Positioning and Differentiation in Consumer Marketing

Consumers’ perceptions of products and brands are influenced by the marketing and promotional plan. Marketers must identify the key characteristics that are important to the target market and then ensure that their product stands out in the minds of the consumers as the best choice for purchase.

Car Shopping

Two college students walk into an auto show because they both need to buy their first car with the savings they have amassed through part time jobs. Every car manufacturer has their cars available for the students to examine and sit in. Both students have an image in their mind of the type of car they want to purchase: cool, fun, inexpensive and reliable. Most car makers realize that the younger demographic has different car needs than the other target markets.

Product Positioning

Car makers will position their affordable starter cars as having those attributes. A position is the place a product, company or brand occupies in consumers’ minds relative to the competition‘s offerings. Positioning is a process that affects potential customers’ perception of a brand, product or company. It is very important for marketers to realize that you can position a product in any manner that you want, but it does not ensure that the customer will see the product the way it is marketed.

How consumers perceive a brand affects product positioning
Marketing Positioning Car Qualities

For example, defunct car manufacturer Oldsmobile tried to make their cars cool again. They developed new car designs and came up with the slogan, ‘It is not your father’s Oldsmobile.’ No matter what the marketers tried to position their product as attractive to the younger generation, the process failed. Younger consumers could not get the image of older people driving large Oldsmobiles around town and to them it still made the product unattractive.

Product Differentiation

Positioning does assume that consumers are comparing products based on similar characteristics. Marketers must know what characteristics are important to their key target markets, and then position their product to fit those requirements. Our college student car shoppers have decided on fun, cool, innovative and affordable as their key purchasing characteristics. The brands that advertise these types of cars would be Kia, Scion and Subaru. These car manufacturers have positioned their cars as fun, cool and affordable.

For example, the Kia Soul has a very creative ad campaign that uses the ‘Party Rock Anthem’ and a bunch of hip-hop hamsters to position the car as cool. The company also offers an iPad app for the Soul. This use of carving a niche for a product (in this instance a car for young drivers) requires the use of product differentiation. This is a type of positioning strategy that Kia is using to distinguish their cars from the competitor’s in the market place. Kia wants the young driver target market to view that their car has features and offers much more than any of the competition.

Perceptual Mapping

Sometimes marketers need to grasp exactly where all of the competitors in the market place are viewed by consumers. A graphical way of representing two or more dimensions or variables that are represented in customers’ minds is called perceptual mapping. These dimensions can be used by product use, price, quality or attribute.

Example of perceptual mapping
Perceptual Mapping Example

For example, the local diner has spent over $400,000 adding a bar and sports club to its facility. The diner would like for consumers to now view their business as an upscale, club/bar place for dinner and not just a place to get breakfast. They have created a perceptual map that shows all of the local dining establishments based on the criteria dimensions of classy/distinctive through affordable on the x-axis and everyday through special occasion on the y-axis. Through the use of marketing research, the diner was able to get information from the town’s consumers on where they would place the dining establishment on the matrix.

(Source: http://study.com/academy/lesson/positioning-and-differentiation-in-consumer-marketing.html)

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17 thoughts on “Positioning and Differentiation in Consumer Marketing

  1. Oldsmobile is an interesting example, seems like a new target market sector was identified and a reasonable product offered to the market, but the brand image “rail-roaded” the best intentions of the marketing people. I agree they would have benefitted from some “perceptual mapping for position” to validate if the targeted market sector were receptive.

    I did a little digging, here’s what happened:
    “In the fifties and sixties (when each GM brand had its own strong identity), Olds was the ‘executive innovator’. Oldsmobiles always had the latest bells and whistles and were owned by engineering managers and other prosperous individualists. Doctors drove Buicks; tech people drove Oldsmobiles”.
    “In the 80s, GM’s various brands all started to look-alike – it was hard to tell an Olds from a Buick or Pontiac”.
    “New management decided to reposition Oldsmobile as a ‘Honda alternative’. Huh?!! Honda buyers are brand-loyal consumers who appreciate quality and value. With Olds’ lack of brand-identity, not-so-good marks in quality control and relatively high depreciation, this was a hopeless cause from the start”.

    http://www.joesherlock.com/nwsltr19.html

    Liked by 1 person

    • I found your reply so interesting, considering the best about the comparison done with the exceeding craze for automobiles as the years carry on. People have a very different aspect of thinking nowadays than what it was around 10-15 years ago. As i mentioned below, Such stability have been maintained a lot due to quality and the developing positioning skills among the company for the product along with customer needs.

