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E Marketing Ch9 Differentiation Positioning


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Strauss Emarketing Chapter 9 Differentiation Positioning

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E Marketing Ch9 Differentiation Positioning

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