Marketing: Positioning, Differentiation, and Value Proposition

Hello this is Brian McCarthy in this short video we will discuss the key marketing concepts a positioning differentiation and value propositions we will begin as always with a reminder of the importance of keeping in mind a broad perspective on marketing today we talk about positioning differentiation and the value proposition but we will also keep in mind segmentation in targeting the four PS brand certainly customers the strategic goals of the organization and the context within which marketing takes place the importance of driving revenue and profit the ever-present competition ongoing feedback and research and of course teamwork and organization when marketers talk about positioning they’re talking about determining the distinctive place you want your product or service to occupy in the marketplace relative to the competition and in the mind of the target customer for example when you see this logo what comes to mind most likely its safety which for decades was the key positioning of the Volvo brand how about this one probably something about performance and this one may be a little harder the Toyota Prius but probably you came up with some words around green or efficient or earth-friendly something like that marketers use a tool called a positioning or perceptual map to show in two dimensions the desired place they like their product or service to occupy in the market place relative to the competition and in the minds of the target customer we have two axes vertical and horizontal and it’s the job of the marketer to figure out the most important attributes or labels for each axis let’s look at an example for the automobile market that we’ve been talking about I have labeled the vertical axis eco-friendly at the top and traditional at the bottom the horizontal axis on the Left safety on the right performance we can now place the brands on this positioning to show the space they occupy in the market and in the mind hopefully of the target customer the lower left we have Volvo in the lower right BMW but where should Prius go I struggled a bit with this I ended up putting it in the middle of the horizontal axis and then of course toward the eco-friendly label but a positioning map is a very useful tool for positioning discussions what about differentiation differentiation is a closely related topic to positioning it’s designing your product offering so that it has one or more unique qualities that are number one valued by your customers and number two consistent with your chosen positioning marketers companies organizations have many tools to differentiate their product certainly one is the features that you build into your product or service think about vitamin water it starts out as water we suppose color flavor and vitamins are added think about Starbucks they differentiate in a number of important ways one of them is personnel they devote a lot of energy and time and money to training their personnel so that when you go into a Starbucks you receive excellent service no matter where you are in the world our third example is channel of distribution are you surprised to see this one on the list think about chainsaws in particular the steel brand of chainsaws you can only buy them through authorized steel dealers who are specially trained to offer excellent service and support to help you pick the right chainsaw and they’ll help you figure out how to use it and provide any after sale service that you might need finally of course you can differentiate through image think about coca-cola a pretty obvious example but it’s remarkable what they’ve accomplished with their image an image that promises us happiness a more vibrant life if we buy and drink their Cola but how much differentiation how much uniqueness do we need in our product or service we don’t need to be better in every single category that matters to customers in some categories we’re going to be at parity we call these points of parity or P o P these are the features of our product or service that approximately match what the competition is offering but then we are going to need points of differentiation one or more key features of our product or service that give us a clear competitive advantage over the competition we can certainly beat the competition by giving our customers more but are there situations in which fewer features can be better can you think of any there have been some best-selling books which argue that the answer is yes the book different by youngmee moon blue ocean strategy by Kim and Mauborgne yay and the innovators dilemma by Clayton Christensen all talk about the importance of finding customers who will value a unique offering which might be simpler and more convenient than what they have been able to get in the past by the way I highly recommend all three of these books here’s the idea in action marketers need to look for opportunities to eliminate one or two traditional product attributes while adding in new and unexpected ones one of the examples young me moon talks about in her writing is IKEA they removed furniture assembly which is pretty incredible and then added in things like child care in their stores and even a cafeteria let’s check to see where we are we’ve talked about the broad perspective of marketing we’ve talked about positioning differentiation our last topic is the value proposition a value proposition is a short compelling statement that articulates the specific benefits a company is offering its target market it’s the acid test marketers use to make sure they have something which customers are going to want to buy in other words a value proposition is simply an answer to the question why should the customer buy your product or service there are many different ways to create a value proposition it can be as simple as a list of key benefits another way to approach it is to use a template like this one a fill in the blank template when our customers buy and use our product or service instead of a competitor’s solution then they will receive what key benefits not features but benefits because of the differentiation what unique capability backs up those benefits here’s an example let’s pick a merino wool t-shirt when our customers buy and use our 100% merino wool t-shirt instead of a traditional cotton t-shirt then they will receive warmth comfort and a snug fit because of the insulation and softness provided by 100% merino wool and our special fitted design I have a question for you what is the value proposition for a key product or service offered by your organization if you’re a full-time student you can think about the value proposition for one of the programs your university offers let’s put it all together positioning determining the distinctive place you want your product to occupy differentiation designing your product offerings so that it has one or more unique qualities valued by the customer and the value proposition an answer to the question why the customer buy your product in this video we covered a broad perspective on marketing we talked about positioning differentiation and the value proposition thank you for watching and I’ll see you online

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