Marketing Strategy: Differentiating and Positioning The Market Offering

Marketing Strategy
Philip Kotler discussed five issues of marketing strategy in his 9th edition of Marketing
Management

Differentiating and Positioning the Market Offering
Developing New Products
Managing Life cycle Strategies
Designing marketing Strategies for Market Leaders, Challengers, Followers, and Niches
Designing and Managing Global Marketing Strategies

These issues are covered in different knols by me. This knol describes differentiating and
positioning.
Differentiating and Positioning the Market Offering

The issues discussed in the area of differentiating and Positioning the market offering are:
 Tools for Competitive Differentiation

 Developing a Positioning Strategy
 Communicating the Company’s Positioning

Tools for Competitive Differentiation

Differentiation - Definition: is the act of designing a set of meaningful differences to distinguish
the company's offering from competitor's offerings.

Boston Consulting Group's differentiation opportunities matrix: Actually it is a competitive
advantage matrix applicable to differentiation opportunities.

Four types of industries identified by BCG matrix are:

Volume industry: only a few but very large competitive advantages are possible. The benefit of
the advantage is proportional with company size and market share. Example given - construction
industry

Stalemated industry: in this type there are only few opportunities and the benefit from each is
small. The benefit is also not proportional to the size or market share.
Example: Steel industry - It is hard to differentiate the product or decrease its manufacturing
cost.

Fragmented industry: in this type, there are many opportunities, but the benefit of each of them is
small. Benefit does not depend on size or market share.

Specialized industry: in this type, the opportunities are more and benefit of each opportunity is
high. The benefit is not related to size or market share.

Kotler mentions, Milind Lele's observation that companies differ in their potential
maneuverability along five dimensions: their target market, product, place (channels), promotion,
and price. The freedom of maneuver is affected by the industry structure and the firm's position
in the industry. For each potential competitive opportunity or option limited by the
maneuverability, the company needs to estimate the return. Those opportunities that promise the
highest return define the company's strategic leverage. The concept of maneuverability brings
out the fact that a strategic option that worked very well in one industry may not work equally
well in the other industry because of low maneuverability of that option in the different industry
and by the firm in consideration.

Five Dimensions of Differentiation

Regarding the tools of differentiation, five dimensions can be utilized to provide differentiation.

Product
Services that accompany marketing, sales and after sales services.
Personnel that interact with the customer
Channel
Image

Differentiating a Product

Features

Quality: performance and conformance
Performance - the performance of the prototype or the exhibited sample,
Conformance - The performance of every item made by the company under the same
specification

Durability
Reliability
Reparability
Style
Design

Services differentiation

Ordering ease
Delivery
Installation
Customer training
Customer consulting
Miscellaneous services

Personnel Differentiation

Competence
Courtesy
Credibility
Reliability
Responsiveness
Communication

Channel differentiation

Coverage
Expertise of the channel managers
Performance of the channel in ease of ordering, and service, and personnel

Image differentiation

First distinction between Identity and Image - Identity is designed by the company and
through its various actions company tries to make it known to the market.

Image is the understanding and view of the market about the company.

An effective image does three things for a product or company.

1. It establishes the product's planned character and value proposition.
2. It distinguishes the product from competing products.
3. It delivers emotional power and stirs the hearts as well as the minds of buyers.

The identity of the company or product is communicated to the market by

Symbols
Written and audiovisual media
Atmosphere of the physical place with which customer comes into contact
Events organized or sponsored by the company.

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Marketing Strategy

Differentiating and Positioning the Market Offering

 Tools for Competitive Differentiation

Tools for Competitive Differentiation

Five Dimensions of Differentiation

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