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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 ForbesEureka Forbes used personal selling as used personal selling as the sole mean to reach consumers, the sole mean to reach consumers, IBMIBM differentiated along technology, differentiated along technology, Coke & Coke & PepsiPepsi differentiated through brand differentiated through brand power, power, Rolls RoyceRolls Royce through superior through superior engineering, engineering, DuPont’sDuPont’s leadership in leadership in chemical technology etc.chemical technology etc.

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Tangible Product Attributes Differentiation Based on Differentiation Based on Ingredients/formulaIngredients/formula

Example: Close Up Gel Toothpaste, TTK Prestige Teflon, Promise Example: Close Up Gel Toothpaste, TTK Prestige Teflon, Promise with clove oil, New Ariel Microshine with Carezyme. with clove oil, New Ariel Microshine with Carezyme.

Differentiation Based on Differentiation Based on Functional ValueFunctional ValueExample: 3M Scotch Magic Tape, Computer controlled fridgeExample: 3M Scotch Magic Tape, Computer controlled fridge

Differentiation based on Differentiation based on additional featuresadditional featuresExample: Aristocrat suitcase with wheels, Dunlop OlympusExample: Aristocrat suitcase with wheels, Dunlop Olympus

PackagingPackaging contributing to differentiation contributing to differentiationExample: Frooti Tetrapack, Harpic Toilet CleanerExample: Frooti Tetrapack, Harpic Toilet Cleaner

Differentiation through Differentiation through product designproduct designKinetic Honda Electronic Ignition, Titan WatchesKinetic Honda Electronic Ignition, Titan Watches

Differentiation based on Differentiation based on qualityqualityExample: Godrej Steel CupboardsExample: Godrej Steel Cupboards

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Intangible Characteristics and Emotional Associations

Jo biwi se kare pyar wo prestige se kaise Jo biwi se kare pyar wo prestige se kaise kare inkarkare inkar

Reid & TaylorReid & Taylor RaybanRayban

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POSITIONING Southwest Airlines Southwest Airlines - Low cost carrier- Low cost carrier Funskool Funskool - Safety, variety & education- Safety, variety & education Tata Salt Tata Salt - Iodized salt(1983) - Desk ka namak(2002)- Iodized salt(1983) - Desk ka namak(2002) Captain Cook Captain Cook (1990) - Free Flowing(1990) - Free Flowing Peter England Peter England -- Honest Shirt(1997) - Honestly Impressive(2002)Honest Shirt(1997) - Honestly Impressive(2002) Reid & Taylor Reid & Taylor (1998) - Luxury Suitings(1998) - Luxury Suitings InnovaInnova-(Qualis) - Spacious, trendy &Upmarket-(Qualis) - Spacious, trendy &Upmarket PepsodentPepsodent (1993) - Long lasting protection for hours after (1993) - Long lasting protection for hours after

brushing-Germ Fighting Propertybrushing-Germ Fighting Property Woodland Woodland - Rugged High Quality Premium Casual Shoe- Rugged High Quality Premium Casual Shoe Vicks Vicks - Mothers Love Platform-”Touch Therapy”- Mothers Love Platform-”Touch Therapy”

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SURF EXCEL

Dag Ache HainDag Ache Hain

This campaign has a huge significance It This campaign has a huge significance It says:says:

It is ok to soil your clothsIt is ok to soil your cloths

It is ok to play in the mudIt is ok to play in the mud

It is ok to enjoy lifeIt is ok to enjoy life

Surf ExcelSurf Excel hai na!!!!!!!!!!!!!! hai na!!!!!!!!!!!!!!

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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 Developing a positioning strategy depends much on how competitors position themselves. Do organisations how competitors position themselves. Do organisations want to develop ‘want to develop ‘a me tooa me too’ strategy and position ’ strategy and position themselves close to their competitors so consumers can themselves close to their competitors so consumers can make a direct comparison when they purchase? make a direct comparison when they purchase?

