Differentiation and positioning considerations are relevant to each element of the marketing mix as well as to onground and online marketplaces. The small business should be working toward a competitive advantage—“the ability to perform in one or more ways that competitors cannot or will not match.”Philip Kotler and Kevin Lane Keller, Marketing Management (Upper Saddle River, NJ: Pearson Prentice Hall, 2009), 276.
Differentiation, setting yourself apart from the competition, is one of the most important and effective marketing tools available to small business owners.Bonny Albo, “Making a Business Stand Out from Its Competitors,” Entrepreneurs @ Suite 101, August 9, 2009, accessed December 1, 2011, bonny-albo.suite101.com/marketing-strategy-differentiation-a136498. Effective differentiation can put a business (or a brand) in the top position among the competition, but an ineffective differentiation strategy can leave a business buried in the middle or at the bottom of the pack.Kim T. Gordon, “Dare to Be Different,” April 1, 2005, accessed December 1, 2011, www.entrepreneur.com/article/76736. A successful differentiation strategy cannot be imitated by competitors—but it can bring you great success with consumers.Dan Herman, “The Surprising Secret of Successful Differentiation,” Fast Company, June 7, 2008, accessed December 1, 2011, www.fastcompany.com/blog/dan -herman/outsmart-mba-clones/surprising-secret-successful-differentiation?.
Business Differentiation: Showing Up Differently(click to see video)
Differentiation is everyone’s goal, but few are able to achieve it.
Small businesses, whether business-to-consumer (B2C) or business-to-business (B2B), can differentiate their companies or brands in many different ways: quality, service, price, distribution, perceived customer value, durability, convenience, warranty, financing, range of products/services offered, accessibility, production method(s), reliability, familiarity, product ingredients, and company image are all differentiation possibilities.Bonny Albo, “Making a Business Stand Out from Its Competitors,” Entrepreneurs @ Suite 101, August 9, 2009, accessed December 1, 2011, bonny-albo.suite101.com/marketing-strategy-differentiation-a136498. There are others as well, limited only by the imagination. One way to uncover differentiation possibilities is to examine customer experience with a product or a service by asking the following questions:Ian C. MacMillan and Rita Gunther McGrath, “Discovering New Points of Differentiation,” Harvard Business Review, July–August 1997, 133–145, as cited in Philip Kotler and Kevin Lane Keller, Marketing Management (Upper Saddle River, NJ: Pearson Prentice Hall, 2009), 277.
No matter what the bases are for differentiating a company or a product, the decision should be made carefully with the expectation that the difference cannot be imitated. When customers are asked whether they can tell the difference between a particular small business and its closest competitors, the answer will hopefully be yes.
The “Murals Your Way” Advantage(click to see video)
How Murals Your Way sets itself apart from other wall mural companies.
Bedbug Dog Sniffs Up Profits
An unusual means of differentiation.
Positioning is about the mind of the consumer: placing a company or a brand (sometimes they are the same, e.g., Carbonite, CakeLove, and Sugar Bakery & Sweet Shop) in the consumer’s mind in relation to the competition.Al Ries and Jack Trout, Positioning: The Battle for Your Mind (New York: McGraw-Hill, 2001), 3.
The positioning decision is often the critical strategic decision for a company or a brand because the position can be central to customers’ perception and choice decisions. Further, because all elements of the marketing program can potentially affect the position, it is usually necessary to use a positioning strategy as a focus for developing the marketing program. A clear positioning strategy can ensure that the elements of the marketing program are consistent and supportive.David A. Aaker and Gary Shansby, “Positioning Your Product,” Business Horizons, May–June 1982, 56–62.
Both big and small businesses practice positioning, but small businesses may not know it as positioning. The small business owner thinks about positioning intuitively, does not use the terminology, and does not always know how to promote the position. Additionally, in many if not most small businesses, “the positioning of products is based on the opinions of the business owner, his or her family, and selected friends and family.”“Product Positioning,” Inc., accessed December 1, 2011, www.inc.com/encyclopedia/product-positioning.html. This notwithstanding, an understanding of positioning should be in every small business owner’s tool kit.
Small-Business Market Position(click to see video)
Small-business owners must figure out how the company should be positioned.
What Is Market Positioning?(click to see video)
A discussion of positioning.
Successful positioning of a small business or its brand is built on a well-defined target market combined with solid points of differentiation. There are six approaches to positioning that the small business owner should consider:David A. Aaker and Gary Shansby, “Positioning Your Product,” Business Horizons, May–June 1982, 56–62.
Welcome to CakeLove
An introduction to CakeLove bakery.
Joe’s Redhots will sell premium-quality hot dogs and other ready-to-eat luncheon products to upscale business people in high-traffic urban locations. Joe’s Redhots will be positioned versus other luncheon street vendors as “the best place to have a quick lunch.” The reasons are that Joe’s Redhots have the cleanest carts; the most hygienic servers; the purest, freshest products; and the best value. Prices will be at a slight premium to reflect this superior vending service. Joe’s Redhots will also be known for its fun and promotional personality, offering consumers something special every week for monetary savings and fun.“Positioning Strategy Statement,” Business Owner’s Toolkit, accessed December 1, 2011, www.toolkit.com/small_business_guide/sbg.aspx?nid=P03_7003.
The challenge for a small business is to decide which approach to positioning a company or a brand is the best fit. This decision “often means selecting those associations which are to be built upon and emphasized and those associations which are to be removed or de-emphasized.”David A. Aaker and Gary Shansby, “Positioning Your Product,” Business Horizons, May–June 1982, 56–62. In the process of writing a positioning statement, something that is encouraged as a way to keep the business on track, be aware of the difference between a broad positioning statement and a narrow positioning statement. A broad statement should encompass enough to allow a company to add products without the need to create a new positioning statement on a frequent basis; a narrow positioning statement puts a company in a “specialist” position in its market.Andy LaPointe, “Is Your Positioning Statement Confusing Your Customers?,” Small Business Branding, May 13, 2007, accessed December 1, 2011, www.smallbusinessbranding.com/714/is-your-positioning-statement-confusing -your-customers. The following are some examples: