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 • Durability
• Features • Reliability
• Performance • Repairability
• Conformance • Style
• Quality • 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

Sales or Maturity
Profits
Decline

Growth Sales curve

Introductio Profit curve

n

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 Growth of Excess
Introduction Industry capacities

New entrants Reduction High

discouraged In margins Inventories

Existing Weaker
companies companies Pioneer increases share
consolidate withdraw
 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