E Marketing Ch9 Differentiation Positioning
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  • 1. E-Marketing 4/E Judy Strauss, Adel I. El-Ansary, and Raymond Frost Chapter 9: Differentiation and Positioning Strategies
  • 2. Chapter 9 Objectives
    • After reading Chapter 9 you will be able to:
    • Define differentiation and positioning and explain why they are important elements of marketing strategy.
    • Identify dimensions of differentiation and Internet-specific differentiation strategies.
    • Discuss how companies can position or reposition themselves on the basis of attributes, technology, benefits, user category, relation to competitors, or integrator capabilities.
  • 3. The J. Peterman Story
    • The J. Peterman Company is a classic example of successfully combining clever differentiation with powerful positioning.
    • The founder established his company as a breed apart from ordinary competitors.
    • Visit jpeterman.com and discuss what makes their products “unique.”
  • 4.
    • Kotler defines differentiation as the process of adding meaningful and valued differences to distinguish the product from the competition.
    • There are a number of differentiation dimensions and strategies for their accomplishment.
  • 5. Differentiation Dimensions
    • A firm can differentiate along 5 dimensions:
      • Product
      • Services
      • Personnel
      • Channel
      • Image
  • 6.
    • The Internet differentiates itself by providing a limitless assortment of products.
    • Differentiation may include customization, bundling and attractive pricing of products.
    • Internet sales may not rely as heavily on product packaging as do traditional retailers.
    • Packaging minimization will reduce waste and costs.
    Product Differentiation
  • 7. Service Differentiation
    • Customer service can be enhanced by 24 hour customer feedback through e-mail.
    • Home delivery of groceries and online banking and securities trading are becoming increasingly popular.
    • Today such services supplement traditional services, but may someday replace them.
  • 8.
    • The Internet is a location-free, time-free distribution and communication channel.
    • The Internet serves as a transaction and distribution channel.
    • The Internet provides highly specialized personal services and “do it yourself” websites.
    Channel Differentiation
  • 9. Image Differentiation
    • A company can differentiate itself by creating a unique experience online, called “experience branding.”
    • The Internet’s interactivity allows companies to respond more quickly to customer requests.
      • Faster communication.
      • Retain current customers and attract new ones.
  • 10. Differentiation Strategies
    • Differentiation strategies are particularly important on the Internet.
      • Internet marketing strategy revolves around company image and product information available on the Web.
    • Specific strategies may include:
      • Being the first to enter the market.
      • Owning a product attribute or quality in the mind of the consumer.
  • 11. Differentiation Strategies, cont.
      • Demonstrating product leadership.
      • Utilizing an impressive company history or heritage.
      • Supporting and demonstrating the differentiating idea.
      • Communicating the difference.
    • Amazon.com and Monster.com have successfully differentiated themselves.
  • 12.
    • There are 6 differentiation strategies unique to online businesses.
      • Site Environment/Atmospherics
        • Easy downloads; easy navigation.
      • Making the Intangible Tangible
        • Virtual tours, 3-D images, trial downloads.
      • Build Trust
        • Strong brand recognition.
        • Privacy policy.
    Internet-Specific Differentiation Strategies
  • 13. Internet-Specific Differentiation Strategies, cont.
      • 4. Efficient and Timely Order Processing
        • Deliver timeliness as an important benefit.
      • 5. Pricing
        • In the early days of the Web, companies offered discounts as purchase incentives.
        • Majority of firms today differentiate themselves in other ways besides pricing.
      • 6. Customer Relationship Management
        • Managing long term relationships with customers.
  • 14. Enhancing the Experience
    • The E-Marketing Opportunity Model helps companies differentiate using e-marketing opportunities for enhancing:
      • The selling process.
      • The customer buying process.
      • The customer usage process.
    • Online differentiation involves:
      • Creation of a distinctive customer experience.
      • Development of one-to-one relationships with customers.
  • 15.
    • Positioning is the process of creating a desired image among its competitors in the public’s mind.
    • The e-marketer’s goals is to build a position on one or more bases that are relevant and important to the consumer.
  • 16.
    • Product or service attribute.
    • High-tech image.
    • Benefits.
    • User categories.
    • Comparison with competitors.
    • Integrator position.
    Bases and Strategies for Positioning
  • 17. Product or Service Attribute
    • May include features such as size, color, speed, etc.
    • Amazon’s one-click check-out process is an example of a positioning attribute.
    • Tylenol does not sell online, but provides useful one-to-one features for pain relief and health information.
  • 18. Technology Positioning
    • Shows that a firm is on the cutting edge of technology.
    • At Lands’ End, consumers can build virtual models of themselves and try on virtual outfits.
    • At American Airlines, customers can store seating preferences and frequent flier account information.
  • 19. Benefit Positioning
    • Benefit positioning is generally a stronger basis for positioning, because it answers the consumer question: What will this do for me?
    • Miller Lite offers software that can be used as a social organizer.
    • On the Valvoline motor oil site, visitors can send greeting cards, download racing screensavers and sign up for newsletters.
  • 20. User Category
    • User category positioning relies on customer segments.
    • Kellogg’s has an interactive site for children.
    • Yahoo! Geo Cities hosts pages organized by neighborhoods and specific interests.
  • 21. Competitor Positioning
    • Many firms position by benefits that provide advantages over their competitors.
    • Companies may position themselves against
      • An entire industry.
      • A particular firm.
      • Relative industry position.
    • “I Can’t Believe It’s Not Butter” margarine positions itself against other margarines.
  • 22. Integrator positioning
    • We can expect to see more integrator positioning in the lending, jewelry and hospitality industries.
    • Lending Tree helps brokers find clients more quickly and cheaply.
    • Blue Nile sells an estimated $129 million of jewelry that would require 116 retail stores.
    • Web travel agencies can move market share to hotels that give them discounts.
  • 23.
    • Repositioning is the process of creating a new or modified brand, company or product position.
    • A company may enhance or modify a position, based on market feedback, .
    • Yahoo! repositioned from online guide to Web portal.
    • Amazon repositioned from world’s largest bookstore to “Earth’s biggest selection.”
    Repositioning Strategies