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4.2 Marketing Planning (How organisations can be differentiate themselves…
4.2 Marketing Planning
How organisations can be differentiate themselves & their products from competitors
Form of differentiation
Low/lowest prices
Benefits
Consumers have limited spending power & low prices will always attract a high proportion of them towards the product
Limitations
Will total profit fall if the profit margin is reduced to very low levels?
Do low prices integrate with the rest of the marketing mix?
Could consumers perceive the product/brand to be of low quality too?
Trust
Benefits
Customers are careful to spend their limited incomes wisely & will study each purchase to make sure they're making a 'safe' decision. They want to buy from companies they turst & believe in
Limitations
Trust is difficult for a newly formed business to establish
Trust- and with it, company image - can be damaged greatly by issues such as environmental disasters or a series of poor feedback on social media. It is always difficult to re-establish trust.
Ethical stance
Benefits
In some communities, consumers are very keen to support companies that adopt an ethical stance by purchasing their products. This ethical pproach might lead to higher costs & prices but some customers will 'pay the difference' because they share the company's value.
Limitations
In some amrkets low prices are more important than ethical positions.
lack of genuine ethical position - rather than just an ethical promotion campaign, for example - could lead to a loss of trust if consumers discover that the business was really only adopting a 'window dressing' show of ethical behaviour.
How organisations can be differentiate themselves & their products from competitors
Form of differentiation
Convenience
Benefits
-Consumers' lack of time or dislike of shopping experience means that more convenient ways to browse & purchase could create effective differentiation. (Online shopping, for example)
Limitations
These methods of 'convenient shopping' are now so widespread that it is difficult to gain true, long-lasting differentiation
Product features
Benefits
If these are the result of R&D that leads to patented products or processes, then it can be difficult to competitors to copy of this form of differentiation. As with USPs it can lead to a reputation for innovative, cutting-edge products than can command premium prices
Limitations
R&D is an expensive & time-consuming process & does not always lead to successful innovative products.
Constant development might be needed to stay ahead of competitors so a business needs to continue to commit resources into developing innovative products that differentiate the business & its brands effectively