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Chapter 9 Objectives
After reading Chapter 9, you will be able to: Define differentiation and positioning and
explain why they are important elements of marketing strategy.
Identify dimensions of differentiation and internet-specific differentiation strategies.
Discuss how companies can position or reposition themselves on the basis of attributes, technology, benefits, user category, relation to competitors, integrator capabilities, or reverse positioning.
The J. Peterman Company is a classic example of successfully combining clever differentiation with powerful positioning. The founder established his company as a
breed apart from ordinary competitors. Every item has a description that
communicates nostalgia and romance. Visit www.jpeterman.com and discuss
The internet allows companies to deliver products more efficiently. Low-cost channels Automated processes Reduced dependence on personnel Lower transaction cost
A company can differentiate itself by creating a unique experience online, called “experience branding.”
Through experience branding firms can better retain customers, target key segments, and enhance profitability. Build-a-Bear extends its offline experience
online. Some Web sites invite users to upload content
and comments, which gives them a competitive edge.
Trout and Rivkin proposed specific differentiation strategies common to offline and online businesses: Being the first to enter the market. Owning a product attribute in the mind of the
consumer. Demonstrating product leadership. Utilizing an impressive company history or
heritage. Supporting and demonstrating the differentiating
Benefit positioning is generally a stronger basis for positioning because it answers the consumer question: What will this product/service do for me? Miller Lite offers software that can be used
as a social organizer. On the Valvoline motor oil site, visitors can
send greeting cards, download racing screensavers, and sign up for newsletters.
We can expect to see more integrator positioning in the real estate, lending, jewelry, and hospitality industries. zipRealty uses software that reduces the
agents' work. LendingTree and HomeGain.com help brokers
find clients more cheaply and quickly. Blue Nile sells an estimated $129 million of
jewelry that would require 116 retail stores. Web travel agencies can move market share to