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Every product has to be marketed to help businesses increase their revenue as well as widen their market base. For that reason, researchers have come to a conclusion that there is need for respective departments to have a full understanding of the different stages of product life cycle to develop the right marketing strategies for a product or service (Kotler & Keller, 2012).
As suggested by Perreault, Cannon & McCarthy, 2011 in the current competitive world of business, organizations need to regularly analyze their products and services in order to improve how they serve their customers.
Relationship between differentiation and positioning
Product differentiation and positioning has been attributed to iconic nature of such firms as Apple Inc., McDonalds, and Coca-Cola among others (Kotler & Keller, 2012).
Product differentiation has been thought of as the inclusion of all types of attributes or characteristics for instance packaging, pricing, quality, design of product, courtesy of those who offer the service or product, product functionality among others in order make the end users to have a perception that the product or service is different and desirable.
An example is products offered to customers by Apple Inc. the company has differentiated their product in numerous ways for instance through sleek designs, functionality, delivery, quality to mention but a few.
Ideally it has been shown that there are five dimensions of differentiating a product or service and they include; product through quality, performance and conformance. Other dimensions include service, personnel, channel and image differentiation (Perreault, Cannon & McCarthy, 2011).
On the other hand, it has been shown that although one might have cleverly differentiated his or her product, failing to position it in the market will counter such efforts. In layman language positioning means how the company positions its products and services in the market (Perreault, Cannon & McCarthy, 2011).
Product positioning is what the firm tells potential buyers about a given product or service. This is accomplished through advertising, sales promotions among others. As in the example previously used, Apple has constantly position its products to be of unmatched functionality, unique design and flawless.
There is no doubt that the two concepts are directly related to each other. Upon deciding on the ways to differentiate the products or services, then how to position the same in the market follows. There is need for the two concepts not to contradict since it will send mixed messages to potential buyers.
Identifying appropriate price strategy
According to Kotler & Keller, 2012 developing an appropriate pricing strategy is more important in the present world of hyper-competition. Pricing strategy has a direct impact on the profits to be made by any business organization. A better pricing strategy should be systematic as well as strategic.
Ideally it is worth noting that pricing strategy should be part and parcel of a firm thus it should be an integral part of marketing plan from the initial stages of product development.
Additionally there are a number of factors that need to be consider while identifying pricing strategies they include; survival of the business, differentiation, maximizing profit margin, maximizing quantity, maximizing short-term revenue, maximizing short-term profit, cost both fixed and variable, positioning and demand curve (Perreault, Cannon & McCarthy, 2011).
Similarly a better pricing strategy is arrived at after carrying out research to establish how much potential customers are willing to pay for a given service or product. Additionally there is need to factor in the issue of distributors, a price that will ensure that distributors make profit will for sure ensure that the firm continue running.
There are various ways to set prices for instance cost-plus, competition-based pricing among others. Researchers have shown that no single pricing method is appropriate and there is need to use a combination of these methods (Kotler & Keller, 2012).
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Kotler, P. & Keller, K. (2012). Marketing management. Upper Saddle River, NJ: Prentice Hall.
Perreault, W., Cannon, P. & McCarthy, E. (2011). Basic marketing: A marketing strategy planning approach. New York, NY: McGraw-Hill Irwin.