product positing and product diffreneciation, Schemes and Mind Maps of Marketing

Download product positing and product diffreneciation and more Schemes and Mind Maps Marketing in PDF only on Docsity! PRODUCT POSITIONING What is a product? Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Product position: The way the product is defined by consumer on important attributes. The place the product occupies in consumer’s mind relative to competing products. OR A product’s position is the complex set of perceptions, impressions, and feelings that consumer have for the product compared with competing products Example: In automobile market, the Toyota Echo and Ford focus are positioned on economy, Mercedes and Cadillac focus on luxury, and Porsche and BMW positions on performance. Consumers are overloaded with information about products and services .They cannot reevaluate products every time they make a buying decision .To simplify the buying process, consumers organize products, services, and companies into categories and position them in their minds. Consumers position products with or without the help of marketers. But marketers do not want to leave their products, position to chance .They must plan position that will give their product the greatest advantage in selected target markets, and they must design marketing mixes to create these planned positions. Positioning map: In planning their positioning strategies, marketers often prepare perceptual positioning maps, which show consumer perceptions of their brands versus competing products on important buying dimensions. Positioning Strategy: A positioning strategy is when a company chooses one or two important key areas to concentrate on and excels in those areas. A firm's positioning strategy focuses on how it will compete in the market. An effective positioning strategy considers the strengths and weaknesses of the organization, the needs of the customers and market and the position of competitors. The purpose of a positioning strategy is that it allows a company to spotlight specific areas where they can outshine and beat their competition. Let's examine the requirements needed for a company to compete in the following areas: quality, cost, flexibility, speed, innovation and service. We will take a look at different manufacturing and service companies to identify examples for each and how they use their positioning strategy from an operational standpoint. Cost Positioning Strategy Big mart is not known for excellent customer service. In fact, it is almost impossible to find help in the stores. Big mart is the biggest retailer in the world because they have aligned their operations to margins compared to its market rivals. PRODUCT DIFFERENTIATION What Is Product Differentiation? Product differentiation (or just differentiation) is a marketing process of differentiating an offering (product or service) from others in the market, to make it more appealing to the target audience. It involves defining the offering’s unique position in the market by explaining the unique benefit it provides to the target group. This may also be referred to pinpointing a unique selling proposition of the product to make it stand out from the crowd. Why Is Product Differentiation Important? The increased competition has divided the demand among different players in the market. This has made it very important for businesses to make their customers understand what different they have to offer. Besides making the product survive in the market, product differentiation is important for the following reasons: Product differentiation translates the product attributes into benefits.  It answers the biggest question of the customers – ‘What’s in for me?  It gives the customers a reason to purchase the brand’s product and repeat the purchase.  It increases the recall value of the product.  It increases brand loyalty and builds brand equity.  Attribute-based differentiation is important for the brand to defend their price from levelling down to the bottom part of the price spectrum. Product Differentiation Types & Factors Differentiation depends on customer perception. It’s not how the brand sees its product, it is how the customer recognizes the product. There are three types of product differentiation: Horizontal differentiation: Distinctions in products that cannot be evaluated in terms of quality. E.g.: Mineral water brands. Vertical differentiation: Distinctions in products that can be evaluated in terms of quality. It’s a case where it is possible to say that one good is better than the other. Simple (or mixed) differentiation: Differentiation based on numerous characteristics. A product can be differentiated based on: Price: The price is the most common determinant of which target group will be attracted to a brand’s product. It separates a premium product from economical products. Example: Zara’s products are considered premium products.  Features: Features like size, shape, ingredients, origin, etc. differentiate products in the same price spectrum. They also help the brand to back their high pricing decisions.  Location and Service: Local businesses can differentiate themselves from their larger national competitors by emphasizing that they support the local community. A local restaurant, for example, will hire locally and may source its food and ingredients from local farmers and purveyors. Channels of Distribution: Channels of distribution also plays a vital role in differentiating a product from the competition. For example, Amway uses a selective distribution strategy to position itself as a quality brand.  Complexity: The level of complexity of usage of a product plays a very important factor in