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 companys
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 companys offering
and image to occupy a distinctive place in
the consumers 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

Sales or
Profits

Maturity
Decline
Growth

Sales curve

Introductio
n

Profit curve
Time

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 cycle

Pioneer
Introduction

Growth of
Industry

New entrants
discouraged
Existing
companies
consolidate

Weaker
companies
withdraw

Excess
capacities

Reduction
In margins

High
Inventories

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