Product Differentiation & Positioning

PRODUCT DIFFERENTIATION & POSITIONING

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DIFFERENTIATION The act of designing a set of meaningful differences to distinguish the company’s offering from competitors’ offerings.

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Differentiation Variables

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All products can be differentiated to some extent. But not all brand differences are meaningful or worthwhile. A difference is worth establishing to the extent that it satisfies the following criteria:  Important: The difference delivers a highly valued benefit to a sufficient number of buyers.  Distinctive: The difference is delivered in a distinctive way.  Superior: The difference is superior to other ways of obtaining the benefit.  Preemptive: The difference cannot be copied easily by competitors.  Affordable: The buyer can afford to pay for the difference.  Profitable: The company will find it profitable to introduce the difference.

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Multiple sources of Differentiation Eureka Forbes used personal selling as the sole mean to reach consumers, IBM differentiated along technology, Coke & Pepsi differentiated through brand power, Rolls Royce through superior engineering, DuPont’s leadership in chemical technology etc.

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Tangible Product Attributes  Differentiation Based on Ingredients/formula Example: Close Up Gel Toothpaste, TTK Prestige Teflon, Promise with clove oil, New Ariel Microshine with Carezyme.  Differentiation Based on Functional Value Example: 3M Scotch Magic Tape, Computer controlled fridge  Differentiation based on additional features Example: Aristocrat suitcase with wheels, Dunlop Olympus  Packaging contributing to differentiation Example: Frooti Tetrapack, Harpic Toilet Cleaner  Differentiation through product design Kinetic Honda Electronic Ignition, Titan Watches  Differentiation based on quality Example: Godrej Steel Cupboards

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Intangible Characteristics and Emotional Associations  Jo biwi se kare pyar wo prestige se kaise kare inkar  Reid & Taylor  Rayban

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POSITIONING Southwest Airlines - Low cost carrier Funskool - Safety, variety & education Tata Salt - Iodized salt(1983) - Desk ka namak(2002) Captain Cook (1990) - Free Flowing Peter England - Honest Shirt(1997) - Honestly Impressive(2002) Reid & Taylor (1998) - Luxury Suitings Innova-(Qualis) - Spacious, trendy &Upmarket Pepsodent (1993) - Long lasting protection for hours after brushing-Germ Fighting Property  Woodland - Rugged High Quality Premium Casual Shoe  Vicks - Mothers Love Platform-”Touch Therapy”        

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SURF EXCEL  Dag Ache Hain This campaign has a huge significance It says: It is ok to soil your cloths It is ok to play in the mud It is ok to enjoy life Surf Excel hai na!!!!!!!!!!!!!! 19-10

Define Positioning…. Act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market. “Positioning starts with a product. A piece of merchandise, a service, a company, an institution, or even a person. . . . But positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect.” -Al Ries and Jack Trout

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Developing a positioning strategy  Developing a positioning strategy depends much on how competitors position themselves. Do organisations want to develop ‘a me too’ strategy and position themselves close to their competitors so consumers can make a direct comparison when they purchase?  Or does the organisation want to develop a strategy which positions themselves away from their competitors? Offering a benefit which is superior depends much on the marketing mix strategy the organisation adopts. 19-12

How Many Differences to Promote?

 Each company must decide how many differences (e.g., benefits, features) to promote. Ries and Trout favor one consistent positioning message. With this approach, each brand is touted as “number one” on a particular attribute, such as “best quality,” “best service,” “lowest price,” or “most advanced technology.” If a company hammers away at one positioning and delivers on it, it will probably be best known and recalled for this strength.  Not everyone sticks to single-benefit positioning. Smith Kline Beecham promotes its Aquafresh toothpaste as offering three benefits: anticavity protection, better breath, and whiter teeth. The company’s challenge is to convince consumers that the brand delivers all three. Smith Kline’s solution was to create a toothpaste that squeezes out of the tube in three colors, thus visually confirming the three benefits.

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Six basic strategies for product positioning  By attribute or benefit This is the most frequently used positioning strategy. For a light beer, it might be that it tastes great or that it is less filling. For toothpaste, it might be the mint taste or tartar control. Example: Vediocon Picture-in-picture 19-15

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 By use or application The users of Apple computers can design and use graphics more easily than with Windows or UNIX. Apple positions its computers based on how the computer will be used. Example: Vicks, Rasna 19-17

 By user Facebook is a social networking site used exclusively by college students. Facebook is too cool for MySpace and serves a smaller, more sophisticated cohort. Only college students may participate with their campus e-mail IDs. Example: Raymonds Vijapat inghania 19-18

 By product or service class Margarine competes as an alternative to butter. Margarine is positioned as a lower cost and healthier alternative to butter, while butter provides better taste and wholesome ingredients. Example: Maggie, the two minute noodle Domino’s, A good hot pizza, delivered to your door within 30 minutes of ordering, at a moderate price

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 By competitor BMW and Mercedes often compare themselves to each other segmenting the market to just the crème de la crème of the automobile market. Ford and Chevy need not apply.

Example: If a brand is not number one, then to be successful it somehow must relate itself to the number one brand. Avis tried unsuccessfully for years to win customers, pretending that the number one Hertz did not exist. Finally, it began using the line: "Avis in only No. 2 in rent-a-cars, so why go with us? We try harder." 19-20

 By price or quality Tiffany and Costco both sell diamonds. Tiffany wants us to believe that their diamonds are of the highest quality, while Costco tells us that diamonds are diamonds and that only a chump will pay Tiffany prices. Examle: Karsanbhai Patel’s Nirma 19-21

 Positioning by product class dissociation Example: soft-drink 7-Up, which was No. 3 behind Coke and Pepsi. By relating itself to Coke and Pepsi as the "Uncola", 7-Up was able to establish itself in the mind of the consumer as a desirable alternative to the standard colas.

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Defining Associations Points-of-difference (PODs)  Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand

Points-of-parity (POPs)  Associations that are not necessarily unique to the brand but may be shared with other brands

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Positioning Statement  Also referred to as a brand strategy, positioning strategy, or brand positioning statement, a positioning statement is a succinct description of the core target audience to whom a brand is directed, and a compelling picture of how the marketer wants them to view the brand.  There are four elements or components of a positioning statement: Target Audience - the attitudinal and demographic description of the core prospect to whom the brand is intended to appeal Frame of Reference - the category in which the brand competes Benefit/Point of Difference - the most compelling and motivating benefit that the brand can own in the hearts and minds of consumers relative to the competition Reason to Believe - the proof that the brand delivers what it promises  Template for a Positioning Statement: For (target audience), (brand name) is the (frame of reference) that delivers (benefit/point of difference) because only (brand name) is reason to believe).

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