Final answer:
It is true that marketers need to consider both real and perceived distinctions when developing a product positioning strategy. Differentiation can be achieved through a product's physical aspects, location, intangible aspects, and consumer perceptions, which are crucial for standing out in monopolistic competition.
Step-by-step explanation:
When developing a product positioning strategy, it is true that marketers need to consider how consumers view the distinctions between products and analyze whether those distinctions are real or perceived. Differentiated products allow a firm to separate its offerings from competitors' through various means, such as physical characteristics, location, intangible aspects, and consumer perceptions. One of the crucial aspects of this differentiation is understanding whether the value provided is based on actual differences in quality or features (real distinctions) or if the differences are chiefly due to consumer beliefs and perceptions shaped by advertising or brand reputation (perceived distinctions).
Physical aspects of the product, location from which it is sold, intangible aspects such as guarantees and reputation, and perceptions of the product, are all common means of differentiation. In markets with a variety of styles, flavors, and qualities, such as those for clothing, food, and drink, product differentiation gives rise to monopolistic competition. This is contrasted with perfectly competitive markets where products are similar and not differentiated.
Advertising is particularly influential in shaping intangible preferences, often leading consumers to have strong brand loyalties even when they can't tell the difference between products in a blind test. Therefore, when forming a positioning strategy, the marketer's task is to not only present the product's strengths but also to craft a perception that resonates with the target audience, distinguishing the product from the sea of competitors.