Page 70 - Marketing the Basics 2nd

62 Marketing: the Basics
SAME FOR LESS
This strategy is used if the firm wants to build market share. Positioning a product that offers the same benefits for a reduced price is one of the oldest strategies in business. In the IBM-compatible mainframe marketplace there are two competitors: IBM and Fujitsu. Part of Fujitsu’s offer is that they are just as good as IBM, you can roll out your IBM mainframe and roll in the Fujitsu equivalent and your software will run just the same, but Fujitsu is considerably less expensive. If the offering can be sustained, eventually, it will force the competition to exit the market. There is perhaps no industry other than the retailing industry that has been so radically affected by firms employing the same for less strategy. Firms such as Carrefour, Wal- Mart and other big box stores, build airplane-hangar sized stores, filling the shelves with nearly every consumer product imaginable at prices that no other smaller competitor can match for sustained periods of time. It is no wonder why these big-box stores are called category killers.
LESS FOR MUCH LESS
This strategy is similar to the strategy above in that the vendor is attempting to undercut its rivals. However the firm cannot match the benefits offered to the customer, so the vendor therefore reduces the price to a level low enough to entice consumers to switch. No one can resist a deal, it’s just a matter of finding the right price. Many customers are perfectly happy to have a ‘bare bones’ product for much cheaper, they just don’t need the functionality that others do. Students often find themselves in this segment. Dollarama has built their retail model on this very concept. Almost everything your heart desires can be found under this roof, from toys and pet foot to kitchenware and cards. And just as the store name suggests, everything can be bought for $1!
COMMUNICATING THE POSITIONING
Once the positioning of the product has been established, the firm must develop a positioning statement which they will centre their promotion campaign around. A typical positioning statement takes the form: