Product positioning and differentiation is a combination of elements of marketing that help in marketing a product. Product differentiation involves setting the product in a way that it is different from the competitors’ product in the market (Kazmi, 2008). This may include a high quality service, after sale service among others that the competitor does not offer.
In product differentiation, a marker tries to answer the question of what will make the consumer purchase his product and leave the others (Kazmi, 2008). On the other hand, product positioning involves the presentation of the product image in the market (Kazmi, 2008). This occurs after product differentiation whereby a product marketer has to place his products well in order to attract customers’ attention and make them buy it.
Product positioning may be in terms of quality, price, and value among others. Normally, product differentiation and positioning are also accompanied by a positioning statement.
This statement tries to highlight both the differentiation and positioning of the product thus making it easy for identification of the product in the market (Kazmi, 2008). Product positioning statement is the third step after differentiation and positioning. Therefore, the three items go together in marketing of a particular.
Blue Cross Blue Shield Insurance Company
Blue Cross Blue Shield is an insurance company in the US. It is located in Texas and provides insurance services particularly in the healthcare sector. It began its operations in Texas and currently has a wide coverage within the state. It has been in the insurance industry for more than 80 years now.
Being one of the largest health insurance companies in the country, it has won various awards due to its outstanding financial service. This has made it a leader in the health insurance industry (Plunkett, 2008).
Product Differentiation
Blue Cross-Blue Shield has engaged in product differentiation in the market. This is aimed at making clients able to differentiate between Blue Cross Blue Shield products from those of their competitors in the market. One way that the company has used to achieve this is through the service quality offered. The company is rated the best in terms of client service (Plunkett, 2008).
This includes physical assistance and in answering calls for clients who are seeking information about the company. Blue Cross Blue Shield Insurance Company has build on this and thus, it does not majorly compete on price.
Therefore, it becomes the company rated among the best in performance despite having a higher price charges for its services than their competitors. Therefore, continuing to build on this aspect will make the company grow in the insurance market at a very high rate.
Another method that used in bringing about product differentiation is on its brand (Plunkett, 2008). When a customer sees a certain product with the label of a company that he knows has superior quality goods, he is well assured that even that new product is also suitable. This is the same method used by the insurance companies in product differentiation strategies in the market.
Blue Cross Blue Shield Insurance Company has won various awards and some related to its strong brand in the insurance market (Plunkett, 2008). Therefore, when a client comes across the company’s product or office, he is assured of a quality service when he gets to visit the office.
Hence, this has made the Blue Cross Blue Shield Insurance Company build their product differentiation on its products in the market. Customers are assured of a quality service when they visit or call seeking assistance.
Brand image is enough to convey a message of exceptional quality service from the company. The company can now continue building on the brand image in the market that will enhance product success in the market.
Product Positioning
The company has a well positioned brand image in the society for the provision of healthcare. The image has made the company be successful in the provision of health insurance services within the United States of America. Every person wants to be associated with a successful company.
Thus, customers are likely to transfer from other insurance agencies to Blue cross Blue shield to seek for medical cover. It was ranked as the best in health insurance in the year 2010 and 2011 (Plunkett, 2008).
This gives a strong base for positioning of the company brand image. The brand image has sold the company into other countries such as Texas, Oklahoma, and New Mexico among others (Plunkett, 2008).
Blue cross Blue Shield Insurance Company has a substantial financial base. This has made it succeed in various insurance products that have been presented by clients (Plunkett, 2008).
It has also given it an excellent base for price competition with other insurance agencies within the economy. Many rival companies try to compete by offering low priced products, but since the company has a strong financial base, it is able to lower the price of its services but not less than that of competitors.
The company also has excellent customer service program (Plunkett, 2008). This has made the customers remain loyal to the company despite its high price for some of the services. The company has a number one response to customer questions.
Clients are assisted in their requests even though the phone. One paramount goal for the company on customer service is to satisfy the customer through the assistance offered in the company (Plunkett, 2008).
Health Partners Insurance Company
This is an insurance company that is concerned with providing insurance services to the communities. The company has an institute of medical education that deals with training of physicians who work on various hospitals and other departments and it is also a research foundation concerned with research for the best curative medicines for various diseases.
The company deals with creating awareness to the community about the health tips and best ways of maintaining quality health. It also has a several number of pharmacy shops within the country that have the mandate of providing reliable drugs to the community (Hill & Jones, 2009).
Product Differentiation
The company has also come up with the health fitness program that has both online services and offline services through their website (Hill & Jones, 2009). The program is known as “silver & fit program.” The program aims at making the people exercise in order to have happy, healthy lives. Members of the public are free to join the group or they can choose to do the exercises at their homes.
Those who join the program should select a club that they are going to partner with and pay a monthly charge of $25 (Hill & Jones, 2009). Health Partners insurance company pays the club and a person can freely visit the place for exercises. This is a new product in the insurance industry. It is aimed at providing health insurance services through prevention method from diseases (Hill & Jones, 2009).
The company has come up with this new product in a way of differentiating its products from other insurance companies that provide insurance covers on the treatment of diseases. This differentiation method will maintain the company in the provision of health insurance scheme. Clients will easily identify the company product as it is aimed at preventing diseases rather than providing insurance for treatment of diseases.
Another method that the company has come up with in trying to differentiate its products is through the introduction of an insurance product that covers thirty diseases on a daily basis. A customer is supposed to identify a clinic that treats thirty common diseases such as cold, urinary infections, sore throat among others (Hill & Jones, 2009).
The insurance cover is only up to $40 per month (Hill & Jones, 2009). An individual will be able visit the clinic on any day to receive medication without charges. This is also another way to look at the medical insurance scheme.
Most insurance schemes provide only one time cover for illness while this cover provides a daily cover for common diseases. The new cover differentiates the company’s product from other products of its competitors. It has a guarantee of being successful in the market with these two differentiated products.
Product Positioning
Health Partners insurance company has also come up with an easy method of positioning these new products in the market. It has set low prices for the new product such that they are easily affordable by many people within the country (Hill & Jones, 2009).
Other companies within the industry are charging higher prices for their products such as Blue cross Blue Shield Company. The latest study shows that more people prefer low cost insurance products than high cost products that are in the market. These company products will be easily identified in the market due to their differentiation and positioning.
Product Positioning Statement
The company has come up with a product statement for its new products in the market. This has been developed from the new products differentiation and positioning.
The product positioning statement states “affordable medical, prescription drug, and dental cover from the top rated. The freedom is yours.” (Hill & Jones, 2009)This statement will easily sell the new products in the market.
Companies’ similarities and differences
There are no similarities in the company products, product differentiation or positioning. Each company has its own method of creating product differentiation and positioning in the market. The two companies are different in the way they create product differentiation and positioning. Blue cross Blue shield insurance company differentiates its product through its services and brand.
On the other hand, Health Partners differentiate their products through the creation of new products that are different from their competitors. The other difference comes in the product positioning where Health Partners position their products in the market by setting a lower price as compared to the competitors’ prices.
On the other hand, Blue cross Blue shield positions its products in the market through its brand image, excellent customer service and a higher price. The last difference is on positioning statement where Health Partners have a product positioning statement. Blue cross Blue shield does not have a product positioning statement for their products.
References
Hill, C. & Jones, G. (2009). Strategic Management Theory: An Integrated Approach. New York: Cengage Learning.
Kazmi, A. (2008). Strategic Management and Business Policy. New York: Tata McGraw-Hill Education.
Plunkett, J., W. (2008). Plunkett’s Health Care Industry Almanac 2009. New York: Plunkett Research, Ltd.