Page 68 - Marketing the Basics 2nd

60 Marketing: the Basics
Table 3.2 The value proposition matrix
More The same Less
More
More for more
Unsuccessful strategy
Unsuccessful strategy
The same
More for the same
Unsuccessful stratgey
Unsuccessful strategy
Less
More for less
The same for less
Less for much less
SELECTING A POSITIONING STRATEGY
Once the firm identifies its competitive advantages over its competitors, it must select which one or ones to promote to differentiate their product from their competitors. All else being equal, a consumer chooses the product that provides the greatest value. Therefore, positioning a product on the features and benefits that maximizes customer value means the product stands the best chance of succeeding in the marketplace. Marketers define the full positioning of a product as value proposition. Table 3.2 is a model developed by marketing guru Philip Kotler illustrating five successful value propositions and four unsuccessful ones. For the sake of brevity, we will only discuss the successful ones.
MORE FOR MORE
This strategy entails offering the highest quality product at the highest price. This strategy is employed by vendors that position their product as being one that has high quality and provides the buyer high prestige. Haagen Dazs ice cream, Starbucks coffee, Rolex watches are but some examples of products that promise buyers more benefits for more money.
The More-for-More strategy can leave a product vulnerable to competition. If the price differential between the product and the competition is sufficiently larger than the difference in quality offered, eventually consumers choose the firm that offers a value proposition of more benefits for the same price. This means that firms in this market space must be constantly innovating to keep their brand ahead of competition.
Price