Explain Product Positioning and Product differentiation.

A product from an organisation should be uniquely placed in the mind of customers amidst competition. Positioning is done to ensure the product stands out, and sells better than the competition. The key question that a marketer should address is, “Why should buyers purchase our product instead of another?For example, ask a person about a smart phone offered by Samsung and Apple. We will get different answers for both these brands. Every individual will have a different image of the product and it is the job of the marketers to influence the positioning of the products in target markets to influence sales.

Marketers try to create unique identity of the product by several ways. This can be done through appropriate promotion highlighting –

• Product category – Red Bull is positioned as an energy drink in India.

• Product attributes – tooth paste brands highlight attributes as cavity fighters, fresh breath, strong gums, etc.

• Unique selling propositions (USP’s) – something the competitors lack in their products.

• Product line – Samsung offers Television sets, refrigerators, mobiles, Memory storage devices and a lot of different products.

• Pricing strategies – Big Bazar is positioned as value for money store where as Shoppers Stop targets the upper class customers.

• Brand image – It relates to functional and emotional benefits. For example, Royal Enfield versus Hero motorbikes, Harley Davidson versus Yamaha, Mercedes-Benz versus Maruti Suzuki.

• Quality – Arrow, Apple

• Service, etc.

The marketers need to ensure that they understand their competition. They should advertise their product as better than others in the market. Organisations also use catchy taglines. Tagline is a phrase that is used to sum up the product to visually express its benefits and importance.
Example of taglines-
• The Indian Express – Journalism of courage
• Audi – Never Follow
• Nike – Just do it
• L’Oreal – Because I’m worth it
• McDonalds – I’m lovin’ it

The company’s entire marketing program should be in sync with the positioning strategy. The Marketers should be able to communicate and deliver value of the product distinct from competitor products.

Product differentiation –
Differentiation is referred to as adding attributes to the product to distinguish it from the competitor’s offerings. Several attributes of the product are designed or changed to influence customers in the marketplace. For example, Samsung mobile has added a new feature like “Bike mode” to its galaxy range of its models to differentiate it as a necessity for consumers in target markets in Asia. Most of the people in India or other parts of Asia utilise motorbikes as means of commuting.

Products can be differentiated as long as they fulfill the below criteria –
1) Generate customer value – The product should add value or benefit to most of the buyers in the target market. The key to successful differentiation is to add value from customer’s perspective and not from the perspective of the business. Market research should be carried out extensively to understand the unmet needs and challenges/ problems of buyers in target market.

2) Convincing and communicable to the buyers in target market – The customer should be able to perceive the added value. If customers fail to perceive the added value it would imply that it has not be communicated effectively. For example, if customers are not aware that a vegan or vegetarian menu is available in a fast food restaurant, the information has not been passed to the target market in a proper way. It gains more significant if the added value is hard to evaluate, especially non tangible offerings. For example, safety of using Ray-Ban sunglasses. Apart from style and brand value, it also provides protection from UV rays and accidents.

3) The difference should not be easily copied by competitors – The added value should be provided exclusively by the organisation over a long period. If it has been developed with complex systems and competencies/ skills of the resources, it will be difficult and costly to copy. Organisations should invest and encourage Research and Development extensively. Organisations also patent their ideas and products to ensure the competitors don’t create the same value added features to their products.

4) The buyers should be able to afford or pay for the added attribute or feature – Apart from creating a product feature that will benefit the customers, it should also be affordable. The customer should be able to pay for the added value. Adding a value which increases the price of the product will result in decline in sales if the target market is not economically strong.

Many times product differentiation fails to trigger sales. Some mobile manufacturers came up with mobile phones with curved screens. This feature was not a hit among mobile buyers.