Product and Service Management

Exploring Product/Service
Management

Competitive Advantage
Positioning

Brand Extension
• A marketing tool in which a company will
develop a new product as a “spinoff” or “line
extension” of a well known product.
• Examples would be
– Mr. Clean Mr. Clean Magic Eraser
– Clorox Clorox Pen
– Kool Aid Kool Pops

Positioning
• Why would a business expand its product mix?
– To provide a wider selection of products to
customers hoping to increase business.
• Product width – how many different types of
products are
• Product depth – how many different types of one
product is there.

Width of product – How many Pepsi Depth of product – How many types
products are there? of Mt Dews are there.

Positioning

How will you “beat” your competition?

You will need to get an “advantage” over your
competition that your customers will trust.

A competitive advantage is an advantage over
competitors gained by :
1. Offering consumers greater value, either by means
of lower prices or
2. providing greater benefits and service that
justifies higher prices.

Will customers pay the higher price at your business because your service is better?

POSITIONING
is how your target market (customer) defines
you (your business) in relation to your competitors.
Positioning
Purpose of Positioning
The purpose of positioning is to make your
product or service stand out in a crowd.
Positioning is important because you are
• competing with all the noise out there
competing for your potential customers’
attention.
• If you can stand out with a unique
benefit, you have a chance at getting
their attention.

Examples of Positioning
Positioning

I might drive by 3 gas stations to buy gas because I get
better gas mileage on the gas at that station. The product
makes me continue to go there.

Clothes might be more expensive at
this store, they offer free
alterations, gift wrapping, and easy
returns. I will pay the extra price for
the service.

I love coupons. I would drive extra miles to get
“triple” coupons.

“THOUGHT”
Positioning

• A company may view itself and see its
products in a different way than customers or
potential customers view the products.

• This would lead to failure to the business.

• Can you think of an example???

Why Positioning is Important
Positioning
• When positioning your product/service, it is important to
focus on how your target market (customers) perceives
you. After all, the target market makes up those consumers
that are most likely to purchase your product/service.

• Key tip: you can never make everyone happy, but you must
make your target market happy in order for your business
to survive.

Relationship Between Competition and
Positioning
Positioning
Is our product the first in its market?
If not, how are our competitors positioned?

Do we have enough money to position our product/service
similarly to the market leader and thus take over as the market
leader?

If not, we must find an unoccupied position in the market that the
target market cares about.

Example: Target was certainly not the first mass
merchandiser, but it was the first to successfully position
itself as the “trendy, hip mass merchandiser” in the eyes of its
target market.
www.target.com

Positioning Strategies
Positioning

• There are seven positioning strategies that can be pursued:
• Product Attributes: What are the specific product
attributes?
• Benefits: What are the benefits to the customers?
• Usage Occasions: When/how can the product be used?
• Users: Identify a class of users.
• Against a Competitor: Positioned directly against a
competitor.
• Away from a Competitor: Positioned away from
competitor.
• Product Classes: Compared to different classes of products.

Marketing Mix and Positioning
Positioning
• Each of the 4 P’s should be examined as potential tactics for
differentiating your product/service and reinforcing its
positioning in the minds of the target market.

For example, Krispy Kreme doughnuts were
originally available to consumers only at Krispy
Kreme bakeries. In the early 2000’s, the company
decided to alter its distribution (Place) strategy to
include supermarkets and gas stations. While that
decision radically increased sales potential by www.krispykremem.com
making the product available to more consumers,
it also changed how the target market perceived
the Krispy Kreme brand.

Marketing Mix and Positioning
Positioning

• Think about it:
Do you view a sandwich that you buy at a gas
station differently from a sandwich that you
purchase at a restaurant?

How the 4 P’s Affect
Product/Service Positioning
Positioning

Product/Service
What does the customer want from the product/service?
What needs does it satisfy?
How and where will the customer use it?
How is it differentiated versus your
competitors’ products/services?

www.picklebarrelme.com

Positioning
Place
Where do buyers look for your product or service?
 they look in a store, what kind? A specialist boutique or in a
If
supermarket, or both? Or online? Or direct, via a catalogue?
How can you access the right distribution channels?
 you need to use a sales force? Or attend trade fairs? Or make
Do
online submissions? Or send samples to catalogue companies?
What do your competitors do, and how can you learn from that
and/or differentiate what you do from them?
Would you pay more for someone
to pump your gas and clean your
windshield??

Positioning
Price
•  What is the value of the product or service to the buyer?
•  there established price points for products or services in this
Are
area?
•  the customer price sensitive? Will a small decrease in price gain
Is
you extra market share? Or will a small increase be
indiscernible, and so gain you extra profit margin?
•  What discounts should be offered to
trade customers, or to other specific segments
of your market?
•  How will your price compare with your
competitors?
How far will you drive to fine the best price!!

Positioning
Promotion
Where and when can you get across your marketing
messages to your target market?
Will you reach your audience by advertising in the
press, or on TV, or radio, or on billboards? By using direct
mail? Through PR? On the Internet?
When is the best time to promote? Is there seasonality
in the market? Are there any wider environmental issues
that suggest or dictate the timing of your market
launch, or the timing of subsequent promotions?
How do your competitors do their promotions? And how
does that influence your choice of promotional activity?

How Marketing Mix and Positioning
Can Affect a Business
Positioning

• If a business extends its operating hours to
accommodate its customers, it may increase
the number of customers but it will also
increase the cost of payroll to pay for the extra
hours.

Positioning

• Convenience is important to customers.
When a business offers a service that saves
time for a customer, it is hoping to attract
more customers thus increasing their profits.
Examples of convenience

Source: www.mcdonalds.com

Positioning
• Customized Services will cost a customer
more but many people are willing to pay more
for special services.
– Offering customized services can lead to higher
profit margins for the business.
• With a SAM’S Credit Card, you can enter the store 2 hours
early.
• You can call and have your order pulled and ready for pick
up.
www.samsclub.com
• You must have a SAM’s Credit Card.

Positioning
• By emphasizing its economic values (lower prices) in the marketplace, a
business is positioning it’s products based on prices.

If a business that emphasizes a product's environmental friendliness is
positioning the product by focusing on attributes or features of a product.

Source: http://www.askprimerica.com

Positioning

• Sometimes the quality of a product is used to
for emphasis. The products is being
positioned based on its quality. Customers will
sometimes pay more for quality.

vs
Source: www.nikeinc.com

Positioning

• Why should I use one competitors product over
another? When a company emphasizes the
advantages of its product over a competitors, it is
positioning the product based advantages.

Source: gadgetcage.com

Product and Service Management

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Product and Service Management