Differentiation & Positioning

Question 1

What Key term are differentiation and positioning concerned with?

Answer 1

Concerned with a firms Value Proposition

Question 2

Define Positioning

Answer 2

Arranging for a product to occupy a clear, distinctive and desirable position in consumers minds relative to competitors products.

Question 3

Define Differentiation

Answer 3

A set of competitive advantages that a firm possess which differ from competitors offerings, resulting in superior customer value creation

Question 4

How is positioning measured?

Answer 4

Using positioning maps, which can help to identify market gaps and shows where your products/brands sit in relation to competitors on key variables.

Question 5

Name and explain the strategies for Differentiation & Positioning used by firms.

Answer 5

PORTERS GENERIC STRATEGIES

Based on whether firm has a narrow or broad target, and if they desire low costs or differentiation.

COST LEADERSHIP (Low cost, broad target- Aldi)
COST FOCUS (Low cost, Narrow target- Goat Milk)
DIFFERENTIATION (Differentiation, Broad Target- Apple)
DIFFERENTIATION FOCUS (Differentiation, narrow target- Electric cars/ TESLA)

Question 6

Name and explain the 4 conditions when Competitive Advantages are sustainable.

Answer 6

VRIO CONDITION

Valuable- Must add consumer value
Rare- Advantage is hard to acquire
Imitability- The advantage is very hard to copy or replicate
Organisation- The firm is set up to capitalise on these advantages.

Question 7

Why would firms Re-position?

Answer 7

Changes in the external market
Changing consumer perceptions
Stagnation of current market

Question 8

Name and explain the 4 types of re-positioning.

Answer 8

Based on target market and product offering.

IMAGE- Same products, same target market
INTANGIBLE- Same products, different target markets
PRODUCT- Different products, same target market
TANGIBLE- Different products, different target markets

Question 9

Name the 3 key considerations when Positioning.

Answer 9

Choosing position is easier than implementing it
Establishment of position takes time
Maintaining position requires consistent performance and commitment to segment.