MARKETING MANAGEMENT
Crafting the Brand
Positioning
Marketing Strategy
Segmentation
Targeting
*Positioning*
10-2
Chapter Questions
• How can a firm choose and
communicate an effective positioning in
the market?
• How are brands differentiated?
• What marketing strategies are
appropriate at each stage of the
product life cycle?
• What are the implications of market
evolution for marketing strategies?
10-3
Developing and Communicating a
Positioning Strategy
• Positioning: The act of designing the
company’s offering and image to
occupy a distinctive place in the
mind of the target market.
• Value proposition: a cogent reason
why the target market should buy
the product.
10-4
Positioning for Competitive Advantage
• Market positioning: Arranging for a product to occupy a
clear, distinctive, and desirable place relative to
competing products, In the minds of target consumers,
• Formulating competitive positioning for a product, and
creating a detailed marketing mix
• Marketers must:
– Plan positions to give products the greatest advantage
– Develop marketing mixes to create planned positions
typically defined by consumers on the basis of
important attributes.
– Involves & implanting the brand’s unique benefits and
differentiation in the customer’s mind.
10-5
Value Propositions
• Perdue Chicken
– More tender golden chicken at a
moderate premium price
• Domino’s
– A good hot pizza, delivered to your door
within 30 minutes of ordering, at a
moderate price
10-6
Examples of Value Propositions
Company
and
Product
Target
Customers
Diff. Benefits
Price
Value Proposition
Perdue
(chicken)
Qualityconscious
consumers of
chicken
Tenderness
10%
premium
More tender
golden chicken
at a moderate
premium price
Volvo
(station
wagon)
Safetyconscious
“upscale”
families
Durability
and safety
20%
premium
The safest, most
durable wagon
in which your
family can ride
Domino’s
(pizza)
Convenienceminded pizza
lovers
Delivery
speed and
good
quality
15%
premium
A good hot
pizza, delivered
to your door
door within 30
10-7
minutes of
Positioning: example
10-8
Writing a Positioning Statement
– Positioning statement format: “To
(target market and need) our (brand)
is (concept) that (point of difference)”
10-9
Writing a Positioning Statement
Mountain Dew: “To young, active
soft-drink consumers who have
little time for sleep, Mountain Dew
is the soft drink that gives you
more energy than any other brand
because it has the
highest level of caffeine.”??
(www.mountaindew.com;
fun, exhilaration, energy)
10-10
Positioning Errors
• Under positioning:
Failing to really position the brand at all (vague
idea)
• Over positioning:
Giving buyers too narrow image of the brand.
• Confused Positioning:
Leaving buyers with a confused image of the
company.
10-12
Differentiation
• Differentiation: the process of adding a set
of meaningful and valued differences to
distinguish a company’s offering from
competitors’ offerings.
– Differentiation strategies:
•
•
•
•
•
Product
Services
Personnel
Channel
Image
10-13
2. Consumer Goods Classifications
Classified by shopping habits
 Convenience
goods
 Shopping goods
 Specialty goods
 Unsought goods
2. Consumer Goods Classification
2.1 Convenience goods :
 Staples Goods:
Goods consumers purchase on a regular basis
(Toothpast).
 Impulse Goods:
Purchased without any planning or search
efforts (Magazines).
 Emergency Goods:
Are purchased when a need is urgent (umbrellas
during a rainstorm).
2. Consumer Goods Classification
2.2 Shopping goods :
The bases are the suitability quality, price and style
 Homogeneous shopping goods:
Are similar quality but different enough in price to justify
shopping
comparisons.
 Heterogeneous shopping goods:
Offer in product features & services that maybe more
important than
Comparative Between Convenience & Shopping Goods
Shopping Goods
Convenience Goods
Limit Distribution
Convenience Distribution
High Price
Reasonable Price
Low life cycle
High life cycle
Needs planning or search
efforts
Purchased without planning or
search efforts
Selective distribution policy
Intensive distribution policy
Form
Feature
Performance
quality
Durability
Many products can be differentiated in form (Size,
shape, physical structure of a product.
The company should consider how many people want
each feature, how much it would take to introduce each
feature, and think of feature bundles or packages.
Most products are established at one of four
performance levels: Low, average, high or superior.
A measure of the product's expected operating life under
natural or stressful conditions, is a valued attribute for
certain products.
