Differentiating & Positioning

Chapter 9
Differentiation
“Differentiation is the act of
designing a set of meaningful
differences to distinguish the
company’s offerings from
competitors offerings”.
Mango
Juice
Mango
Juice
Differentiation opportunities &
type of industry
 Volume Industry
Few but large competitive advantage
 Stalemated Industry
Few and small competitive advantage
Example Steel industry
Hiring better sales people profitability
and market share can be increased
Differentiation opportunities &
type of industry
 Fragmented Industry
More opportunities of differentiation small
advantage gained example Restaurant
 Specialized Industry
Many opportunities of differentiation big
pay off i.e advantage gained example
Garment Industry
Maneuverability possible in 5
dimensions

1) Target Market
2) Product
3) Place
4) Promotion
5) Price
Developing Positioning
Strategy
 Numerous ways to differentiate
products but all are not worth while.
 Every difference is not a differentiator.
 Each difference costs company and
brings benefit for customer.
Criteria [ difference worth
establishing ]
 Delivery – of high value benefit for
number of customer.
 Distinctive – offer not from competitors
or company has better offer than others.
 Superior – to other ways of obtaining
same benefit
 Communicable – Communicable &
visible to buyer
Criteria [ difference worth
establishing ]
 Preemptive – sought before others i.e
could not be copied by others easily
and early.
 Affordable – buyers can afford to pay
for difference.
 Profitable – for company to introduce
the difference.
Examples
 Unimportant or  Successful
not worth differentiation
differences  Guard Basmati –
 Stanford hotel in Quality assurance & picked

Singapore –world  Polo – mint with

tallest hotel hole.
 T.V at stores  Silk in shampoo
Positioning
“Positioning is the act of designing
the company’s offering and image so
as to occupy a meaningful and
distinct competitive position in the
target consumer minds”.
 Positioning: Company to decide which
differences to promote.

 Positioning is not done to a product but

to the minds of the prospect.
 How many differences to
Promote?
 Rosser Reeves says:
 Develop “unique selling proposition” USP
 Mclean - Plaque removal
 Crest – Anti cavity
 Forhan’s – for Gums
 Ries & Trout also favor one consistent
positioning message.
 Double benefit positioning
may be necessary when two or more firms
are competing with same attributes.
e.g. Volvo– safest and most durable
 Triple benefit positioning —
 Aqua Fresh tooth paste—1)Anticavity
(three colors of paste) 2)better breath
3)whiter teeth
 S K F Beecham attracted three segments
instead of one.
 But increase in number of claims –risk
disbelief
 Four Major Positioning Errors
 Under Positioning– Considering brand has unique
impact on customers. Brand is just another entry in
crowded market place.
 Over Positioning-Buyers wrong perception of
Brand (over positioned) and its cost.
e.g Diamonds (Tiffany) $5000 & above
Actual $900
 Confused Positioning- Too many claims or
changing brand positioning.
e.g. Computer positioned for students then for
Engineers & for Businessman— all unsuccessful
 Doubtful Positioning– When tall claims not
justified by its features with high price.
Which differences to Promote?
1. Technology
2. Cost
3. Quality
4. Service
 Communicating Positioning
(through product features)
 Noisy Lawn mower-more powerful
 Undercoating of car etc- signals Quality
 Phone Call Handling- by Hotels etc
-Ritz-answer with in three rings
-no call shift if possible
-smile in the voices
-Extremely knowledgeable phone receiving
person
 High price – Signals premium Quality to buyers
Quality image

 Packing
 Distribution
 Advertising
 Promotion
 Reduces brand image

 Too often sale-Toyo Nasic

 Reducing packing quality
 High quality product sold in mass
merchandize
e.g. Hyundai & Daewoo Taxi