An alternative perspective on positioning strategies has been suggested by Picardi
(2000). The three main approaches suggested are generic:
1 Attack e-tailing. As suggested by the name, this is an aggressive competitive approach
that involves frequent comparison with competitors’ prices and then matching or bet-
tering them. This approach is important on the Internet because of the transparency of
pricing and availability of information made possible through shopping comparison
sites such as PriceRunner (www.pricerunner.com) and Kelkoo (www.kelkoo.com).
2 Defend e-tailing. This is a strategic approach that traditional companies can use in
response to ‘attack e-tailing’. It involves differentiation based on other aspects of
brand beyond price. It will often be used by multi-channel e-retailers such as
Debenhams (www.debenhams.com) and John Lewis (www.johnlewis.com). Such
retailers may not want to eat into sales from their high-street stores, or may believe
that the strength of their brands is such that they do not need to offer differential
online prices. They may use a mixed approach with some ‘attack e-tailing’ approaches
such as competitive pricing on the most popular items or special promotions.
3 E2E (end-to-end) integration. This is an efficiency strategy that uses the Internet to
decrease costs and increase product quality and shorten delivery times. This strategy
is achieved by moving towards an automated supply chain and internal value chain.
This approach is used by e-retailiers such as dabs.com (www.dabs.com) and E-buyer
(www.ebuyer.com).
The online value proposition
The aim of positioning is to develop a differential advantageover rivals’ products as per-
ceived by the customer. Many examples of differentiated online offerings are based on
the lower costs in acquiring and retaining online customers which are then passed on to
customers – to do this requires creation of a different profit centre for e-commerce opera-
tions. Examples include:
Retailersoffering lower prices online. Examples: Tesco.com (price promotions on
selected products), Comet (discounts relative to in-store on some products);
Airlinesoffering lower-cost flights for online bookings. Examples: easyJet, Ryanair, BA;
Financial servicescompanies offering higher interest rates on savings products and
lower interest rates on credit products such as credit cards and loans. Examples:
Nationwide, Alliance and Leicester;
Mobile phonenetwork providers or utilities offering lower-cost tariffs or discounts for
customers accounts who are managed online without paper billing. Examples: O 2 ,
British Gas.
Other options for differentiation are available online for companies where their prod-
ucts are not appropriate for sale online such as high-value or complex products or FMCG
(fast-moving consumer goods) brands sold through retailers. These companies can use
online services to add value to the brand or product through providing different services
or experiences from those available elsewhere.
In an e-marketing context the differential advantage and positioning can be clarified
and communicated by developing an online value proposition (OVP). Developing an
OVP, involves:
Developing messages which:
reinforce core brand proposition and credibility,
communicate what a visitor can get from an online brand that ...
- they can’t get from the brand offline;
- they can’t get from competitors or intermediaries.
STRATEGY FORMULATION
Differential
advantage
A desirable attribute of
a product offering that
is not currently
matched by competitor
offerings.
Online value
proposition (OVP)
A statement of the
benefits of online
services reinforces the
core proposition and
differentiates from an
organisation’s offline
offering and those of
competitors.