies Position and differentiation must change as the Position and differentiation must change as the

company and product life-cycle changescompany and product life-cycle changes Givens:Givens:

►Products have a limited life.Products have a limited life.►Product sales pass through distinct stages, posing Product sales pass through distinct stages, posing

different challenges, opportunities and problems for seller different challenges, opportunities and problems for seller (think of a house).(think of a house).

►Profits rise and fall at different stages of product life Profits rise and fall at different stages of product life cycle.cycle.

►Products require different marketing, financial, Products require different marketing, financial, manufacturing, purchasing, and human resource manufacturing, purchasing, and human resource strategies in each life-cycle stage.strategies in each life-cycle stage.


►Product life cycleProduct life cycle Introduction: Slow sales growth as product Introduction: Slow sales growth as product

debutsdebuts Growth: Rapid market acceptance and Growth: Rapid market acceptance and

substantial profit improvementsubstantial profit improvement Maturity: Slowdown in sales growth Maturity: Slowdown in sales growth

because product as achieved acceptancebecause product as achieved acceptance Decline: Sales show a downward drift and Decline: Sales show a downward drift and

profits erodeprofits erode


►Style, fashion and fad life cyclesStyle, fashion and fad life cycles This is a special cycleThis is a special cycle

►Style: basic and distinctive mode of expressionStyle: basic and distinctive mode of expression►Fashion: currently acceptable; fashion pass Fashion: currently acceptable; fashion pass

through 4 stages: distinctiveness, emulation, through 4 stages: distinctiveness, emulation, mass-fashion, declinemass-fashion, decline

►Fads: fashions that come quickly into public Fads: fashions that come quickly into public view, are adopted with great zeal, peak early view, are adopted with great zeal, peak early and decline fastand decline fast


► Marketing strategies for each life cycleMarketing strategies for each life cycle IntroductionIntroduction

► Pioneer advantagePioneer advantage GrowthGrowth

► Early adopters; new competitiorsEarly adopters; new competitiors MaturityMaturity

► 3 phases: growth, stable, decaying maturity3 phases: growth, stable, decaying maturity Market modificationMarket modification Product modificationProduct modification Marketing-mix modificationMarketing-mix modification

DeclineDecline► Some firm withdraw or dieSome firm withdraw or die► Must find strong reasons for retentionMust find strong reasons for retention► Modifications for survivalModifications for survival


►Market evolutionMarket evolution Stages in evolutionStages in evolution

►EmergenceEmergence►GrowthGrowth►MaturityMaturity►DeclineDecline