1. Online Mktg – Differentiation and Positioning
© Ramakrishna Kongalla,
Assistant Professor
Indian Institute of Tourism & Travel Management
(An Organization of Ministry of Tourism, Govt. of India)
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2. Differentiation
• Kotler defines differentiation as the process of
adding meaningful and valued differences to
distinguish the product from the competition.
• There are a number of differentiation dimensions
and strategies for their accomplishment.
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3. • Differentiation Dimensions
– A firm can differentiate along 5 dimensions:
• Product
• Services
• Personnel
• Channel
• Image
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4. Product Differentiation
– The Internet differentiates itself by providing a limitless assortment of
products.
– Differentiation may include customization, bundling and attractive
pricing of products.
– Internet sales may not rely as heavily on product packaging as do
traditional retailers.
– Packaging minimization will reduce waste and costs.
Service Differentiation
– Customer service can be enhanced by 24 hour customer feedback
through e-mail.
– Home delivery of groceries and online banking and securities trading
are becoming increasingly popular.
– Today such services supplement traditional services, but may someday
replace them.
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5. Channel Differentiation
– The Internet is a location-free, time-free distribution and
communication channel.
– The Internet serves as a transaction and distribution
channel.
– The Internet provides highly specialized personal services
and “do it yourself” websites.
Image Differentiation
– A company can differentiate itself by creating a unique
experience online, called “experience branding.”
– The Internet’s interactivity allows companies to respond
more quickly to customer requests.
• Faster communication.
• Retain current customers and attract new ones.
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6. Differentiation Strategies
• Differentiation strategies are particularly important on the
Internet.
– Internet marketing strategy revolves around company image and product
information available on the Web.
• Specific strategies may include:
– Being the first to enter the market.
– Owning a product attribute or quality in the mind of the consumer.
– Demonstrating product leadership.
– Utilizing an impressive company history or heritage.
– Supporting and demonstrating the differentiating idea.
– Communicating the difference.
• Amazon.com and Monster.com have successfully differentiated
themselves.
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7. Internet-Specific Differentiation Strategies
• There are 6 differentiation strategies unique to online
businesses.
1. Site Environment/Atmospherics
• Easy downloads; easy navigation.
2. Making the Intangible Tangible
• Virtual tours, 3-D images, trial downloads.
3. Build Trust
• Strong brand recognition.
• Privacy policy.
4. Efficient and Timely Order Processing
• Deliver timeliness as an important benefit.
5. Pricing
• In the early days of the Web, companies offered discounts as purchase
incentives.
• Majority of firms today differentiate themselves in other ways besides
pricing.
6. Customer Relationship Management
• Managing long term relationships with customers.
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8. Enhancing the Experience
• The E-Marketing Opportunity Model helps companies
differentiate using e-marketing opportunities for
enhancing:
– The selling process.
– The customer buying process.
– The customer usage process.
• Online differentiation involves:
– Creation of a distinctive customer experience.
– Development of one-to-one relationships with customers.
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9. Positioning
• Positioning is the process of creating a desired image among
its competitors in the public’s mind.
• The e-marketer’s goals is to build a position on one or more
bases that are relevant and important to the consumer.
• Bases and Strategies for Positioning
– Product or service attribute.
– High-tech image.
– Benefits.
– User categories.
– Comparison with competitors.
– Integrator position.
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10. Product or Service Attribute
• May include features such as size, color, speed, etc.
• Amazon’s one-click check-out process is an example
of a positioning attribute.
• Tylenol does not sell online, but provides useful
one-to-one features for pain relief and health
information.
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11. Technology Positioning
• Shows that a firm is on the cutting edge of
technology.
• At Lands’ End, consumers can build virtual models
of themselves and try on virtual outfits.
• At American Airlines, customers can store seating
preferences and frequent flier account information.
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12. Benefit Positioning
• Benefit positioning is generally a stronger basis for
positioning, because it answers the consumer
question: What will this 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.
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13. User Category
• User category positioning relies on customer
segments.
• Kellogg’s has an interactive site for children.
• Yahoo! Geo Cities hosts pages organized by
neighborhoods and specific interests.
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14. Competitor Positioning
• Many firms position by benefits that provide
advantages over their competitors.
• Companies may position themselves against
– An entire industry.
– A particular firm.
– Relative industry position.
• “I Can’t Believe It’s Not Butter” margarine positions
itself against other margarines.
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15. Integrator positioning
• We can expect to see more integrator positioning in
the lending, jewelry and hospitality industries.
• Lending Tree helps brokers find clients more quickly
and cheaply.
• Blue Nile sells an estimated $129 million of jewelry
that would require 116 retail stores.
• Web travel agencies can move market share to
hotels that give them discounts.
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16. Repositioning Strategies
• Repositioning is the process of creating a new or
modified brand, company or product position.
• A company may enhance or modify a position,
based on market feedback, .
• Yahoo! repositioned from online guide to Web
portal.
• Amazon repositioned from world’s largest
bookstore to “Earth’s biggest selection.”
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17. Thank You…!!!
©Ramakrishna Kongalla
e-mail: artist.ramakrishna@gmail.com
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