The paper under review today discusses the particulars of product differentiation and positioning. Using real-world examples and analysing the business strategies of fast food chains (namely Burger King and McDonald’s), the authors were able to isolate some larger universal rulesets that apply to managing competition and developing a successful brand identity. The balance between product differentiation and product positioning is different for each business. For those organizations that are already well-liked and well-regarded by the public, there are two primary pathways to success: focus on providing services similar to other competitors while working on product differentiation, or develop a specific niche that sets a product or the brand apart from others. The pathway that a company chooses depends entirely on how successful they already are, the size of the market they work within, and who their competition is. This is shown with the example of McDonald’s, who radically alter their business approach depending on the size of the market and the potential target demographic (Thomadsen, 2007). If there is no room to gain an advantage over businesses like Burger King and secure a wholly dedicated customer base, McDonald’s prefers to station itself close to Burger King. This decision is made with the knowledge that McDonalds is successful enough and profitable enough to handle direct competition, while also being distinctive in its product line, making people choose it over Burger King.
Burger King is taken as an example of a less aggressive business, one that focuses on preventing competition from becoming a problem by potentially avoiding most instances where it would be placed together with McDonald’s it chooses to escape direct competition, instead placing itself closest to the best revenue channels and working along organizations of different specialties. A similar comparison is made at the end of the paper, where the authors talk about mp3 players and iPods. The Apple company has the security of working alongside its competition, as in cases where the lineup of potential features is similar, a substantial part of buyers would choose an Apple product. The Apple brand has a strong public image, a good reputation and a significant amount of devoted buyers (Thomadsen, 2007). Therefore, it is able to dominate common niches as long as it keeps up with the minimum requirements set by the music player industry as a whole. In addition, it can also afford to let itself be understood as completely separate from other competitors, by introducing innovative or highly specific products.
Other mp3 player brands, on the other hand, have to always work to avoid competition and build up their own unique identity. Without a list of features that make them preferable to an Apple product, they are not strong or recognizable enough to compete. Offering unique features, creating a brand identity through marketing, or occupying a completely different price range – all of these tactics can be used to succeed over an iPod product.
Real-World Examples
A good real-world example would be various amusement parks. The Disneyland line of amusement parks is well-known by audiences. Their selection of rides, customer service, incorporation of various Disney-owned properties and the overall commitment to creating an enjoyable experience for their visitors gives them a strong seat on the market. In addition, Disney has the privilege of being the biggest company in the world and one of the most recognizable brands around the globe. In order to succeed, Disneyland locations can take advantage of good customer channels and build their locations close to other amusement parks. The already-established brand reputation and a selection of services that are unique to the brand allow it to succeed in the face of direct competition. Other brands such as Universal Studios, however, need to rely on finding market locations that are far away from Disney. In addition, they have to utilize their brand recognition and characters in order to attract people. For example, a major selling point for Universal Studios Orlando is that the park has Harry Potter-themed rides and decorations (“Disney vs. universal,” 2022). This, and similar differences allow the park to attract people that want a specifically Universal-focused experience, instead of a simple theme park experience.
Main Message for the Audience
The main message that the makers of the paper wanted the audience to walk away with is that there are different pathways to commercial success. Depending on the capabilities of a business, its size, its niche and its competition, the preferred market entry and business strategies change. Taking the examples of music, fast food and amusement parks, it becomes easier to see that brands with established sense of character and individuality can afford to face direct competition. McDonalds and Apple thrive in opposition to brands with a similar set of features, allowing them to divert revenue channels from other companies and become more successful. On the other hand, smaller businesses and companies with a different set of strengths may want to avoid competition altogether, instead focusing on their product positioning.
References
Disney vs. universal. (2022). Orlandovacation.com. Web.
Thomadsen, R. (2007). Product positioning and competition: The role of location in the fast food industry. Marketing Science, 26(6), 792-804. Web.