Positioning and Differentiating;

The Market offering through

Product Life Cycle

Chapter 6

09/24/24 Chapter 6 1
 Introduction

• “Many companies make the same mistake:

thinking any one can be their customer”

09/24/24 Chapter 6 2
 Developing and Communicating a
Positioning Strategy
All Marketing strategy is built on STP (Segmentation, Targeting and
Positioning).
Company first segment the market and then select the market
(customers), it decides to serve (targeting) and after that it chooses
the value proposition (positioning).
After the organization has selected its target market, the next stage
is to decide how it wants to position itself within that chosen
segment. Positioning refers to ‘how organizations want their
consumers to see their product’. What message about the product
or service is the company trying to put across?
Positioning: Is the act of designing the company’s offering and
image to occupy a distinctive place in the mind of the target market.

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 Positioning Strategy
• "A Positioning Strategy results in the image you want to draw in
the mind of your customers, the picture you want him/her to
visualize of you what you offer, in relation to the market situation,
and any competition you may have".

• You will be faced with three main options while designing your
Positioning strategy.
1. Positioning your product against your competitors. i.e. " Our prices
are half of that you may find else where for similar products"
2. Emphasizing a distinctive unique benefit .i.e. 12.1 Mega Pixel
Camera in cell phone.
3. Affiliating your product with something the customer knows and
values .i.e. Kardan is offering the same course outline offered by
Oxford University"
09/24/24 Chapter 6 4
 Positioning Strategy Cont…
• Writing a positioning statement
For writing an effective positioning statement, the firm must
decides the following;
• Your customer: The type of customer you want to target.
• The benefits: What you can do for your customers.
• The method: How you will do it to provide that benefit.
• The USP: Why you think that you can do it better than the
competitors. (USP stands for “Unique Selling Proposition”)

• Your positioning statement reflects what you need to

communicate about a specific product, and to whom. So you will
always hit the right button, communicating the right message to
the right customer at the right time.

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 Positioning Strategy Cont….
• Fill in the blanks and you will get your effective positioning strategy;

• Our product offers the following benefits: ---------------

• To the following customers (your target market_: ----------
• Our product is better than the competitors in the following manner:
----------------
• We can prove our product is the best because (evidence,
differences, testimonials..etc) --------------------

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 Differentiation
• “Differentiation is the process of adding a set of meaningful and
valued differences to distinguish the company’s offering from
competitors offering.”

• For Example:
• IKEA: the world largest furniture retailer. Positioned its company’s
offering “good quality furniture at low price”
• McDonalds: It operates an excellent restaurant in each store
• Johnson & Johnson's: It offer child care services while the parents
shop
• Pizza Hut: It offers a membership program entitling members to
special discounts on their purchases.
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 Factors should consider while
Differentiating
• Factors should consider while differentiating the company’s
offering from competitors offering.

1- Important: The difference delivers a highly valued benefit to a

sufficient number of buyers.
2- Distinctive: The difference is delivered in a distinctive way
3- Superior: The difference is superior to other ways of obtaining the
benefit.
4- Pre-emptive: The difference cannot be easily copied by competitors.
5- Affordable: The buyer can afford to pay for the difference.
6- Profitable: The company will find it profitable to introduce the
difference.
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 Differentiation Tools

1- Product: Form, Feature, Performance, conformance,

Durability, Reliability, Reparability, Style and Design
2- Services: Ordering Ease, Delivery, Installation, Customer
Training, Customer Consulting, Maintenance and repair
3- Personnel: Competence, Courtesy, Credibility, Reliability,
Responsibility and Communication
4- Channel: Distribution and Coverage.
5- Image: Symbols, Events and Sponsorships.

09/24/24 Chapter 6 9
 Differentiation Tools
1- Product Differentiation:
• Form: Many products can be differentiated in form: such as size,
shape, or physical structure of a product.
For example Aspirin, it can be differentiated by dosage size, shape,
color, coating or action time or a cup of coffee can be short, tall,
etc.
• Features: That supplement the products basic functions.
For Example: Automatic transmission, rear product failure.
• Performance Quality: Low, average, high, or superior quality.
• Conformance Quality (performance consistency ): Is the degree to
which all the produced units are identical and meet the promised
specification.