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  2. I agree to the idea of positioning and conceptualizing of a dream product infront of the customers by the company. But sometime, not just the positioning, the quality also tends to give a big part in success. For this, i can bring a very afamous car into limelight, “Tata Nano” or rather known as the One Lakh car in India. Presumably it was considered as the cheapest car that would be available in the automobile market, and was on high demand until it got launched. Unlike its expectations, the car failed to give a tough competition to its costlier competitors. Later on, it relaunched with several modifications but it was no longer a One Lakh Car anymore. This was just an example; Positioning among consumers definitely has a role, but to an extent, when you talk about product stability in the future years, quality and customer satisfaction comes into play.

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  3. Continuing on from your “Oldsmobile” example, I can’t help but think of two car manufacturers who despite their positioning strategy changing significantly over the past decade, I personally still perceive them as low-cost/budget manufacturers. I’m referring to Kia and Hyundai. Granted they’re essentially the same manufacturer operating under different brands, they’ve come a long way from when they entered as low cost (cost leadership) alternatives in the Australian market. Now, Hyundai in particular has been consistently shortlisted on the best car of the year awards list and Kia’s not too far behind. Kia and Hyundai have moved into the mid-tier car market under the same brand and I just can’t shake the notion that it’s “still only a Hyundai/Kia”. Unlike Toyota with their Lexus brand, Kia and Hyundai have actively tried to change the positioning of their brand and product. Kudos to them. I feel a company’s initial positioning strategy is extremely important in its formative years as it can have an adverse effect if you want to change because I know with these two brands, I’m reticent to ever purchasing one.

    In terms of your differentiation, I’m in two minds as to whether that’s differentiation or just good promotion to a market segment? If the Kia Soul features wholesale differences to its main competitors, then maybe there’s a form a differentiation – but if by and large they’re similar vehicles in the same market segment with minor differences then maybe not?

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  4. As illustrated in this blog, it’s clear that marketers use their tactics, skills to differentiate their products/ brands from their competitors using some attributes such as Price, Benefits, Quality, Style, Service, Experience, etc.
    Marketers can differentiate and position their products in the market using their skills, knowledge, technology, experience and so on; but what will happen if their product fails to deliver the results and ends up disappointing the consumer? The worse thing the marketers could ask for is to create a big hype, but fail to deliver. I didn’t have to look for any examples for this as one of my friends has already spoken about TATA NANO, which is a reasonable example.

    This is where the successful organizations have shown their capability / capacity to promise what they can delivery and deliver what they promise. Is every successful product / brand able to deliver what they promise? Of course most of them promise bit more than what they deliver, but they make us believe that they have delivered and you have got it. That’s talent.

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  5. You’ll notice that car manufactors dont advertise as agreessively at young males as they do at young females. To generalise, males have a greater knowledge of cars and tend to form stronger brand loyality, similar to how they will dress like their friends and will choose cars approved by their friends. From a psychological point of few when tend to befriend or follow people who have similar ideologies as us. So instead most of the young dollars advertising is aimed at women, which intern makes those cars instantly unattractive to males. The trade off seems to be if you advertise at middle aged men with bad comb overs and mid-life crisis you can get the young male dollar as well.

    Its interesting to see there isn’t a exact same vechile with a subtle difference that could appease both genders.

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  6. As discussed the ability to differentiate a product is clear as per the cars. However despite attempts to differentiate and fall into a specific segment; sometimes there are other deep rooted images that people cannot change such as the olds mobile example.

    I did feel that the local diner example was a better example as the olds mobile is already covered as part of our text. However perhaps extending the car analogy could be good as the perceptions around cars is very strong in Australia with the notion of the Fold or Holden fan and the passion that people show. We also do get to see the reintroduction of old favourites such as Monaro and the Cooper that rely on deep seated loyalties from our past when the capacity to pursue those dreams is now greater due to higher disposable incomes :-).

    Exploring this concept further is that decisions to purchase a particular product or service is not always based on straight logic but also emotion (A. Damasio, Descarte’s Error: Emotion, Reason, and the Human Brain, Penguin Group, 1994). The question is then how do we also capture the emotional aspect when we are segmenting?

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  7. It is interesting how marketers can change the way people think. When I was first out of school a lot of these new zippy little cars weren’t around, hence no positioning of them in the heads of a young target segment. It was cool to drive a big, old holden around. Is the only reason this has changed because of market positioning? I am not sure, as environmental factors (better fuel economy) have changed over time as well as availability of more different types and brand of car.

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  8. I like the idea of POSITIONING.

    The most frequent positioning strategy. The focus is on a particular attribute, a product feature, or customer benefit.

    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.

