ABSTRACT
In the market place, no company can win if its market offering
resembles every other company’s product. Companies must pursue relevant positioning
and differentiation. As part of branding strategy, a company and its offering
must represent a distinctive big idea in the mind of the target market. Once a
company has decided which segments to enter, it must decide on its
differentiation and positioning strategy, a company can differentiate its
offering between segments and within each segment it can differentiate its
offering from the comp+0-etition. By a creating a differential advantage over
the competition, a company is giving the customer a reason to buy from them
rather than from the competition because a company with a differentiated
marketing strategy can produce more sales. The differentiation concept must be
understood for effective positioning of a company’s offering.
The differentiation and positioning task consist of three steps; identifying a set of possible differentiations
that create competitive advantage, choosing the right competitive advantages,
and selecting an overall positioning strategy. A company may choose to differentiate
its product in terms of durability, price, quality, or in relation to a
competitor. Success in positioning requires a well researched plan.
This research is aimed at identifying the various strategies which
firms can use in other to gain maximum competitive advantages while
differentiating and positioning its product in the market place.
The objective of the study is as follows; to determine the effect of
brand differentiation on a company and on its product, to identify how a
company differentiates and positions its product against that of competitors,
identify the best differentiation and positioning strategy for greater
competitive advantage and to identify whether there is an increase in sales
volume of a well differentiated and positioned product.
The research questions to be adopted in this research work are as
follows; to what extent does
brand differentiation and positioning affect a company and its product? How
does a company differentiate its product from that of competitors? What differentiation
and positioning strategy will give a company maximum competitive advantage? Does
differentiation and positioning increase the sales of a company? The
significance of this research work will be to benefit the company in
identifying the most effective differentiation and positioning strategy for
increasing sales performance.
This research is focused on brand differentiation and positioning for
maximum competitive advantage in the market place using as a case study,
Dangote Noodles limited.
In conducting this research, the survey method, use of questionnaire
to gather data from respondents in some of the departments in Dangote Noodles
Limited Ebute Ikorodu town of Lagos, while the secondary sources of data will
include instruments such as review of past projects, relevant journals, textbooks
and materials from the internet.
TABLE OF
CONTENTS
Certification
Dedication
Acknowledgement
Table of content
CHAPTER
ONE: Introduction
1.1 Statement of the
Problem
1.2 Objective of the
Problem
1.3 Research Questions
1.4 Research Hypothesis
1.5 Significance of the
Study
1.7 Scope and Limitation of
the Study
1.8 Definition of Terms
CHAPTER
TWO: Literature Review
2.1 Historical Background
2.3 Current Literature Based
On the Models
CHAPTER
THREE: Research Methodology
3.0 Introduction
3.1 Restatement of the
Research Question and Hypotheses
3.2 Research Design
3.3 Characteristics of the
Study Population
3.4 Sampling Design and
Procedures
3.5 Data Collection
Instruments
3.6 Administration of Data
Collection Instrument
3.7 Procedures for
Processing and Analysing Collected Data
3.8 Research Limitations
CHAPTER
FOUR: Presentation and Analysis of Data
4.1 Data Analysis
4.2 Presentation of Data
4.3 Testing Of Hypothesis
CHAPTER
FIVE : Summary, Recommendation and Conclusion
5.1 Summary of finding
5.2 Recommendation
5.3 Conclusion
REFERENCES
CHAPTER
ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Branding has been around for centuries as a means to distinguish the
goods of one producer from those of another producer. To firms, brands
represent enormously valuable pieces of legal property that can influence
consumer behaviour, be bought and sold as well as provide the security of
sustained future revenues of their owner. Well- recognized brands make shopping
easier. Brand promotion has advantages for branders as well as customers. A
good brand reduces the marketer’s selling time and effort and sometimes a
firm’s brand name is the only element in its marketing mix that a competitor
cannot copy. Also good brands can improve the company’s image- speeding
acceptance of new products marketed under the same name. Thus branding can be
seen as a powerful means to secure a competitive advantage.
Beyond deciding which segments of the market it will target, the
company must decide on a value proposition, that is, how it will create
differentiated value for targeted segments and what positions it wants to
occupy in those segments. Companies must pursue relevant differentiation and
positioning, each company and its product must represent a distinctive big idea
in the mind of the target market. Given the many brands available in the market
place, a company must carefully consider both the strengths and the weaknesses
of competitors when developing marketing strategy; this is to aid the product
positioning task.
The differentiation and positioning task consists of three steps: Identifying
a set of possible differentiations that create competitive advantage, choosing
the right competitive advantages and selecting an overall positioning strategy.
In essence, product positioning extends market segmentation by defining the
market target that management intends the firm to penetrate. It establishes the
segments at which the firm intends to focus its marketing efforts; this is the
segments where the firm is most likely to have a competitive advantage.
Consumers are overloaded with information about products and services,
to simplify the buying process, consumers organize products, services and
companies into categories and “position” them in their minds. But marketers do
not want to leave their product’s position to chance, therefore, they must plan
positions that will give their products the greatest advantage in selected
target markets and they must design marketing strategies to create these
planned positions.
The key to superior performance is to gain and hold a competitive
advantage. Firms can gain a competitive advantage through differentiation of
their product offering which provides superior customer value or by managing
for lowest delivered cost. These two means of competitive advantage when
combined with the competitive scope of activities (broad or narrow), result in
four generic strategies: differentiation cost leadership, differentiation and
cost focus.
