Once a company has decided which segments to enter, marketers must decide which comparative advantage they will focus on. This step is called the positioning and differentiation strategy. A product’s position is the way the product is defined by the consumers. To be relevant, a product or a brand must be easily differentiated from its competitors, mostly through its comparative advantages.
Positioning can be set on several dimensions. Price is always one of them, and then the company defines a set of other values such as quality, performance or design. Each firm tries to offer a unique set of benefits that appeals consumers to differentiate its product or brand from competitors.
Finding the right competitive advantage represents a high challenge in mature markets where a great many firms are present. That is why companies have found different ways of differentiation. During the setup of the marketing mix strategy, marketers can choose to build their competitive advantage through product, service, channel, people, or image differentiation. Indeed, every aspect of the customer’s experience can offer opportunities to create a competitive advantage.
The best example would be Coca-Cola vs. Pepsi which have chosen totally opposite positioning. The first positioned its soda toward a classic- and family-drink image when the other targets young people with celebrities in its commercial, as have demonstrated my classmates in their practicum on this topic (See Sources).
After choosing the right competitive advantages to create the perfect bundle of benefits, marketers must select an overall positioning strategy through a value proposition. The following table shows those possible value propositions on which a company might position its product.
Source: Kotler, Philip, Principles of Marketing, Prentice Hall, 15th Edition, 2013
Those value propositions go from “More for More” to “Less for much Less” and the company has to choose where to position its message to target the right audience. Of course the winning value proposition would be “More for Less”, but marketers know that some customers are willing to pay more to get more and the optimal value proposition does not fit for every customer and every product.
The last challenge marketers face lies in the sustainability of their value proposition. Indeed, once a company has built the desired positioning strategy, it must take care to maintain or adapt the position through consistent performance and communication and monitor the moves of its competitors.
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