Reliability
Style
Measure of the probability that a product will not
fail within a specified time period.
Describe the product's look and feel to the buyer.
Conformance
Quality
Is the degree to which all the produced units are
identical and meet the promised specifications
Repairability
Is a measure of the ease of fixing a product when it
malfunction or fails.
Services Differentiation:
Ordering ease:
refers to how easy it is for the
customer to place an order with the company.
Delivery:
to how well the product or service is
delivered to the customer.
Installation:
refers to the work done to make a
product operational in its planned location.
Services Differentiation:
Customer training:
refers to training the
customer’s employees to use the vendor’s
equipment properly and efficiently.
Customer consulting:
refers to data,
information systems, and advice services that the
seller offers to buyers.
Maintenance & repair:
describes the service
program for helping customers keep purchased
products in good working order.
Brand Decision
The AMA definition of a brand:
“A name, term, sign, symbol, or
design, or a combination of these,
intended to identify the goods or
services of one seller or group of
sellers and to differentiate them from
the competition.”
Packaging and Labeling
Packaging :
Is all the activities of designing and
producing the container for a product.
Packaging includes:
 The primary package
 The secondary package
 The shipping package
Packaging has become as marketing
tool, well designed packages can
create convenience & promotional
value.
The label may be a simple tag attached
to the product or an elaborately
designed graphic that is part of the
package.
Labeling functions:




Identifies the product or brand
May identify product grade
May describe the product
May promote the product
Legal restrictions impact packaging for
many products.
Warranties & guarantees
Warranties:
are formal statements of expected product
performance by the manufacturer.
Guarantees are most effective in two
situations:
The company or the product is not well know.
The product's quality is superior to the
competition.
Warranties and guarantiees
• Guarantees
1- Reduce the buyer perceived risk.
2- Suggest that the product is of high quality.
3- Company and its service performance are
dependable.
4- Enables the company to charge a higher
price than a competitor who is not offering
an equivalent guarantee.
10-28
Defining Associations
Points-of-parity
Points-of-difference
(PODs)
(POPs)
• Attributes or benefits
• Associations that are
consumers strongly
not necessarily unique
associate with a brand,
to the brand but may
positively evaluate, and
be shared with other
believe they could not
brands
find to the same extent
with a competitive
brand
10-29
Conveying Category
Membership
• Announcing category benefits
• Comparing to exemplars
• Relying on the product descriptor
10-30
Consumer Desirability Criteria for
PODs
• Relevance
• Distinctiveness
• Believability
10-31
Deliverability Criteria for PODs
• Feasibility
• Communicability
• Sustainability
10-32
Examples of Negatively Correlated
Attributes and Benefits
• Low-price vs. High
quality
• Taste vs. Low
calories
• Nutritious vs. Good
tasting
• Efficacious vs. Mild
• Powerful vs. Safe
• Strong vs. Refined
• Ubiquitous vs.
Exclusive
• Varied vs. Simple
10-33
Addressing negatively
correlated PODs and POPs
• Present separately
• Leverage equity of another entity
• Redefine the relationship
10-34
Adding further differentiation
Important
Profitable
Affordable
Preemptive
Criteria
for
Determining
Which
Differences
to
Promote
Distinctive
Superior
Communicable
10-35
•
Important the difference delivers a highly
valued benefit to a sufficient number of buyers.
•
Distinctive the company can offer it in a more
distinctive way.
•
Superior the difference is superior to other
ways that customers might obtain the same
benefit.
10-36
•
Preemptive competitors cannot easily copy the
difference.
•
Affordable buyers can afford to pay for the
difference.
•
Profitable the company can introduce the
difference profitably.
10-37
Differentiation Strategies
Product
Personnel
Channel
Image
10-38
Differentiation Variables
Product
Services
Personnel
Channel
Image
Form
Ordering
ease
Competence
Coverage
Symbols
Features
Delivery
Courtesy
Expertise
Media
Performance
Installation
Credibility
Performance
Atmosphere
Conformance
Customer
training
Reliability
Durability
Customer
consulting
Responsiven
ess
Events
10-39
Product Differentiation ‘Dunkin’ Donuts’
10-40
Product Differentiation
•
•
•
•
•
•
•
Product form
Features
Performance
Conformance
Durability
Reliability
Reparability
•
•
•
•
•
•
•
•
Style
Design
Ordering ease
Delivery
Installation
Customer training
Customer consulting
Maintenance
10-41
Personnel Differentiation:
Singapore Airlines
10-42
Channel Differentiation
10-43
Image Differentiation
10-44
Product Life Cycle
The product life cycle begins when the
company finds and develops a new product
idea. During product development, the
company accumulates increasing investment
costs. After the company launches the
product, sales pass through an introductory
period, then through a period of strong
growth, followed by maturity and eventual
decline. Meanwhile profits go from negative
to positive, peak in the growth or mature
sales stages, and then decline.
