5.5.2.1.3 Market Differentiation and Positioning
A product‘s position is the place a product occupies in consumers‘ minds
relative to competing products. In modern marketing, these days, the way
consumers define a product makes more difference than the actual
difference which exists between the actual products (Bonoma & Crittenda,
1988). Hence, positioning is generally considered as a fundamental
marketing management decision (Kalafatis et al., 2000) so that it must be
clearly defined and communicated through integrated communications as
business marketers do not typically rely heavily on advertising and
communication to reinforce their messages ( Thorpe & Morgan, 2007).
Similarly, a product differentiation refers to the distinctive difference
perceived by consumers about a given product relative to the competing
products. Hence positioning and differentiation are two sides of a coin.
Through positioning and differentiation, a company states to customers
what the product means and how it differs from current and potential
competing products. In this regard, Doyle (2002) argues that successful
marketing strategies need to be based upon offering superior value to the
targeted customers. Besides, superior value can be based on providing
superior quality (such as performance, service, personnel, and image) or
offering lower priced solutions (Doyle, 2002; Toften & Olsen, 2004).
Furthermore, superior quality is achieved when a niche firm knows the
requirements of customers in the niche better than its broadly based
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competitors, and has the skills to tailor its resources to meeting precisely
the unique needs of this group (Doyle, 2002).
Regarding this, the findings indicate that the efforts made by the case
companies in the domestic market are encouraging. The companies have
made interesting efforts to identify themselves from competing products.
This is evidenced by the key informant in case one saying;
‘’ customers know well our products in the domestic market. When they think
of bed sheets, for example, what comes to their mind is our product. Different
government and nongovernment organizations place orders when they want
textile products like uniform cloths, bed sheets and the like. Hence, our
product has received better image when compared to the competing products
in the local market’’
This claim is also further substantiated by the cross case examination when
respondents refer their own products in terms of some unique features like
quality, neatness, and comfort.
According to the key informant in case five, it is true that the difference exist
more in the customer‘s mind than the real products‘ differences because of
production excellence and raw materials use.
Similarly, the key informant in case four stated that;
‘’ the difference is merely psychological than real. We all use cotton as raw
material for the products and relatively similar technology. However, because
some companies have longer experiences in the international market then they
are perceived as better. And it is this enduring perception that we are trying to
break’’.
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The way in which an organization or a brand is perceived by its target
markets is determined by a number of factors including the product range,
media used, performance, prices, distribution networks, promotion,
customer profiles, word of mouth, and customers‘ experience (Wilison &
Gilligan, 2005). From these factors, the positioning strategies implemented
by the case companies are mostly word of mouth in the local market as the
key informant in case five explained; ‗’people have good attitude about our
product that it is of good quality and usually new customers consult the
existing ones before they decide from which to buy.’’ This implies that the
companies have still more options to use to position their products and
integrating more options can make a better result as customers may prefer
different means of getting information about the product they want to buy.
However, all of the case companies except case company four agree that
they have made little efforts to position their products in the international
markets. In connection to this, the cross case evidence examination
indicates that the international customers know the textile companies by
their generic name called Ethiopian companies not by the companies‘
specific identity.
Only the key informant in case four stated that some international
companies know his company‘s products by the company‘s specific identity
and his products are perceived good as he explained;
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‘’Although we made not enough efforts to promote our products in the
international markets, some customers identified our product as of good
quality with reasonable price. But still the positioning and differentiation
strategies need further improvements by the company individually in addition
to the efforts made by the Ethiopian government’’
Hence, the positioning strategies made by the case companies can be
characterized as fair in the domestic markets but poor in the international
markets. Thus, the textile companies need to focus on getting a fair share of
the customers‘ mind in the international markets if they want to be
competitive. This implies that positioning should be a fundamental element
of the marketing planning process, since any decision on positioning has
direct and immediate implications for the whole of the marketing mix
(Bonoma & Crittenden, 1988). In the same way, the marketing mix can be
seen as the tactical details of the organization‘s positioning strategy. Where,
for example, the organization is pursuing a high-quality position, these
needs to be reflected not just in the quality of the product that is to be sold,
but in every element of the mix, including price, the pattern of distribution,
the style of advertising and the after-sales service (Kalafatis et.al., 2000;
Hooley et al., 1998).
Besides (Hill, 1988) argue that the impact that differentiation has on
demand depends on three major contingencies; the ability of the firm to
differentiate its product, the competitive nature of the product market
environment, and the commitment of consumers to the products of rival
firms. Hence, the marketing managers in the case firms are expected to
know these bases of positioning and capitalize on the one which belongs to
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their firms‘ context specific reality. But it can be generally assumed that the
competitive nature of the textile market is given for granted as fashion
shapes the entire competition these days. In like manner, consumers‘
commitment to compare competing products has become so strong that they
even go to the extent of coproducing their future products. Thus, the ability
of the case firms to differentiate their products remains the controllable but
yet the challenging factor in the international markets.
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