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Product Differentiation and Brand Positioning Rahul Vyas Rahul Vyas 1Kotler defines differentiation as the process of adding meaningful and valued differences to distinguish the companys offering from the competition.There are a number of differentiation dimensions and strategies for their accomplishment.Rahul Vyas 9-2Differentiation2A firm can differentiate along 5 dimensions:ProductServicePersonnelChannelImage

Rahul Vyas 9-3Differentiation Dimensions3Product line differentiation is an important marketing strategy.Differentiation may include customization, bundling, and attractive pricing of products.Sales may rely as heavily on product packaging and displays.

Rahul Vyas 9-4Product Differentiation4Customer service can be enhanced by 24-hour customer feedback through e-mail and the ability to respond more rapidly to customer concerns.Home delivery of groceries, online banking, and securities trading are becoming increasingly popular.Today such services supplement traditional services, but may someday replace them.

Rahul Vyas 9-5Service Differentiation5The Services allow companies to deliver products more efficiently.

Low-cost channelsAutomated processesReduced dependence on personnelLower transaction costRahul Vyas 9-6Personnel Differentiation6 As an Example : The internet: Is a location-free, time-free distribution and communication channel.Functions as a communication channel for companies that provide product or service information online.Serves as a transaction and distribution channel for companies that conduct online commercial transactions.Becomes the entire distribution channel for digital products.Rahul Vyas 9-7Channel Differentiation7A company can differentiate itself by creating a unique experience called experience branding.Through experience branding firms can better retain customers, target key segments, and enhance profitability.Rahul Vyas 9-8Image Differentiation8Trout and Rivkin proposed specific differentiation strategies common to offline and online businesses:Being the first to enter the market.Owning a product attribute in the mind of the consumer.Demonstrating product leadership.Utilizing an impressive company history or heritage.Supporting and demonstrating the differentiating idea.Communicating the difference.

Rahul Vyas 9-9Differentiation Strategies9There are various differentiation strategies unique to online businesses.Site Environment/Atmospherics Easy downloads, accurate and clear information, easy navigation.Build TrustStrong brand recognition.Privacy policy.Safe and encrypted payment process for transactions.

Rahul Vyas 9-10Internet-Specific Differentiation Strategies10Efficient and Timely Order ProcessingPricingIn the early days of the Web, companies offered discounts as purchase incentives.Majority of firms today differentiate themselves in other ways besides pricing.Customer Relationship ManagementManaging long-term relationships with customers.Invite User-generated ContentThe key is to trust customers, listen, respond, and learn.

Rahul Vyas 9-11Internet-Specific Differentiation Strategies, cont.11The act of designing an organizations offering and image so that it occupies a distinct and valued place in the target customers mind relative to competitive offerings. Rahul Vyas 9-12Positioning125-13

Positioning StrategiesBy attribute or benefitBy price and qualityBy use or applicationBy userBy product or service classAgainst competitionRahul Vyas Example of Positioning by AttributesToothpaste AttributesMarket SegmentsChildrenTeens, Young AdultsFamilyAdultsFlavorColorWhiteness of teethFresh breathDecay preventionPricePlaque preventionStain preventionPrincipal BrandsColgateClose UpPepsodentColgateSensodyne 14Rahul Vyas 5-15

RepositioningNecessary when the initial positioning is no longer competitively sustainable or profitable, or when better positioning opportunities arise.Colgate for sensitive Gums, Mahindra Passenger Vehicles from Tractors and Jeeps to X UV , Vedanta Resources Khushi Campaign .Rahul Vyas What position do we want to own?What competitors must be outperformed if we are to establish the position?Do we have the marketing resources to occupy and hold the position?5-16Positioning OfferingsMaking the Positioning Strategy Decision

Rahul Vyas 5-17Brand Equity & Brand ManagementBrand NameAny word, device (design, sound, shape, or color), or combination of these used to identify an offering and set it apart from competing offerings.Brand EquityThe added value a brand name bestows on a product or service beyond the functional benefits provided.Rahul Vyas Brand Equity & Brand Management

Develop positive brand awareness and name-product association (Tata Nano)Establish a brands meaning in the minds of consumers (Nike)Elicit the proper consumer responses to a brands identity and meaning (Ceat Tyres)Create a consumer-brand resonance ( Apple, MicroMax)18Rahul Vyas Assign one brand name all of the organizations offerings (GE, Sony)ORAssign one brand name to each line of offerings (Brittannia )ORAssign individual names to each offering (P&G, Unilever)5-19Brand Equity and Brand ManagementBranding DecisionsRahul Vyas Using a single brand nameAdvantageEasier to introduce new offerings when the brand name is familiar to buyersDisadvantageCan have a negative effect on existing offerings if a new offering failsSub-brandingcombining a family brand with a new brand5-20

Brand Management

Rahul Vyas Decide whether or not to supply an intermediary with its own brand name. What are the costs/revenues? Is there excess capacity?If we dont manufacture the brand, will a competitor produce it?5-21

Brand ManagementBranding DecisionsRahul Vyas 5-22Brand MgmtBrand Growth StrategiesLine Extension StrategyBrand Extension StrategyNew Brand StrategyFighting/Flanker Brand StrategyExistingproductsNewproductsNew BrandExisting BrandRahul Vyas Adding offerings with the same brand in a product class that an organization currently servesRespond to customers desire for varietyEliminate gaps in the product lineLowers advertising and promotion costsConsider possibilities of product cannibalism and proliferation of offerings (Coke and Diet Coke)5-23

Line Extension StrategyRahul Vyas The practice of using a current brand name to enter a completely different product classReduced risk due to brand equitySuccess depends on perceptual fit with the original product classe.g., Yamaha makes motorcycles, sound equipment, computer peripherals, and musical instruments5-24

Brand Extension StrategyRahul Vyas Co-brandingPairing two brand names of two manufacturers on a single producte.g. Wills Life Style ,5-25

Brand Extension Strategy: Co-brandingRahul Vyas Most challenging strategyMost costlye.g. Fortuner by Toyota5-26

New Brand StrategyInvolves the development of a new brand and often a new offering for a product class that has not been previously served by the organization.Rahul Vyas Flanker Brand StrategyInvolves adding a new brand on the high or low end of a product line based on a price-quality continuum (Vilas range by East India Hotels) Fighting Brand StrategyInvolves adding a new brand whose sole purpose is to confront competitive brands in a product class being served by an organization. (Slice, Maaza etc ).5-27

Flanker/Fighting Brand StrategyRahul Vyas