Key Difference – Positioning vs Differentiation
The key difference between positioning and differentiation is that positioning refers to acquiring a space in the mind of the customer whereas differentiation is a marketing strategy companies use to make their product unique to stand out from competitors. The relationship between positioning and differentiation is that differentiation can be used as a positioning technique by companies. Both these are important aspects of marketing and assist companies in generating higher market share, good reputation and long-term success.
What is Positioning?
In marketing, positioning is referred to as acquiring a space in the mind of the customer, which is very important due to many substitutes available in the market. How successfully the company can position itself directly affects profitability and long-term survival of the business. Positioning is mainly done product wise and brand wise.
Different Positioning Strategies in Marketing
Product positioning is the process used to determine how to best communicate product attributes to the target customers based on customer needs, competitor products and how the company wants its products to be perceived by the customers. Product positioning strategies are ways in which the company’s product can be differentiated from the competition.
- Price and quality (e.g.Mercedes Bens)
- Target market (e.g. Johnson’s baby)
- Competitors (e.g. Pepsi)
Brand positioning refers to the rank in customers’ mind the company’s brand possess in relation to the competition. The main purpose of brand positioning is to create a unique impression of the brand in the customer’s mind that makes them desirable to identify, prefer it over competition and consume the brand. Following are a few ways that brand positions strategies can be conducted based on respective attributes.
- Price and value (e.g. Rolls Royce)
- Gender (e.g. Gillette)
- Age (e.g. Disney)
- Cultural symbols (e.g. Air India)
Positioning is of utmost importance with regard to what the company stands for. Thus, the way the company positions the brand and communicate it to the customer should be precise and not confusing. How successfully the company can position itself directly affects profitability and long-term survival of the business.
What is Differentiation?
Differentiation is a marketing strategy companies use to make their product unique to stand out from competitors. According to Michael Porter, industry is less attractive when there are multiple substitutes. Thus, companies continuously attempt to differentiate themselves from the competitors. In order to practice differentiation, the company should have a competitive advantage over similar competitors.
Differentiation Strategy in Marketing
A product or brand can be differentiated based on a number of attributes such as:
- Features – E.g., Volvo
- Performance – E.g., Apple
- Timing – E.g., Zara
- Distribution – E.g., Coca Cola
- Experience – E.g., Starbucks
- Price – E.g., Ferrari
Companies should be rich with resources that are unique and imperfectly imitable (difficult to copy) in order to be successful in differentiation. These resources are often a combination of strong brand name, processes and human capital. Further, it takes a significant time for a company to be successful in terms of differentiation due to the commitment it requires.
What is the difference between Positioning and Differentiation?
Positioning vs Differentiation
|Positioning is referred to acquiring a space in the mind of the customer.||Differentiation is a marketing strategy companies use to make their product unique to stand out from competitors.|
|Positioning is a technique used by all companies based on specific criteria.||Differentiation strategy is adopted by some companies.|
|Success of positioning strategy depends on the nature of the market conditions.||Success in differentiation depends on company’s competitive advantage based on internal resources.|
Summary – Positioning vs Differentiation
The difference between positioning and differentiation mainly depends on whether the company focuses on managing and promoting the company’s products and brand with the intention of acquiring a space in the mind of the customer (positioning) or offering a unique product that has very limited substitutes (differentiation). In the process of this, the company should ensure that the intended positioning and differentiation strategies are communicated to the customers effectively in order to obtain intended results.
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