Differentiation and Positioning Strategy 175
The appropriate decline strategy depends on the industry’s relative attractive-
ness and the company’s competitive strength in that industry. Procter & Gamble has,
on a number of occasions, successfully restaged disappointing brands that were com-
peting in strong markets. One example is its “not oily” hand cream called Wondra,
which came packaged in an inverted bottle so the cream would flow out from the bot-
tom. Although initial sales were high, repeat purchases were disappointing.
Consumers complained that the bottom got sticky and that “not oily” suggested it
would not work well. P&G carried out two restagings for this product: First, it reintro-
duced Wondra in an upright bottle, and later, it reformulated the ingredients so they
would work better. Sales then picked up.
If the company were choosing between harvesting and divesting, its strategies
would be quite different. Harvestingcalls for gradually reducing a product’s or busi-
ness’s costs while trying to maintain its sales. The first costs to cut are R&D costs and
plant and equipment investment. The company might also reduce product quality,
sales force size, marginal services, and advertising expenditures. It would try to cut
these costs without letting customers, competitors, and employees know what is hap-
pening. Harvesting is an ethically ambivalent strategy, and it is also difficult to execute.
Yet harvesting can substantially increase the company’s current cash flow.^29
Critique of the Product Life-Cycle Concept
The PLC concept is best used to interpret product and market dynamics. As a plan-
ning tool, this concept helps managers characterize the main marketing challenges
in each stage of a product’s life and develop major alternative marketing strategies.
As a control tool, this concept helps the company measure product performance
against similar products launched in the past. The PLC concept is less useful as a fore-
casting tool because sales histories exhibit diverse patterns, and the stages vary in
duration.
Critics claim that life-cycle patterns are too variable in their shape and duration.
They also say that marketers can seldom tell what stage the product is in: A product
may appear to be mature when it is actually only in a plateau prior to another
upsurge. One final criticism is that the PLC pattern is the result of marketing strate-
gies rather than an inevitable course that sales must follow. For example, when
Borden owned Eagle Brand Sweetened Condensed Milk, its marketing positioned
this mature product as a key ingredient in favorite holiday recipes. When the brand
was sold to Eagle Family Foods, however, the new brand manager was able to boost
sales with an ad campaign educating consumers on the wider range of uses for con-
densed milk.^30 Savvy marketers are therefore careful when using the PLC concept to
analyze their products and markets.
DIFFERENTIATION AND POSITIONING STRATEGY
Companies such as Hewlett-Packard and Priceline.com invest precious resources to
develop and then shepherd their new products through the product life cycle. Yet in
today’s highly competitive global marketplace, a product will not survive—let alone
thrive—without some distinct competitive difference that sets it apart from every
rival product. This is why smart companies rely on differentiation,the act of design-
ing a set of meaningful differences to distinguish the company’s offering from com-
petitors’ offerings. Here we examine how a company can differentiate its market
offering along five dimensions: product, services, personnel, channel, and image
(Table 3.8).