Topic2.StrategyRevisited

Positioning strategies 2 broad differentiation

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Unformatted text preview: es 2. Broad Differentiation Strategies – Example: •  Just like another company with a good strategy… ▫  Strong product image ▫  Physically differentiated products ▫  Consistency among the product, the packaging, the advertising and promotion, the retail environment ▫  Packaging and retail environment (only sells its products via its own stores) •  Image?? “My products can only cleanse, moisten and protect” Anita Roddic UPF - International Strategic Management 2012 116 a. Positioning Strategies 2. Broad Differentiation Strategies How to Signal The Value of Product Offerings: •  A high price (in instances where high price implies high quality and performance) •  More appealing or fancier packaging •  Extensive ad campaigns •  The luxuriousness and ambience of a seller’s facilities •  The professionalism, appearance, and personalities of the seller’s employees 58 28/04/12 117 UPF - International Strategic Management 2012 a. Positioning Strategies 2. Broad Differentiation Strategies How to Signal The Value of Product Offerings (2): When & Why? •  When the nature of differentiation is subjective or hard to quantify •  When buyers are making a first-time purchase and are unsure what their experience with the product will be, •  When repurchase is infrequent and buyers need to be reminded of a product’s value 118 UPF - International Strategic Management 2012 a. Positioning Strategies 2. Broad Differentiation Strategies When a Differentiation Strategy Works Best Type of product or service •  Products / services that are technically simple, satisfy uncomplicated needs, have to meet technical standards? •  Products that are technically complex, satisfy complex needs, no technical standards? Few rivals are following a similar differentiation approach Technological change is fastpaced and competition revolves around rapidly evolving product features 59 28/04/12 UPF - International Strategic Management 2012 119 a. Positioning Strategies 2. Broad Differentiation Strategies What to avoid when following a differentiation strategy? •  Buyers do not perceive the differentiating features as appealing or valuable or worth paying for •  Overspending on efforts to differentiate the product offering •  Over-differentiating (product features > buyers’ needs) •  Charging a price premium buyers perceive is too high •  Getting too comfortable with image and customer loyalty •  The ability of competitors to quickly copy UPF - International Strategic Management 2012 120 a. Positioning Strategies 3. & 4. Focused (or Niche) Strategies Note: Low cost or differentiation!!! Concentrated focus on a narrow piece of the total market… •  Geographic uniqueness •  Specialized requirements in using the product •  Special product attributes that appeal only to those buyers that comprise the market niche 60 28/04/12 UPF - International Strategic Management 2012 121 a. Positioning Strategies 3. & 4. Focused (or Niche) Strategies - Example …With 28 stores in U.S., the Container Store sells products to reorganize and rebuild your closets, sort out your kitchen drawers and cabinets, or add shelves, hooks, and storage anywhere in your home, office or dorm room… “The fact is, we don’t sell Bounty paper towels. We sell complicated stuff like those Elfa storage systems [for closets, garages...
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This note was uploaded on 10/18/2012 for the course BUSI 102 taught by Professor X during the Spring '12 term at Universitat Pompeu Fabra.

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