MSMK7001 Chap.8 Differentiation, Positioning and Value Propositions
Differentiation, Positioning and Value Propositions
A position is held by the customer
A product's position is how consumers define it on important attributes, relative to competitors. The lecture's line is that products are made in the factory while brands are made in the mind, and consumers position products whether marketers plan it or not.
Its examples each own one idea, from safety to performance to freshness to discovery, and perceptual maps show brands on two buying dimensions with circle size for market share.
Three steps to a position
Firms identify possible competitive advantages, choose the right ones, and select an overall positioning strategy.
Advantage comes from superior value, through lower prices or more benefits that justify higher ones, and can be built through product, services, channels, people or image.
Product differences are horizontal, where buyers split by taste at the same price, or vertical, where every buyer prefers one at equal prices.
Which differences to promote
Some marketers argue for one benefit, a unique selling proposition, because buyers remember the leader best. Others position on several.
Either way a difference should be important, distinctive, superior, communicable, preemptive, affordable and profitable, and those tests are a ready-made checklist for the point of difference in a group plan.
Value propositions and the one-sentence statement
A value proposition is the whole bundle of benefits a brand is positioned on.
Crossing benefits with price, the lecture names five winning propositions from more for more to less for much less. The position is then summarized in a statement of target and need, brand, concept and point of difference, and delivered through consistent performance over time.
What this chapter covers
- 01
What a product position is
- 02
Positioning examples and perceptual maps
- 03
Three steps in positioning
- 04
Competitive advantage and ways to differentiate
- 05
Horizontal and vertical product differentiation
- 06
Seven tests for a worthwhile difference
- 07
Five winning value propositions
- 08
Writing and keeping a positioning statement
Worked example · free
Test two candidate points of difference
- 2Test the low-price option against three criteria.
- 2Test the mentor network against the same criteria.
- 2Recommend one and state the resulting value proposition.
Key terms
- Product Position
- The way consumers define a product on important attributes, the place it occupies in their minds relative to competing products.
- Perceptual Positioning Map
- A chart showing consumer perceptions of brands against competitors on important buying dimensions.
- Competitive Advantage
- An advantage over competitors gained by offering greater customer value, through lower prices or more benefits that justify higher prices.
- Vertical Differentiation
- Differentiation in which every buyer would prefer one product over another if both were sold at the same price, because they differ in quality.
- Unique Selling Proposition
- A single benefit that a company promotes aggressively to its target market, on the view that buyers remember one clear claim best.
- Positioning Statement
- One sentence that sums up a brand's position by naming the target and its need, then the brand, the concept it belongs to and its point of difference.
Differentiation, Positioning and Value Propositions FAQ
What makes a difference worth promoting?
The course lists seven tests. It should deliver a highly valued benefit, be distinctive from what rivals offer, be superior to other ways of getting the benefit, be communicable and visible, be hard for competitors to copy, be affordable to buyers, and be profitable for the company to introduce.
What is the difference between horizontal and vertical differentiation?
With horizontal differentiation products differ but none is better, so at the same price some buyers choose one and some another, as with drink flavors. With vertical differentiation all buyers would prefer one product at equal prices because it is higher quality, as with newer processors or phone generations.
How should a positioning statement be written?
Start with the target and the need, then name the brand, the category concept it belongs to, and the point of difference. The first part places the brand in a category, and the second shows how it differs from other members of that category. Its streaming-service example follows the pattern closely.
Assessment move
Write your group's positioning statement in the course's form, then ask someone outside the group to repeat it back after one reading. If they cannot name the target and the point of difference, the statement is doing too much. Rewrite until it survives that test, because the audience hears it only once.
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