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 Differentiation Tools
1- Product Differentiation:
• Durability (Product Life Cycle): A measure of the product’s
expected operating life under natural or stressful conditions. Buyers
willing to pay premiums for the products that are highly durable.
For Example: Toyota are considered durable cars.
• Reparability: Buyers prefer products that are easy to repair.
Reparability is a measure of the ease of fixing a product when it
fails.
For Example: Dell computers can be repaired easily.
• Design: In increasingly fast-paced markets, price and technology
are not enough, design is the factor that will often give a company
its competitive edge and affect how a product looks and functions
in terms of customer requirements.
For Example: Designer cars, designers clothes are now famous in
customers.
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 Differentiation Tools
2- Services Differentiation
• Ordering Ease: Ordering ease refers to how easy it is for the
customer to place an order with the company.
For Example: Such as internet banking., Consumers are now even
able to order and receive groceries without going to the
supermarket through online shopping.
• Delivery: Refers to how well the product or service is delivered to
the customer. It includes speed and care attending the delivery
process of any product or service.
• For Example: Furniture should be delivered safe.
• Installation: Refers to the work done to make a product operational
in its planned location. Buyers of heavy equipment and technology
based products expect good installation service.
For Example: Installation of Split, installation of Laptop etc.
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 Differentiation Tools
2- Services Differentiation
• Customer Training: Refers to training the customer’s employees to
use the equipment properly.
For Example: General Electric not only sells and installs expensive
X-rays equipment in hospitals, it also gives extensive training to
users of this equipment.
• Customer Consulting: Refers to data, information systems, and
advice services that the seller offers to buyer.
For Example: Organization has Customer Care Service Center
• Maintenance and Repair: Describes the service program for helping
customers keep purchased products in good working order.
For Example: Dell and HP offers e-support system for customers to
repair their products easily.
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 Differentiation Tools
3- Personnel Differentiation
3- Personnel Differentiation: Companies can gain strong competitive
advantage through having better trained employees/people.
Therefore the personnel can creates differentiation trough following
ways;

• Competence: Possess the required skills and knowledge.

• Courtesy: Friendly, respectful
• Credibility: Trustworthy
• Reliability: Perform the service consistently and accurately.
• Responsiveness. Respond quickly to customer’s requests and
problems.
• Communication: Understand the customers and communicate clearly
while solving their problems.
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 Differentiation Tools
4- Channel Differentiation

4- Channel Differentiation:
• Companies can achieve competitive advantage through the way
they design their distribution channels and coverage.
• Distribution of your products in more location than your
competitors can creates good channel differentiation for your
organization.

• For Example: Dell in computers distinguish itself from the

competitors by developing and managing high quality direct
marketing channels.

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 Differentiation Tools
5- Image Differentiation
5- Image Differentiation: Is the way the public perceives or thinks about the
company or its products. Organization can bring Image differentiation in
the following ways;
• Symbols: Identity can be built by strong symbols. For Example: Apple
(Apple Computer with an of a little bite, Nike Swoosh)
• Colors: Companies may choose a color identifier such as blue for IBM,
Yellow for Kodak, red for Coca-Cola.
• Slogans: Every company would benefit by adopting and repeating a short
slogan or tag line. For Example: AT&T called itself “The right choice”.
Ford said “Quality is our Number one job”, Nokia said “Connecting
People”, LG said “Life is Good”
• Events and Sponsorships: A company can build its brand image through
creating or sponsoring various events.
For Example: Bank Alfalah Cup. Pepsi sponsoring worldcup.
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 Product Life Cycle

Sales and
Profits ($)

Sales

Profits

Time
Product Introduction Growth Maturity Decline
Develop-
ment

Losses/
Investments ($)

09/24/24 Chapter 6 17
 Introduction Stage of the PLC

Sales
Sales Low
Low sales
sales
Costs
Costs High
High cost
cost per
per customer
customer
Profits
Profits Negative
Negative
Marketing
Marketing Objectives
Objectives Create
Create product
product awareness
awareness
and
and trial
trial

09/24/24 Chapter 6 18
Marketing Strategies for Introduction Stage
• Marketing Strategies: Introduction Stage
• Sales growth tends to be slow at this stage because it takes
time to roll out a new product and fill dealer pipelines.
• Costs are high per customer as customers are not that much
in introduction stage, and promotional expenditures are at
their highest ratio to sales.
• Profits are negative or low in the introduction stage.
• The companies must plan before introducing new product to
the market. To be first can be highly rewarding but risky as
well.

