In our last edition, we looked at how a business can stand out from its competitors and be differentiated using its product – one of the four Ps of the Marketing Mix.  In this segment we will look at differentiation based on two other Ps – price and place.

Price can be defined as the cost consumers pay for a product and you may decide to differentiate your product based on the price in various ways.

One of the ways is by charging low prices compared to your competitors; or charging premium prices, implying that a product is a luxury item, like a Rolls Royce or a Mercedes Benz in the automobile market.

An example of low-price strategies are quick service restaurants not unlike Kilimanjaro or Chicken Republic. These fast-food restaurants clearly target the working class who want a meal that won’t ‘break the bank’. This differentiation strategy has led to most of these restaurants being largely successful, spawning a chain of outlets in major cities across the country within short period of time.

Another illustration of price differentiation is Wakanow; it lets you compare airline prices across a number of brands and then enables you to pay at small while allowing you to lock in the price. This is something that hitherto did not exist in the travel industry.

If on the other hand your  brand aims to be  a high quality, luxury brand that is targeted towards the  high-end market segment, your prices will reflect that. 

Let’s look at the Apple or iPhone. It is priced relatively higher than other similar products within its industry, so you can say that it is targeted at a certain niche audience who are not price sensitive. For them, the latest iPhone is a must-have irrespective of the price.

Brands can also charge different segments different prices for the same product. For instance, an airline that has several classes of travel – First, Business and Economy Classes or a bank that offers private banking, institutional banking, and retail banking to different consumer groups; Each at different price points and entry levels.

The next differentiation strategy is Place – this involves making a product conveniently accessible to potential customers. The goal is to get the products in front of the consumers that are the most likely to buy them.

In some cases, this may refer to placing a product physically in stores, but it also refers to online channels of service.

For example, Jumia is making buying more convenient for customers by making thousands of products directly available on its online store, just like Amazon.

Another company that is differentiated by place is Slot, the leading retailer of the latest mobile phones, accessories, and various types of mobile devices. It offers its products through physical locations and an e-commerce store.

The shops are also designed to  provide great customer service, after-sales service, and other value-added services, which is something that most of its competitors are not able to offer. This has turned them into one of the market leaders in Nigeria today.

Differentiated companies are profitable companies. It  gives your customers a reason to choose you instead of the competition.

Vanguard News