Q.
a) Define the position of a product in creating a differentiated value for the targeted segment of the market. (5 marks)
b) By focusing on a certain segment of the residential market, explain how the companies could differentiate and position their products for maximum competitive advantage in the market place. (15 marks)
(20 marks, 2012 Q6)
A.
a) Position of a product in creating differentiated value for the targeted segment of market means
"a position of product in the mind of consumer has its distinct value proposition and is most apparent in a market segment where no others are distinctive as it is."
Wikipedia gives a definition of positioning as "identifying and attempting to occupy a market niche for a brand, product or service utilizing traditional marketing placement strategies (i.e. price, promotion, distribution, packaging, and competition)."
Positioning is also defined as the way by which the marketers attempt to create a distinct impression in the customer's mind.
Ref:
Own account and from Wikipedia "positioning" at http://en.wikipedia.org/wiki/Positioning_(marketing)
b) On segmentation, earlier write up has touched on the topic of differentiation and positioning. Refer to the following write up:
Segmentation of Market in past year 2011 Q3:
Take the example of selecting segment below:
- Geography - Property type - Condominium or near work place town houses
- Demographic - Characteristic of people - Graduate in job less than 10 years
- Psychology - Buyer's inner needs - Executive Rank, seeking recognition
- Psychographic - Use situation - small family, young family with baby
- Behavioural - Purchase behaviour - careful planning, waiting to upgrade
With this segment in mind, the company can focus in the marketing mix to cater for the segment above.
Pricing - it would use average segment income as a benchmark to calculate the price of the property. A margin of premium may be added with consideration that these are executive attention seeking individuals and hence would desire a suitable ambient and class of style.
Product type - as segmentation already pointed towards condominium and town houses nearby work place, the developer would package a medium size of 3 rooms condominium with facilities of child care and eateries inside the guarded and gated community, tailored to the security need of young families. A position of affordable price coupled with product features towards high-tech living with internet access would appear attractive to the segment of young executives. The property type also do not need to have gardens or land as the segment of young working executives have no time to take care.
Promotion - road show or advertisement in the newspaper would probably reach this segment group as they are young working executives who reads and share information. Facebook or even cross selling with credit cards and other financial products would attract their attention. As they are active in social media and frequently meet up with friends in restaurants while celebrating children birth days, booths at commercial centres can likely reach to their whereabouts.
Placing - likely an extension from the above, a developer initiated open house party would attract this segment to view the house and buy directly from the developers. This segment of executives are young and able to qualify for long period loan tenure, hence could also packaged with bankers or insurance companies at the counter of banks and insurance firms.
Assuming that the above are all collectively put into one theme - "Smart Home" and position this "e-HOME" for young executive families whose desire for housing is characterized with living secured compound, stylish club with swimming pools, equipped with child care centres, gymnasium and sweat clubs, ladies' hang out pubs, with security and safety. This becomes a distinct position for property developer to come out with such property to cater specifically for this group of buyers.
This shows how positioning could work for better competitiveness and achieve desired objective in a marketing plan for a segment of property products.
Ref:
Own account.