Differentiation strategy involves the selection of one or more choice
criteria that are used by many buyers in an industry. The firm then uniquely
positions itself to meet these criteria. Differentiation gives customers a
reason to prefer one product over another. In order to create a differentiated
position, a firm needs to understand the nature and location of the potential
sources of competitive advantage. The nature of these sources are the superior
skills- distinctive capabilities of key personnel that set them apart from the
personnel of competing firms and the superior resources of a firm- tangible
requirements for advantages that enable a firm to exercise its skills, it
includes the number of sales people in the market, expenditure on advertising
and sales promotion, distribution coverage, expenditure on research and
development, financial resources, brand equity and knowledge. These skills and
resources are translated into a differential advantage when the customer
perceives that the firm is providing value above that of the competition.
The objective of positioning is to create and maintain a distinctive
place in the market for a company and its products, but to compete successfully
in a target market involves providing the customer with a differential
advantage. This differential advantage can be created using the marketing mix;
Product: brands were differentiated based on product performance in
areas of speed, comfort and safety levels, capacity and ease of use or
improving taste or smell. Product development was a cornerstone of corporate
activity, and continual product improvement was an acknowledged objective for
any brand marketer. However, while companies still invest heavily in research
and development and still seek a product performance edge wherever it can be
found, it is a marketing maxim that differences in performance now are often
minimal at best.
Distribution: Lacking meaningful product performance differences,
marketers have traditionally emphasized another marketing resources; wide
distribution coverage and or careful selection of distributor location to
provide convenient purchasing for customers. In other words, products that are
conveniently available will all other things being equal be chosen most often.
Promotion: The most commonly pursued marketing solution lies in the
area of brand communications, advertising and promotions.
At a time when products perform in similar ways when availability
differences are often minimal and when price differentiation may be only
temporary, powerful advertising messages, creatively carving a sustainable and
unique position in the minds of a receptive audience.
Price: Pricing has been another marketing tool often used to establish
differentiation. The challenge, however, is how to “own” a real (or perceived)
long-term price advantage. Short-term offers, deals, and price promotions can
provide a brand an apparent price advantage and the appearance of
differentiation. However, as the acknowledged goal of brand marketing is to
build customer loyalty (i.e. not just trial, but repeat business), a short-term
advantages or a temporary point of differentiation is simply not sufficient.
Sustainable differentiation is required. If the sustainable differentiation is
to be based on price, and is to be owned over time, the marketer must occupy
the “low-cost provide” position. Thus, price as well as product performance is
not what differentiates these brands. So, price is what keeps customers coming
back or keeps them from leaving. The end result of differentiation and
positioning is however, the successful creation of a market focused valued
position.
1.2 STATEMENT OF THE PROBLEM
A wide variety of brands that are similar in performance can make a
company to find its brand in a difficult position in the market place. For
companies, differentiation and positioning are seen as major methods of gaining
competitive advantage over competitors.
The purpose of this research is to identify the various strategies
employed by a company in the differentiation and positioning of its product
that gives it a competitive advantage over competitors.
1.3 OBJECTIVE OF THE STUDY
The study will address the following;
Þ To
identify the effect of brand differentiation on a company and its product.
Þ To
identify the effect of positioning on a company’s product.
Þ To
identify how a company differentiates and positions its brand against
competition.
Þ To
identify the differentiation and positioning strategies that gives the greatest
competitive advantage.
Þ To
identify how differentiation and positioning affect sales of a firm.
1.4 RESEARCH QUESTIONS
Þ Does
differentiation and positioning increases a company’s sales revenue?
Þ Does
competition affect brand preference of consumers of noodles?
Þ Which
of the differentiation strategy gives a company the greatest competitive
advantage?
Þ How
does a firm differentiate it product from that of competitors?
Þ Does
brand differentiation affect a company’s image?
1.5 RESEARCH HYPOTHESIS
Þ H0:
A company’s sales revenue is not affected by its differentiation and
positioning strategies.
H1:
A company’s sales revenue is affected by its differentiation and positioning
strategies.
Þ H0:
Competition does not affect consumer’s brand preference.
H1:
Competition affects consumer’s brand preference.
Þ H0:
Brand differentiation has no impact on a company’s image
H1:
Brand differentiation has an impact on a company’s image.
1.6 SIGNIFICANCE OF THE STUDY
A number of significant changes have occurred over the past several
years to identify the impact of brand differentiation and positioning in the
market place. Brand differentiation and positioning today, has aided companies effectively
enjoying maximum competitive advantage against its competitors in the market
place.
The significance of this study is to benefit both the consumers and
companies in identifying effective differentiation and positioning strategies
that will lead to increase in sales revenue.
1.7 SCOPE AND LIMITATION OF THE STUDY
This research is focused on brand differentiation and positioning for
maximum competitive advantage in the market place.
This research is limited to Dangote Noodles Limited, Ebute Ikorodu a
subsidiary of Dangote Group.
1.8 DEFINITION OF TERMS
BRAND: This is a name, term, sign, symbol or design or a combination
of these that identifies the goods or services of one seller or group of
sellers and differentiates them from those of competitors.
DIFFERENTIATION: This is defined as the act of designing a sort of
meaningful differences to distinguish the company’s product from products of
competitors.
It involves actually differentiating the product to create superior
customer value.
POSITIONING: Is defined as the act of designing the company’s product
and image so that it occupies a meaningful and distinct competitive position in
the target customers mind.
A product’s position is the way the product is defined by consumers on
important attributes; the place the product occupies in consumers mind relative
to competing products.
COMPETITIVE ADVANTAGE: This refers to a company’s ability to perform
in one or more ways that competitors cannot or will not match.
It can also be defined as an advantage over competitors gained by
offering consumers greater value, either through lower prices or by providing
more benefits that justify higher prices.
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