Question

Head-to-head positioning is an approach to product positioning that involves

a. Introducing a new product that could pull down the sales of another product by the same firm.
b. Seeking a less competitive, smaller market niche in which to locate a brand.
c. Creating different departments within a company for the same product.
d. Competing directly with competitors on similar product attributes in the same target market.

Answer 1

Head-to-head positioning in product positioning means competing directly with competitors on similar product attributes within the same target market. This can lead to a state of equilibrium with shared market share. It is different from product differentiation but can coexist with practices such as product bundling.

Step-by-step explanation:

Head-to-head positioning is an approach to product positioning where a company competes directly with competitors on similar product attributes in the same target market. This strategy involves Firm A positioning itself close to Firm B, as in the Main Street example, to capture the maximum number of customers. Eventually, after a series of strategic moves by both firms, a state of equilibrium can be achieved where each firm captures a significant portion of the market share.

In contrast to differentiated products, where a firm makes its products stand out through uniqueness in physical aspects, location, intangibles, and perceptions, head-to-head positioning does not necessarily rely on differentiation. Instead, companies will try to match or exceed their competitors in areas such as price and quality within the same space.

A concept that can be complementary to head-to-head positioning is product bundling, which is where a firm sells two or more products together at a better price, such as cable, internet, and a phone line. While bundling can provide advantages, it represents a different strategic approach than head-to-head positioning.