Differentiation and Positioning


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Differentiation and Positioning

  1. 1. Online Mktg – Differentiation and Positioning© Ramakrishna Kongalla,Assistant ProfessorIndian Institute of Tourism & Travel Management(An Organization of Ministry of Tourism, Govt. of India)Rtist @ Tourism
  2. 2. Differentiation• Kotler defines differentiation as the process ofadding meaningful and valued differences todistinguish the product from the competition.• There are a number of differentiation dimensionsand strategies for their accomplishment.Rtist @ Tourism
  3. 3. • Differentiation Dimensions– A firm can differentiate along 5 dimensions:• Product• Services• Personnel• Channel• ImageRtist @ Tourism
  4. 4. Product Differentiation– The Internet differentiates itself by providing a limitless assortment ofproducts.– Differentiation may include customization, bundling and attractivepricing of products.– Internet sales may not rely as heavily on product packaging as dotraditional retailers.– Packaging minimization will reduce waste and costs.Service Differentiation– Customer service can be enhanced by 24 hour customer feedbackthrough e-mail.– Home delivery of groceries and online banking and securities tradingare becoming increasingly popular.– Today such services supplement traditional services, but may somedayreplace them.Rtist @ Tourism
  5. 5. Channel Differentiation– The Internet is a location-free, time-free distribution andcommunication channel.– The Internet serves as a transaction and distributionchannel.– The Internet provides highly specialized personal servicesand “do it yourself” websites.Image Differentiation– A company can differentiate itself by creating a uniqueexperience online, called “experience branding.”– The Internet’s interactivity allows companies to respondmore quickly to customer requests.• Faster communication.• Retain current customers and attract new ones.Rtist @ Tourism
  6. 6. Differentiation Strategies• Differentiation strategies are particularly important on theInternet.– Internet marketing strategy revolves around company image and productinformation 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.– 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 differentiatedthemselves.Rtist @ Tourism
  7. 7. Internet-Specific Differentiation Strategies• There are 6 differentiation strategies unique to onlinebusinesses.1. Site Environment/Atmospherics• Easy downloads; easy navigation.2. Making the Intangible Tangible• Virtual tours, 3-D images, trial downloads.3. Build Trust• Strong brand recognition.• Privacy policy.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 purchaseincentives.• Majority of firms today differentiate themselves in other ways besidespricing.6. Customer Relationship Management• Managing long term relationships with customers.Rtist @ Tourism
  8. 8. Enhancing the Experience• The E-Marketing Opportunity Model helps companiesdifferentiate using e-marketing opportunities forenhancing:– 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.Rtist @ Tourism
  9. 9. Positioning• Positioning is the process of creating a desired image amongits competitors in the public’s mind.• The e-marketer’s goals is to build a position on one or morebases that are relevant and important to the consumer.• Bases and Strategies for Positioning– Product or service attribute.– High-tech image.– Benefits.– User categories.– Comparison with competitors.– Integrator position.Rtist @ Tourism
  10. 10. Product or Service Attribute• May include features such as size, color, speed, etc.• Amazon’s one-click check-out process is an exampleof a positioning attribute.• Tylenol does not sell online, but provides usefulone-to-one features for pain relief and healthinformation.Rtist @ Tourism
  11. 11. Technology Positioning• Shows that a firm is on the cutting edge oftechnology.• At Lands’ End, consumers can build virtual modelsof themselves and try on virtual outfits.• At American Airlines, customers can store seatingpreferences and frequent flier account information.Rtist @ Tourism
  12. 12. Benefit Positioning• Benefit positioning is generally a stronger basis forpositioning, because it answers the consumerquestion: What will this do for me?• Miller Lite offers software that can be used as asocial organizer.• On the Valvoline motor oil site, visitors can sendgreeting cards, download racing screensavers andsign up for newsletters.Rtist @ Tourism
  13. 13. User Category• User category positioning relies on customersegments.• Kellogg’s has an interactive site for children.• Yahoo! Geo Cities hosts pages organized byneighborhoods and specific interests.Rtist @ Tourism
  14. 14. Competitor Positioning• Many firms position by benefits that provideadvantages 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 positionsitself against other margarines.Rtist @ Tourism
  15. 15. Integrator positioning• We can expect to see more integrator positioning inthe lending, jewelry and hospitality industries.• Lending Tree helps brokers find clients more quicklyand cheaply.• Blue Nile sells an estimated $129 million of jewelrythat would require 116 retail stores.• Web travel agencies can move market share tohotels that give them discounts.Rtist @ Tourism
  16. 16. Repositioning Strategies• Repositioning is the process of creating a new ormodified brand, company or product position.• A company may enhance or modify a position,based on market feedback, .• Yahoo! repositioned from online guide to Webportal.• Amazon repositioned from world’s largestbookstore to “Earth’s biggest selection.”Rtist @ Tourism
  17. 17. Thank You…!!!©Ramakrishna Kongallae-mail: artist.ramakrishna@gmail.comRtist @ Tourism