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Differentiation and Product Positioning

Chat Session

Differentiation and Product Positioning


Take

a position on one of the following:

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

Differentiation and Product Positioning


Now,

jot down a few talking points Outline that position Then, think about the following:
Is it different than another person who you may have discussed this with? If so, how so and why? If not, how could you make your position different? Make it stand out? Persuade people to take your side?

Differentiation and Product Positioning


Positioning
Was

and differentiating products is similar

Why do you drink the soft drink you do?


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

Why

do you shop at the stores you do?

Branding? Behavior? Buying habits?

Differentiation and Product Positioning


Developing

and communicating a positioning strategy


Positioning is the act of designing the companys offering and image to occupy a distinctive place in the mind of the target market.
What

is a value proposition? Its a cogent reason why the target market should buy the product. Examples? Think about the type of clothing you buy? Whats the companys value proposition? Do you fit the target market? Why? How?

Differentiation and Product Positioning


Four

major positioning errors:

Underpositioning Overpositioning Confused positioning Doubtful positioning


Note:

when a customer has to ask: what do you sell, manufacture, or what is it?its time to create a clear positioning plan.

Differentiation and Product Positioning


Positioning

possibilities:

Attribute positioning (size, number of years in existence) Benefit positioning (the leader in a certain benefit) Use or application positioning (best to use) User positioning (best for user group) Competitor positioning (better than others) Product category positioning (leader in certain product category) Quality or price positioning (best value for the money)

Differentiation and Product Positioning


After

youve determined this strategy, then you have to communicate the companys positioning
A marketing plan should include a positioning statement. TO (TARGET A GROUP OR NEED), OUR (BRAND) is (CONCEPT) THAT (POINT-OFDIFFERENCE).
Examples
Write

your statement for Exact

Differentiation and Product Positioning


Differentiation

What makes you different from your spouse or siblings or friends or colleagues?
To

differentiate is to set a meaningful and valued difference to distinguish you (or a company) from others (or competitors).

Differentiation and Product Positioning


While

all products can be differentaited to some extent, not all brand differences are meaningful or worthwhile. A difference is stronger to the extent that it satisfies the following:
Important Distinctive Superior Pre-emptive Affordable Profitable

Differentiation and Product Positioning


Tools

you can use in differentiation

Boston Consulting Group distinguishes four types of industries based on the number of competitive advantages and their size. Volume industry Stalemated industry Fragmented industry Specialized industry
P.317

Kotler

Differentiation and Product Positioning


Key

to competitive advantage is product differentiation


Products variation by:
Form Features Performance

Quality Conformance Quality Durability Reliability Repairability

Differentiation and Product Positioning


Services

differentiation by:

Ordering ease Delivery Installation Customer training Customer consulting Maintenance and repair Miscellaneous services

Differentiation and Product Positioning


Personnel
6

differentiation

Better training people


characteristics
Competence Credibility Courtesy Reliability Responsiveness Communication

Differentiation and Product Positioning


Channel

differentiation

How companys design their distribution channels coverage, expertise and performance

Differentiation and Product Positioning


Image

differentiation

Buyers respond differently to company and brand images


Identity

is the way that a company aims to identify or position itself or its product Image is the way the public perceives the company or its products
Symbols, colors, slogans, special attributes Physical plant Events and sponsorships Multiple image-building techniques

Differentiation and Product Positioning


Product

life-cycle marketing strategies

Position and differentiation must change as the company and product life-cycle changes Givens:
Products

have a limited life. Product sales pass through distinct stages, posing different challenges, opportunities and problems for seller (think of a house). Profits rise and fall at different stages of product life cycle. Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life-cycle stage.

Differentiation and Product Positioning


Product

life cycle

Introduction: Slow sales growth as product debuts Growth: Rapid market acceptance and substantial profit improvement Maturity: Slowdown in sales growth because product as achieved acceptance Decline: Sales show a downward drift and profits erode

Differentiation and Product Positioning


Style,

fashion and fad life cycles

This is a special cycle


Style:

basic and distinctive mode of expression Fashion: currently acceptable; fashion pass through 4 stages: distinctiveness, emulation, mass-fashion, decline Fads: fashions that come quickly into public view, are adopted with great zeal, peak early and decline fast

Differentiation and Product Positioning

Marketing strategies for each life cycle


Introduction
Pioneer

advantage

Growth
Early

adopters; new competitiors

Maturity
3

phases: growth, stable, decaying maturity


Market modification Product modification Marketing-mix modification

Decline
Some

firm withdraw or die Must find strong reasons for retention Modifications for survival

Differentiation and Product Positioning


Market

evolution

Stages in evolution
Emergence Growth

Maturity
Decline