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More for More. "More-for-more" positioning involves providing the most upscale product or service and charging a higher price to cover the higher costs. Ritz-Carlton Hotels, Mont Blanc writing instruments, Mercedes automobiles, Viking appliances—each claims superior quality, craftsmanship, durability, performance, or style and charges a price to match. Not only is the market offering high in quality, it also gives prestige to the buyer. It symbolizes status and a loftier lifestyle. Often, the price difference exceeds the actual increment in quality.
Sellers offering "only the best" can be found in every product and service category, from hotels, restaurants, food, and fashion to cars and household appliances. Consumers are sometimes surprised, even delighted, when a new competitor enters a category with an unusually high-priced brand. Starbucks coffee entered as a very expensive brand in a largely commodity category. When Apple premiered its iPhone, it offered higher-quality features than a traditional cell phone with a hefty price tag to match.
In general, companies should be on the lookout for opportunities to introduce a "more-for-more" brand in any underdeveloped product or service category. Yet "more-for-more" brands can be vulnerable. They often invite imitators who claim the same quality but at a lower price. Luxury goods that sell well during good times may be at risk during economic downturns when buyers become more cautious in their spending.
More for the Same. Companies can attack a competitor's more-for-more positioning by introducing a brand offering comparable quality but at a lower price. For example, Toyota introduced its Lexus line with a "more-for-the-same" value proposition versus Mercedes and BMW. Its first ad headline read: "Perhaps the first time in history that trading a $72,000 car for a $36,000 car could be considered trading up." It communicated the high quality of its new Lexus through rave reviews in car magazines and through a widely distributed videotape showing side-by-side comparisons of Lexus and Mercedes automobiles. It published surveys showing that Lexus dealers were providing customers with better sales and service experiences than were Mercedes dealerships. Many Mercedes owners switched to Lexus, and the Lexus repurchase rate has been 60 percent, twice the industry average.
The Same for Less. Offering "the same for less" can be a powerful value proposition— everyone likes a good deal. Discount stores such as METRO Cash & Carry and "category killers" such as Dixons, Circuit City, and Sportmart also use this positioning. They don't claim to offer different or better products. Instead, they offer many of the same brands as department stores and specialty stores but at deep discounts based on superior purchasing power and lower-cost operations. Other companies develop imitative but lower-priced brands in an effort to lure customers away from the market leader. For example, AMD makes less-expensive versions of Intel's market-leading microprocessor chips.
Less for Much Less. A market almost always exists for products that offer less and therefore cost less. Few people need, want, or can afford "the very best" in everything they buy. In many cases, consumers will gladly settle for less than optimal performance or give up some of the bells and whistles in exchange for a lower price. For example, many travelers seeking
Price More The same
Price More The same
lodgings prefer not to pay for what they consider unnecessary extras, such as a pool, attached restaurant, or mints on the pillow. Hotel chains such as Ramada Limited suspend some of these amenities and charge less accordingly.
"Less-for-much-less" positioning involves meeting consumers' lower performance or quality requirements at a much lower price. For example, dollar and pound stores offer more affordable goods at very low prices. Warehouse stores offer less merchandise selection and consistency and much lower levels of service; as a result, they charge rock-bottom prices, easyjet and Southwest Airlines also practices less-for-much-less positioning.
From the start, A Southwest has positioned itself firmly as the no-frills, low-price airline. Southwest's passengers have learned to fly without the amenities. For example, the airline provides no meals—just pretzels. It offers no first-class section, only three-across seating in all of its planes. And there's no such thing as a reserved seat on a Southwest flight. Why, then, do so many passengers love Southwest? Perhaps most importantly, Southwest excels at the basics of getting passengers where they want to go on time, and with their luggage. Beyond the basics, however, Southwest offers shockingly low prices. In fact, prices axe so low that when Southwest enters a market, it actually increases total air traffic by attracting customers who might otherwise travel by car or bus. No frills and low prices, however, don't mean drudgery. Southwest's cheerful employees go out of their way to amuse, surprise, or somehow entertain passengers. One analyst sums up Southwest's less-for-much-less positioning this way: "It is not luxurious, but it's cheap and it's fun."
▲ Less for much less positioning: Southwest has positioned itself firmly as the no-frills, low-price airline. But no frills doesn't mean drudgery— Southwest's cheerful employees go out of their way to amuse, surprise, or somehow entertain passengers. ^
A statement that summarizes company or brand positioning—it takes this form: To (target segment and need) our (brand) is (concept) that (point-of--difference).
More for Less. Of course, the winning value proposition would be to offer "more for less." Many companies claim to do this. And, in the short run, some companies can actually achieve such lofty positions. For example, when it first opened for business, the home improvement store B&Q had arguably the best product selection, the best service, and the lowest prices compared to local hardware stores and other home improvement chains.
Yet in the long run, companies will find it very difficult to sustain such best-of-both positioning. Offering more usually costs more, making it difficult to deliver on the "for-less" promise. Companies that try to deliver both may lose out to more focused competitors. For example, facing determined competition from Lowe's stores, Home Depot must now decide whether it wants to compete primarily on superior service or on lower prices.
All said, each brand must adopt a positioning strategy designed to serve the needs and wants of its target markets. "More for more" will draw one target market, "less for much less" will draw another, and so on. Thus, in any market, there is usually room for many different companies, each successfully occupying different positions. The important thing is that each company must develop its own winning positioning strategy, one that makes it special to its target consumers.
Company and brand positioning should be summed up in a positioning Statement. The statement should follow the form: To (target segment and need) our (brand) is (concept) that (point of difference).32 For example: "To busy, mobile professionals who need to always be in the loop, BlackBerry is a wireless connectivity solution that gives you an easier, more reliable way to stay connected to data, people, and resources while on the go."33
Note that the positioning first states the product's membership in a category (wireless connectivity solution) and then shows its point of difference from other members of the category (easier, more reliable connections to data, people, and resources). Placing a brand in a specific category suggests similarities that it might share with other products in the category. But the case for the brand's superiority is made on its points of difference.
Sometimes marketers put a brand in a surprisingly different category before indicating the points of difference. DiGiorno is a frozen pizza whose crust rises when the pizza is heated. But instead of putting it in the frozen pizza category, the marketers positioned it in the delivered pizza category. DiGiorno ads show delicious pizzas that look like anything but a frozen pizza, proclaiming "No calling. No tipping. No kidding. It's not delivery, its DiGiorno!" Another ad claims that DiGiorno "Makes mouths water. And delivery guys weep." Such positioning helps highlight DiGiorno's fresh quality and superior taste over the normal frozen pizza.
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