M2 Part 3: Differentiation and Positioning

Question 1

What is Market Differentiation?

Answer 1

Differentiation: strategy to distinguish a company’s product from competition or other products

• Car A has bluetooth speakers, keyless entry, and a v6 engine
• Car B has digital speedometer, and is electric
• differentiating the company’s market offering/value proposition from competitors so consumers have more value

Question 2

What is Competitive Advantage?

Answer 2

• Advantage gained over competitors by offering customers greater value
• Can be done by lowering prices and increasing value, or more benefits justifying higher prices

Question 3

What is the relationship between Competitive Advantage, Differentiation and Positioning?

Answer 3

• Competitive Advantage is the basis of Differentiation, which determines the Positioning Strategy

Question 4

What are the various types of Differentiation?

Answer 4

• Product: making a product distinct through features, performance, quality, or design
• Service: distinct unique and superior services provided to customers
• Personnel: the qualities, expertise and customer interaction skills of employees
• Image: the brand identity a company creates in the minds of consumers

Question 5

What is Product Positioning?

Answer 5

• It is the way the product is defined by consumers on important attributes (basically highlighting the important attributes set by product differentiation)
• The place the product occupies in consumers’ minds in relation to competition
• ex. Better smartphone than brand Y due to its quality and low price, Restaurant A has better customer service and trained staff than Restaurant B

Question 6

What are the various positioning strategies?

Answer 6

• Product attributes: highlighting the characteristics of your product, what would make it a better choice to desired consumers (ex. Better camera quality to record tiktoks or reels, Stronger than steel, Faster than the flash)
• Benefits offered: what are the benefits you offer and how can it affect your consumer (less oil, less calories, healthier and tastier)
• Usage Occasions: when is the ideal time to use your product/highlight special occasions to use your product (birthdays, graduation, summer, rain season)
• Classes of Users: highlight the option
  appropriate for the socioeconomic standing of users, and why (cheap, but fashionable; stylish, fashionable, and exquisite)
• Directly Against Competitors: use competitors as a reference point to highlight superior qualities of your product
• Away from Competitors: position yourself away from competitors to stand out as unique from consumers who are tired of the same old story
• Product Classes: what is the type of product you sell (laundry product, automotive repair, clothing, etc)

Question 7

What is the Positioning Statement?

Answer 7

• Summarizes the company’s positioning
• To (target market + need) our (brand) is (concept) that (point of difference) by (reason to believe).