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  9. Always an interesting read when it comes to the Automative industry and product positioning. One recent positioning strategy example I have noted today regarding this industry, was whilst watching the Transformers movie with my son for the first time. Chevrolet very cleverly launched its next generation Chevrolet Camaro (made famous by this movie) to appeal to a younger male target market. Delivering aspirational cues to younger male market by not only giving the car an identity (Bumblebee) and further making the vehicle one of the key characters in the movie, many young males after watching the movie for the first time will be asking for a Camaro for their first car !!! My son certainly was…..who knows in 13 years when he gets his license maybe we will be able to afford to buy him the 2015 model. The only problem is Chevrolet has not made the Camaro available in the Australian market…….

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  10. Enjoyed reading the article and got me thinking along the lines of your car example. Started to look at ways in which higher end brands were looking to resonate with a younger target audience, an audience that may not necessarily prioritize is core product in the same way as generations past. Your article generated the thought of how organizations use the raw data of segmentation and turn that into a living idea and lifestyle. I came across this interesting article about Mercedes Benz:

    http://www.stephenzoeller.com/how-mercedes-benz-and-german-luxury-car-brands-use-marketing-segmentation/

    I particularly liked some of their brand conversion strategies focusing on creating conversation with the younger generation in their “Generation Benz” program, have a read!

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  11. Very interesting article, I think product positioning in Australian Automative industry follows a very unique trend. Reminds me of an article I was reading, suggesting that Australia is the leading nation in terms of SUV share of the total automotive industry. Although the more traditional large SUV’s are still in highest demand in Australian market in 2015, a new breed of small SUVs are becoming the new leading trend, targeting small passenger cars buyers.
    Such light-sized city-orientated SUVs – which in fact were not designed to travel off road – are shaping up to be the new trend of the 2015 as far as automative sales are concerned in Australia.
    It is interesting that the off-road capability is perhaps one the most distinctive features of a SUV and yet there is a growing market for compact SUVs that essentially lack this distinctive feature.

    Source: http://www.goauto.com.au/mellor/mellor.nsf/story2/4505C7E06FDC913DCA257E03001EFDCB#!prettyPhoto

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  12. Really good post. I purchase small, medium and SUV vehicles as part of my job. I have a much stronger commercial focus on cars rather than an emotional attachment when I am buying for myself personally. The product positioning the car makers are pitching to is significantly different for a business. The strong focus is on safety as it is for employees as part of their job, and without a 5 star ANCAP rating, it makes no difference of the marketing of the car. That being said, if you get down to a Hyundai and a Kia (sister companies in Korea) cars, there is very little difference in functionality and price. It may come down to whichever has the latest model or lowest servicing costs etc. However, I have come across many a tough tradie who won’t give up his Ford Ranger, Toyota Hilux etc etc for another car – they become very brand loyal and are difficult to change!

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  13. Interesting post. I agree positioning is very vital in marketing strategies of any product or service. interesting enough positioning can be done in multiple ways.Value positioning where companies value their products at or below industry averages, this appeals to price sensitive consumers. Quality positioning, where companies focus on offering the highest quality product and a differentiated product so as to stand out from the market. demographics related positioning, this is where marketers use demographics such as gender and age groups to position their products or services. competitive positioning is where marketers try to re position their competition in the mind of the consumers, in this case a company may use comparative advertising to demonstrate brand superiority. In my opinion in the case of of the student targeted cars all positioning strategies are used

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  14. An interesting read!! It’s clearly illustrate that marketers use positioning strategy to differentiate their products from their competitors. The company needs to identify the competitive advantages and how their products are better than others. From the Kia example, Kia is focusing on young driver target market to purchase their car. However, young demographic has different car needs and preference, it’s hard to catch the market, also Kia has moved into the mid-tier car market than the Sam brand. So I think Kia needs to go back and rebuild their brand equity. Maybe they should move into their initial positioning.The excellent quality and reasonable price to meet customers demand is the most important in success.

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  15. This is a very interesting article. Certainly now more and more automotive manufacturers bring the new cars to the market to position and target younger people. Kia is a great example, Many young people will not really prioritise the performance | handling of the car when they are in purchasing decision. However, “To be Cool” “lots of fun” can be a smart position. Improve the appearance will certainly be way cheaper than innovate a better and faster engine.

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  16. The car industry is at an interesting point in time. Most recently on ‘The Hack’ on Triple J they discussed that young adults aged 18-30 have dropped their purchase of cars from 12% to 10% over the past 4 years with the tendency to obtain their drivers licence much later on than the legal age of 18 (in most states). These days they are opting for public transport or renting residences at a much higher weekly rate if it meant they could get to work without a car. The key for the market is to provide a ‘cheaper’ car in regards to ‘running costs’ and ‘maintenance’ of having a car. As we can all appreciate the cost of petrol is extremely high as well as insurance and ongoing servicing.

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