● Product perception: Often the perception of a product is more important
than actual performance. Hopefully, the product has an enduring emo-
tional appeal generating brand loyalty (see Chapter 8). This is commonly
achieved through marketing communications (advertising, branding,
endorsement, etc.) and direct experience of customer groups.
● Product augmentation: We can differentiate by augmenting the product
in a way that adds value. For example, high levels of service, after
sales support, affordable finance and competitive pricing all serve to
enhance the basic product offering. It is common for distributors, such
as retailers, to provide the added-value augmentation. Product aug-
mentation is dealt with in Chapter 9.Focus
The organisation concentrates on a narrower range of business activities. The
aim is to specialise in specific market segment and derive detailed customer
knowledge. This focus, or niche, strategy can also generate the benefits of cost
leadership or differentiation within a defined market segment (see Figure
8.2). For example, it may be possible to obtain cost leadership within a chosen
segment or that segment may regard your product offering as differentiated.
Success within a specialist niche can attract competitors – perhaps much
better resourced. Additionally, the narrow business base means more sus-
ceptibility to downturns in demand from key customer groups.
A focus strategy is based on factors such as:
● Geographic area: Using geographic segmentation allows a product to be
tailored to local needs. The local association may offer the potential to
differentiate the offering (e.g. Champagne comes from a specific French
region) and protect the market from larger predators. Another ration-
ale for such segmentation is to serve markets too small or isolated to be
viable on a large scale (e.g. rural communities).
● End-user focus: It is possible to focus on a specific type of user as opposed
to the entire market. Specialisation offers the opportunity to get ‘close’
to customers and have a better understanding of their needs (e.g. spe-
cialist hi-fi manufacturer). Additionally, within a narrow segment, the
focused organisation may be able to offer the choice, service and
economy-of-scale not available to more broadly based competitors. This
strategy often works by selecting specific points on the price/quality
spectrum within a given market (e.g. discount food retailer).
● Product/product line specialist: The organisation focuses on a single
product type or product line. Value is derived from the specialisation
in terms of skills, volume and range (e.g. industrial power supplies).Consistency and the alternative view
The ‘Porter’ (1980) view of generic strategy supports the need for con-
sistency of approach. The organisation needs to adopt a definite generic
strategy. Attempting to mix the above strategies, within a defined market
place, may result in failing to achieve the potential benefits and result in154 Strategic Marketing: Planning and Control