10-45
Claims of Product Life Cycles
• Products have a limited life
• Product sales pass through distinct stages
each with different challenges and
opportunities
• Profits rise and fall at different stages
• Products require different strategies in each
life cycle stage
10-46
The Product Life Cycle Concept is
Based on Four Premises:
Products have a
limited life
Profits from a product
vary at different stages
in the life cycle
Product sales pass through
distinct stages, each with
different marketing
implications
Products require different
strategies at different
life cycle stages
10-47
Product life cycle stages:
1.Introduction: A period of slow sales growth as the
product is introduced in the market, profit
nonexistent because of the heavy expenses of
product introduction.
2.Growth: A period of rapid market acceptance &
substantial profit improvement.
3.Matiurity: A slowdown in sales growth because the
product has achieved acceptance by most potential
buyers, profit stabilize or decline because of
increased competition.
4.Decline: Sales show a downward drift & profit
erode.
10-48
Product Life Cycle
10-49
PLC Stages and Characteristics
10-50
Introduction Stage of the PLC
Sales
Low sales
Costs
High cost per customer
Profits
Product
Negative
Create product awareness
and trial
Offer a basic product
Price
Use cost-plus
Distribution
Build selective distribution
Build product awareness among
early adopters and dealers
Marketing Objectives
Advertising
10-51
Growth Stage of the PLC
Sales
Rapidly rising sales
Costs
Average cost per customer
Profits
Rising profits
Marketing Objectives
Product
Maximize market share
Offer product extensions,
service, warranty
Price
Price to penetrate market
Distribution
Build intensive distribution
Advertising
Build awareness and interest in
the mass market
10-52
Strategies for Sustaining
Rapid Market Growth
• Improve product quality, add new features, and
improve styling
• Add new models and flanker products
• Enter new market segments
• Increase distribution coverage
• Shift from product-awareness advertising to
product-preference advertising
• Lower prices to attract the next layer of pricesensitive buyers
10-53
Maturity Stage of the PLC
Sales
Peak sales
Costs
Low cost per customer
Profits
High profits
Marketing Objectives
Product
Price
Distribution
Advertising
Maximize profit while defending
market share
Diversify brand and models
Price to match or best
competitors
Build more intensive distribution
Stress brand differences and
benefits
10-54
Maturity Stage: Strategies
Marketers can extend the life of the brand
by the following methods:
 Market modification: converting nonusers &
entering new market segments.
 Product modification: quality and features
improvements.
 Marketing-mix modification: Price, distribution,
advertising, sales promotion, services.
10-55
Ways to Increase Sales
Volume
•
•
•
•
Convert nonusers
Enter new market segments
Attract competitors’ customers
Have consumers use the product on more
occasions
• Have consumers use more of the product
on each occasion
• Have consumers use the product in new
ways
10-56
Decline Stage of the PLC
Sales
Declining sales
Costs
Low cost per customer
Profits
Declining profits
Marketing Objectives
Product
Price
Distribution
Advertising
Reduce expenditure and milk the
brand
Phase out weak items
Cut price
Go selective: phase out
unprofitable outlets
Reduce to level needed to retain
hard-core loyal customers
10-57
Product in Decline
10-58
Decline Stage: Strategies
• Increasing the firm's investment ( to dominate the
market or strengthen its competitive position.)
• Maintaining the firm’s investment level until the
uncertainties about the industry are resolved.
• Decreasing the firm’s investment level selectivity,
by dropping unprofitable customers, while
simultaneously strengthening the firm’s investment
in lucrative niches.
• Harvesting the firm’s investment to recover cash
quickly.
• Divesting the business quickly by disposing of its
assets as advantageously as possible.
10-59