This document discusses differentiation and positioning strategies for online marketing. It defines differentiation as adding meaningful differences to distinguish a product from competitors. Companies can differentiate along dimensions like product, services, personnel, channel, and image. Specific internet differentiation strategies include site environment, making intangibles tangible, building trust, efficient order processing, pricing, and customer relationship management. Positioning involves creating a desired image in the public's mind based on relevant attributes, benefits, user categories, competitors, or an integrator role. The document provides examples of how companies have implemented various differentiation and positioning strategies online.

1. Online Mktg – Differentiation and Positioning
© Ramakrishna Kongalla,
Assistant Professor
Indian Institute of Tourism & Travel Management
(An Organization of Ministry of Tourism, Govt. of India)
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2. Differentiation
• 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.
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3. • Differentiation Dimensions
– A firm can differentiate along 5 dimensions:
• Product
• Services
• Personnel
• Channel
• Image
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4. Product Differentiation
– 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.
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.
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5. Channel Differentiation
– 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.
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.
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6. 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.
– 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.
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7. Internet-Specific Differentiation Strategies
• There are 6 differentiation strategies unique to online
businesses.
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 purchase
incentives.
• Majority of firms today differentiate themselves in other ways besides
pricing.
6. Customer Relationship Management
• Managing long term relationships with customers.
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8. 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.
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9. Positioning
• 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.
• Bases and Strategies for Positioning
– Product or service attribute.
– High-tech image.
– Benefits.
– User categories.
– Comparison with competitors.
– Integrator position.
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10. 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.
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11. 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.
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12. 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.
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13. 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.
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14. 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.
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15. 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.
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16. Repositioning Strategies
• 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.”
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17. Thank You…!!!
©Ramakrishna Kongalla
e-mail: artist.ramakrishna@gmail.com
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