Or does the organisation want to develop a strategy Or does the organisation want to develop a strategy which positions themselves which positions themselves away from their away from their competitorscompetitors? Offering a benefit which is superior ? Offering a benefit which is superior depends much on the marketing mix strategy the depends much on the marketing mix strategy the organisation adopts. organisation adopts.

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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 benefitBy attribute or benefit

This is the most frequently used This is the most frequently used positioning strategy. For a light beer, it positioning strategy. For a light beer, it might be that it tastes great or that it is might be that it tastes great or that it is less filling. For toothpaste, it might be the less filling. For toothpaste, it might be the mint taste or tartar control. mint taste or tartar control.

Example: Vediocon Picture-in-pictureExample: Vediocon Picture-in-picture

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By use or applicationBy use or application

The users of Apple The users of Apple computers can design computers can design and use graphics more and use graphics more easily than with Windows easily than with Windows or UNIX. Apple positions or UNIX. Apple positions its computers based on its computers based on how the computer will be how the computer will be used. used.

Example: Vicks, RasnaExample: Vicks, Rasna

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By userBy user

Facebook is a social networking site used Facebook is a social networking site used exclusively by college students. Facebook exclusively by college students. Facebook is too cool for MySpace and serves a is too cool for MySpace and serves a smaller, more sophisticated cohort. Only smaller, more sophisticated cohort. Only college students may participate with college students may participate with their campus e-mail IDs. their campus e-mail IDs.

Example: Raymonds Vijapat inghaniaExample: Raymonds Vijapat inghania

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

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

Example: If a brand is not number one, then to Example: If a brand is not number one, then to be successful it somehow must relate itself to be successful it somehow must relate itself to the number one brand. Avis tried the number one brand. Avis tried unsuccessfully for years to win customers, unsuccessfully for years to win customers, pretending that the number one Hertz did not pretending that the number one Hertz did not exist. Finally, it began using the line: exist. Finally, it began using the line:

"Avis in only No. 2 in rent-a-cars, so why go "Avis in only No. 2 in rent-a-cars, so why go with us? We try harder."with us? We try harder."

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

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Positioning by product class dissociationPositioning by product class dissociation

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

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Defining Associations

Points-of-difference Points-of-difference (PODs)(PODs)

Attributes or benefits Attributes or benefits consumers strongly consumers strongly associate with a brand, associate with a brand, positively evaluate, and positively evaluate, and believe they could not believe they could not find to the same extent find to the same extent with a competitive brandwith a competitive brand

Points-of-parity (POPs)Points-of-parity (POPs) Associations that are Associations that are

not necessarily unique not necessarily unique to the brand but may to the brand but may be shared with other be shared with other brandsbrands

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Positioning Statement Also referred to as a Also referred to as a brand strategybrand strategy, , positioning strategypositioning strategy, or , or brandbrand

positioning statementpositioning statement, a positioning statement is a succinct description , a positioning statement is a succinct description of the core target audience to whom a brand is directed, of the core target audience to whom a brand is directed, andand a a compelling picture of how the marketer wants them to view the brand. compelling picture of how the marketer wants them to view the brand.

There are four elements or components of a positioning statement: There are four elements or components of a positioning statement: Target AudienceTarget Audience - the attitudinal and demographic description of the - the attitudinal and demographic description of the core prospect to whom the brand is intended to appeal  core prospect to whom the brand is intended to appeal  Frame of ReferenceFrame of Reference - the category in which the brand competes - the category in which the brand competes Benefit/Point of DifferenceBenefit/Point of Difference - the most compelling and motivating - the most compelling and motivating benefit that the brand can own in the hearts and minds of consumers benefit that the brand can own in the hearts and minds of consumers relativerelative to the competition to the competition Reason to BelieveReason to Believe - the proof that the brand delivers what it promises - the proof that the brand delivers what it promises

Template for a Positioning Statement:Template for a Positioning Statement: For For ((target audience)target audience), , (brand name)(brand name) is the is the (frame of reference)(frame of reference) that that delivers delivers (benefit/point of difference)(benefit/point of difference) because only because only (brand name)(brand name) is is reason to believe)reason to believe). .

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