Slides - Uniqueness & Scope Strategies

Slides - Uniqueness & Scope Strategies -...

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Differentiation Strategy htp:/ Differentiation Strategies Introduction s Business level strategies are used to gain a competitive advantage by exploiting core competencies for a particular product market s There are two dimensions to business level strategies: s Competitive Scope (Broad or Focused) s Competitive Advantage (Cost or Uniqueness ) s We have already focused on the low-cost advantage strategy. Next we will exam differentiation strategies Focused Low-Cost Strategy Broad Differentiation Strategy Low-Cost Strategy Focused Differentiation Strategy Cost Advantage Uniqueness Competitive Advantage Broad Target Narrow Target Competitive Scope Best Cost The 5 Competitive Strategies Differentiation Strategies Introduction s Differentiation strategies are attractive when buyers needs and preferences are too diverse to be fully satisfied by a standardized product or sellers with identical capabilities s Successful differentiation allows a firm to: s Command a premium price for its product s Gain buyer loyalty to its brand s Gain new customers that would not purchase standardized product Differentiation Strategies Examples s Unique Taste Dr. Pepper, Listerine s Multiple Features s Wide Selection, Home Depot s Spare Parts Availability Caterpillar s Engineering Design/Performance Mercedes s Prestige Rolex s Technology Leadership 3M s Premium Image Starbucks, Ralph Lauren Differentiation Strategies Value Chain s Supply Chain Activities – Starbucks’ coffee beans, Wal-Mart s – Apple iPod s – Boeing s Outbound Logistics – s – LVMH, Cold Stone Creamery s After Sale Service - Caterpillar
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Differentiation Strategies Marketing Role s Marketing has two roles in the differentiation strategy s Use market research to determine product differentiation features valued by customers s Create a perception of value for chosen features s Perceptions of value may be as important as reality when: s The nature of differentiation is hard to quantify s Buyers are making first time purchases s Buyers are not sophisticated s Repurchase is infrequent Differentiation Strategies
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This note was uploaded on 04/12/2011 for the course MKT 352 taught by Professor Cowart during the Fall '11 term at Grand Valley State.

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Slides - Uniqueness & Scope Strategies -...

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