It is believed that there is considerable room for a competitor to target the student market with a lower-priced but also feature-rich device.
The mainstream player in this market is the humble cell phone. Popular phones such as the Motorola Razr have camera functions, and new phones are being introduced with mp3 players and other technology. It appears as though there is some degree of technological convergence happening between cell phones and PDAs/Smartphones. The result is that the Sonic 1000, compared with these devices, is a superior product. Yet its pricing is fairly competitive relative to the new wave of feature-rich cell phones. This leads to the following positioning statement for the Sonic 1000:
"The Sonic 1000 is a portable device that will replace the cellphones of the past with the integrated, feature-rich smartphone of the future. Competitive priced, the Sonic 1000 will appeal to students who want a well-made phone with all the features they love, but at a price they can afford."
Kotler and Keller argued that a positioning statement should focus on competitive frames of reference, points of difference, points of parity and establishing and communicating category membership. This positioning statement for the Sonic 1000 meets all of those criteria. The two competitive frames of reference are both implied in this statement. Implication in this case is acceptable for a couple of reasons. The first is that the consumer is savvy about these products; the second is that it leaves the door open to address new competitors in the market. The cellphones that dominate the low end of the student market (or the student mass market, to view it another way) are framed deliberately as stale technology. The issue of price is raised twice, highlighting that relative to the main smartphone competitor in the student market, the Sonic 1000 is taking a cost leadership position.
The positioning statement highlights points of difference. The technology difference between the Sonic 1000 and cell phones is highlighted ("feature-rich"). The price difference with the iPhone is also highlighted ("a price they can afford"). In highlighting these two differences, the Sonic 1000 is positioned clearly between two established competitors. Porter's generic strategy theory argues that this is a bad tactic, but the Sonic 1000 makes the case for this positioning in the current marketplace with the phrase 'the cellphones of the past." Sonic is positioning itself more with an eye to the future, in which it sees cell phones as a declining technology. The vision of the Sonic's positioning a few years down the road is of a two-product universe, not the three-product universe that currently exists in the student market.
The points of parity are also highlighted. The second clause identifies the Sonic 1000 as having "the features they love," implying a consistency of features with the iPhone. The point of parity with the cell phone is stated less explicitly. By portraying the cell phone as a technology of the past, it is implied that the Sonic 1000 -- no matter who it compares cost-wise with cellphones -- is a better value. While this implication can be considered weak, the Sonic vision of a two-product universe precludes the need for excessive comparison with cellphones.
Category membership is clearly defined with the multiple references to both features and price. The positioning statement is explicit that the Sonic 1000 is a smartphone. The positioning statement is also explicit about the target market, naming students directly. Put together, the positioning statement clearly identifies the Sonic 1000 as a low cost smartphone for students, while highlighting the points of difference with competing products and the points of parity with the aspirational product (the iPhone) and simultaneously creating aspiration for the Sonic 1000 among cell phone users.
4. One of the biggest reasons why Sonic must compete as a low cost producer is because the company does not have a strong brand with which it can charge premium prices for its product. Indeed, its main competitor Apple thrives on the power of its brand. Apple, however, has been building its brand since the 1970s, while Sonic is a new product. The process of building the Sonic brand begins now. Over time, Sonic will need that brand to fend off generic competitors once the smartphone market becomes commoditized. Only a handful of domestic technology players remain in part because of the commoditization affect and the inability of most competitors to develop a strong brand.
Initially, the Sonic brand must be developed around the company's value...
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