Marketing Management- 002 (g)
Product Differentiation
&
Product Positioning
1
Product Positioning
Product positioning is the final step of target marketing
procedure. Positioning is the process of distinguishing a
brand from its competitors so that it becomes the preferred
brand in the defined segments of a market.
Al Ries and Jack Trout, who developed the concept of
positioning, defined it as—
“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,
position of the product in the mind of the prospect.”
According to Philip Kotler, “Positioning is the act of
desigining the company’s offering and image to occupy a
distinctive place in target customers’ mind.”
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Product positioning concept can be comprehended in the
following three points—
1. The position of a brand is the perception it brings about in
the mind of a target consumer.
2. This perception reflects the essence of the brand in terms of
its functional and non-functional benefits in the judgment of
that consumer.
[Link] is relative to the perception held by the consumer, about
competing brands, all of which can be represented as points or
positions in his perceptual space and together make up a
product class.
3
Objectives and Importance of Positioning :-
The objective of positioning is to have the brand favourably perceived by the
people in the target market. Two firms have the same positioning strategy if
their marketing offerings are perceived to be identical. Typically there are
differences in how buyers perceive marketing offering. Often the product is the
focal point of the positioning strategy since the other marketing mix
components are working towards positioning the product in the eyes and mind
of the buyer.
As competition intensifies and brands proliferate, consumers tend to
differentiate between brands in their own way. Positioning is a conscious
attempt on the part of the marketer to accentuate this natural tendency and in
the process, impart a distinct identity to his own brand to make it stand out
among the competitors. The basis on which this differentiation is achieved
reflects consumer preferences or attitudes. The marketer, through his diverse
and co-ordinated actions, tries to influence this process.
4
Differentiating the Product
Differentiation is the act of designing a set of meaningful
differences to distinguish the company’s offer from
competitor’s offer. The most important aspect of product
positioning is differentiating the product or brand. There
can be four broad ways to differentiate company’s
offer—
(a) Better Offering:-
It means that the company’s offer out performs its rivals.
It usually involves improving an existing product in a
minor way.
(b) Newer Offering:-
It means developing a solution that didn’t exist before.
This usually involves higher risk than a simple
improvement but also involves chances of higher gain.
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(c) Faster Offering:-
Faster offering means reducing the performance or delivery time
involved in using or buying a product or service.
(d) Cheaper Offering:-
That means offering a similar product for less money.
Treacy and Wiersema distinguished three strategies that lead to
successful differentiation and market leadership—
1. Customer Intimacy:-
Knowing customers intimately and being able to respond quickly
to their specific needs.
2. Product Leadership:-
Offering innovative products and services to the customers that
enhances customer satisfaction and out perform competitors’
products.
[Link] Excellence:-
Providing customers with reliable products or services at
competitive prices and easy availability. 6
