[Institute]
Product Positioning
Introduction
With the introduction of modern marketing methods, there has been a gradual shift from the selling approach to the marketing approach. Now the businesses no more develop the products and create strategies to sell it, but now the marketing cycle initiates from the potential customers. Now the organizations endeavor to understand the customer insights, and they develop their products or services based on these insights (Pride & Ferrell, 2008). This process also involves understanding what the elements that influence the buying decision of consumers. It is now a reality that customers do not buy products based on the functional components, but there is a significant psychological process behind it. Every product or service has a humanlike personality, which is developed through the process of positioning. Product positioning an image of the product that the marketers symbolize in the minds of customers. For example, Apple IPhone has a positioning based on creativity and innovation.
Advantages and Disadvantages of Analytical Tools with Situations
Having a product personality is extremely significant for an organization, if it wants to create loyal customer-base and if it wants to survive in the market. This notion of positioning is a lengthy process that initiates from the positioning analysis. There are numerous techniques for the positioning analysis are done that allows organizations to create a unique and sellable product positioning. One of the most common types of technique is called the Positioning
Triangle. This triangle has three essential elements that include understanding target market, understanding competition, and mapping buying criteria. The first step of target marketing knowledge is done through the target audience profile. This template allows the marketer to understand the buying criteria used by the potential target market. The same analysis is applied to the competition and based on the gaps in the market a new positioning is defined.
The positioning triangle allows its both its advantages and disadvantages. The primary benefit of this analysis is the associated with the idea that it enables the organization to identify the positioning gaps in the market that are missed by the competition. It also helps understand the target market and competition for effective planning and decision-making. On the contrary, it restricts the company to create positioning based on the gaps missed by the competition, as it never allows the company to create an out-of-the-box strategy. Sometimes, the customer even does not know what the actual desire and the company have the potential to create a new needs; for example traveling in the airplane was never need, but it is a primary need of many now.
The analysis mentioned above can be used in almost every situation when the company needs to work on the strategy of differentiation rather than cost leadership. For example, Nokia was once the number of phone manufacturers, but Samsung explored the need to low-cost phones that can work like minicomputers; thus, they entered into the smartphone market.
Competitive Advantage
Introduction
Copycats products might earn money in long-term but to have a sustainable stream of revenue, the organizations must develop a certain kind competitive advantage in the market. This
notion was heavily promoted by Michael Porter, who defined the two major sort of strategy, that majority of organizations use; this includes Cost Leadership and Differentiation. Developing competitive advantage over the competitors is the only way a brand can succeed in the market (Birkinshaw, 2004). It is the only guarantee for the survival. The success of Facebook over other social networking sites is a witness to the concept of competitive advantage. Before Facebook, other social networking sites as Orkut was famous, but it did not offer much to be a network with other friends. Its concept was more about one-to-one interaction. Through research, Facebook created this competitive edge, and hence it became a market leader.
Advantages and Disadvantages of Analytical Tools with Situations
There are some analytical tools that help the organization in the creation of competitive advantage. One of the commonly used tools is called the SWOT analysis. SWOT stands for strengths, weaknesses, opportunities, and threats (Greer, Plunkett & Plunkett, 2000). While strengths and weaknesses are internal, while the opportunities and threats are external (Winer, 2000). For the strategic planning, the organization must realize its abilities and the things on which it need to strengthen its abilities. Understanding the strengths and weaknesses of the organization allows it to develop their plans in a way that lets it develop its strategic advantage. The external threats make the organization proactive, so the organization can develop its contingency plans if any drastic changes occur. It also allows the organization to develop its strengths, so it continues to remain relevant in future.
SWOT analysis enables the organization to utilize better opportunities and get the advantage of its strengths. For example, Nokia was once considered a global leader in the cellphone
Manufacturing industry. Nokia continued their legacy for many years when it was completely overshadowed by brands like Apple and Samsung. This happened because, Nokia completely failed to evaluate the external market forces, mainly the opportunities and threats. While there are numerous benefits of SWOT, but it has some major problems as well. It allows the organization to list down the strengths, weakness, opportunities, and threats but it does not enable it to weight it appropriately. The users of SWOT are not in a good position to know the intensity of the one factor in comparison with other.
One more tool, which is used to define and develop strategic advantage, is called the PEST Analysis. PEST stands for the assessment of political, economic, social and, and technological factors. While SWOT analysis is both internal and external, PEST analysis is majorly association with the external factors. PEST allows the organization to develop their strategies based on the external environment. All the organizations exist external environment, and their success is majorly associated with the environment in which it operates. Any misunderstanding of the factors of the PEST analysis can lead it to failure. For example, if a company is working in the Middle East will have to do a regular assessment of the political situation in a country like Lebanon. Many companies will evaluate that the country is not safe for investment; therefore, it might think of exiting the market. This analysis can be used by organizations that enter into the new market and want to create a strategic edge over others. Many western companies are now shifting their investment focus from developed countries to developing countries. While developing countries offer better investment opportunities but the political, economic, social, and technological factors must be evaluated. For example, India is a good option regarding their population base, but the social and political conditions there are entirely different from the West.
References
Birkinshaw, J. M. (2004). Strategic management. Cheltenham, UK: Edward Elgar Pub.
Greer, C. R., Plunkett, W. R., & Plunkett, W. R. (2000). Supervision: Diversity and teams in the workplace. Upper Saddle River, NJ: Prentice Hall.
Pride, W. M., & Ferrell, O. C. (2008). Marketing. Boston: Houghton Mifflin.
Winer, R. S. (2000). Marketing management. Upper Saddle River, NJ: Prentice Hall.
