Positioning and PLC

Product Differentiation

• Most competitive advantages lasts only a short time. Companies therefore constantly need to think up new value adding features and benefits to win the attention and interest of choice rich, price prone consumers.

Differentiation

• It is the act of designing a set of meaningful differences to distinguish the company’s offering from competitors.

How can you differentiate?

• Differentiation can be done in various ways depending on the industry and product category.

• Differentiation can occur in one or more of these areas – product, services, personnel, channel, image.

Product Differentiation

• Form• Features• Performance• Conformance• Quality

• Durability• Reliability• Repairability• Style• Design

Services Differentiation

• Ordering Ease

• Delivery» Installation

• Customer Training

• Maintenance and repair

• Miscellaneous services

Personnel Differentiation

• Competence

• Courtesy

• Credibility

• Reliability

• Responsiveness

• Communication– Channel Differentiation

» Trade» Direct

Image Differentiation

• Identity – what the company wants to project

• Image – what the public perceive

• Image can be enhanced by using, symbols, media, atmosphere, events and employee behaviour

Relevant Differentiation

• Differentiation must be meaningful and relevant to the consumer. So it should satisfy the following criteria

Important Distinctive Superior Preemptive Affordable profitable

USP

• This should be exclusive to the product and make a significant relevant impact to the consumer

Positioning

• The act of designing the company’s offering and image to occupy a distinctive place in the consumer’s mind.

• Positioning normally takes one position in the mind. More than one, the company runs the risk of customer credibility and dilution of positioning

Positioning Strategies

• Attribute

• Benefit

• Use or application

• User

• Competitor

• Product category

• Price/quality

PLC

• Products have a limited life

• Product sales pass through distinct stages

• Profits rise and fall at different stages of the PLC

• Product require different strategies in each stage of the PLC

The Product Life Cycle

Time

Sal

es o

r P

rofi

ts

Growth

Maturity

Decline

Introduction

Profit curve

Sales curve

Strategies - Introduction

• Skimming the market

• Penetrating the market

• Must have sufficient resources to withstand the initial losses and heavy promotion costs

• Incremental selling efforts at this stage is highest

The competitive cyclePioneerIntroduction

Growth ofIndustry

Excesscapacities

High Inventories

ReductionIn margins

New entrantsdiscouraged

Existingcompaniesconsolidate

Weakercompanies withdraw

Pioneer increases share

Strategies - Growth

• Improves quality and adds features• Adds new models and variants• Enters new market segments• Increases distribution coverage and adds new

channels• Shifts communication from awareness to

preference building• Scale economies enable it to lower prices to attract

the next level of price conscious buyers

Strategies - Maturity

• Most products are in this stage

• Price wars are inevitable.

• Scramble for market share

• The fittest survive

• Market modification, product modification, marketing mix modification can help extend the maturity stage

Strategies - Decline

• Withdrawal

• Rationalisation of products

• Harvesting whatever is possible

• Divesting the product

Market Evolution

• Emergence

• Growth

• Maturity

• Decline