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 Growth Stage of PLC

Sales
Sales Rapidly
Rapidly rising
rising sales
sales

Costs
Costs Average
Average cost
cost per
per customer
customer
Profits
Profits Rising
Rising profits
profits
Marketing
Marketing Objectives
Objectives Maximize
Maximize market
market share
share

09/24/24 Chapter 6 20
 Marketing Strategies for the Growth Stage

• Marketing Strategies: Growth Stage

• The growth stage is marked by a rapid climb in sales and profits.
Early adopter and additional consumers start buying it.
• Profits increase during this stage as promotion costs are spread
over a large volume.
• Attractive stage for competitors.
• Prices remain where they are or fall slightly, depending on how fast
demand increase.
• Average cost per customer: customers increase so cost is equally
divided by them.

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Marketing Strategies for the Growth Stage
• During this stage, the firm uses several
strategies to sustain rapid market growth
– It improves product quality and add new
product feature and improved styling
– It adds new models, product of different sizes,
flavors
– It enters new market segments
– It increases its distribution coverage and enters
new distribution channels
– It lower prices to attract the next layer of price-
09/24/24
sensitive buyers Chapter 6 22
 Maturity Stage of PLC

Sales
Sales Peak
Peak sales
sales

Costs
Costs Low
Low cost
cost per
per customer
customer

Profits
Profits High
High profits
profits
Marketing Maximize
Maximize profit
profit while
while defending
defending
Marketing Objectives
Objectives
market
market share
share

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 Marketing Strategies for Maturity Stage
The maturity stage divides into three phases;

1. Growth: the sales growth rate starts to decline. There are no new
distribution channels to fill.
2. Stable: sales flatten on a per capita (per person) basis because of
market saturation. Most consumers have tried the product.
3. Decaying maturity: the absolute level of sales starts decline, and
customer begin switching to other products.

• The company should adopt innovative culture and techniques in the

maturity stage of PLC.

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 Marketing Strategies for Maturity Stage
• Market modification. The company might try to expand the market
for its mature brand.
– For example: Johnson and Johnson successfully promoted its
baby shampoo to adult users
– Volume can also be increased by convincing current users to
increase their brand usage;
– For example: Safe Guard and life boy Gold convincing their users
to wash hands frequently.
• Product modification: Managers also try to increase sales by
modifying the product’s characteristics through quality
improvement, feature improvement, or style improvement.
– For example: Nokia N 95 simple one modified to N 95 Black with
8GB memory. Nokia N73 simple and Nokia N73 Music addition
the black one.
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 Marketing Strategies for the Maturity
Stage
• Marketing Mix modification: product managers might also try
to increase sales by modifying other marketing mix element:
– Price: would a price cut attract new buyers? Decrease the
price or give discounts on volume.
– Distribution: can the company introduce the product into
new distribution channels?
– Advertising: Should advertising expenditures be increased?
Should the timing or size of ads be changed?
– Sales promotion: Should the company step up sales
promotion?
– Services: Can the company speed up delivery? Can it extend
more technical assistance to customers?

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 Decline Stage of PLC

Sales
Sales Decreasing
Decreasing sales
sales

Costs
Costs Low
Low cost
cost per
per customer
customer

Profits
Profits Low
Low profits
profits
Marketing Trying
Trying to
to servive
servive while
while defending
defending
Marketing Objectives
Objectives
existing
existing market
market share
share

09/24/24 Chapter 6 27
 Marketing Strategies for the Decline Stage
• Sales decline for a number of reasons;
– Technology advances
– Shift in consumer tastes
– Increase domestic and foreign competition.
• Sales and profits decline, some firm withdraw from market
• Some firm may withdraw from smaller market segments and
weaker trade channels.
• Some may cut their promotional budgets and reduce prices
further.

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 End of Chapter 6

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