1 10 Crafting the Brand Positioning 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? 10-2 Marketing Strategy Segmentation Targeting Positioning 10-3 Positioning Act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market. 10-4 Positioning: Creating Brand Image and Personality 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 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. 10-7 Defining Associations Points-of-difference (PODs) Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand Points-of-parity (POPs) Associations that are not necessarily unique to the brand but may be shared with other brands 10-8 Conveying Category Membership Announcing category benefits Comparing to exemplars Relying on the product descriptor 10-9 There Are Two Positioning Extremes Performance Style 10-10 And BMW Satisfies Both 10-11 Choosing POPs and PODs Relevance Distinctiveness Believability Westin-Stamford Singapore: The World’s Tallest Hotel 10-12 Deliverability Criteria Feasibility Communicability Sustainability 10-13 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 10-14 Addressing Negatively Correlated PODs and POPs Present separately Leverage equity of another entity Redefine the relationship 10-15 Brand Mantras Designing a Brand Mantra Communicate Simplify Inspire Constructing a Brand Positioning Bull’s-Eye Differentiation Strategies Product Personnel Channel Image 10-19 Identity and Image Identity: The way a company aims to identify or position itself Image: The way the public perceives the company or its products 10-20 Product Differentiation Product form Features Performance Conformance Durability Reliability Reparability Style Design Ordering ease Delivery Installation Customer training Customer consulting Maintenance 10-21 Image Differentiation 10-22 Personnel Differentiation 10-23 Channel Differentiation 10-24 Brand Positioning create/maintain a unique representation of the brand in customers’ mind to stimulate choice of that brand positioning = more in the mind than in the market advertising adds value to a product by changing our perception, rather than the product itself creating added intangible value, without changing the product it is not about laboring, engineering, raw material Positioning Effect Pepsi challenge – cola wars “marketing blunder of the century” • • Coca cola underestimated the intangible, symbolic value to the target audience of the original product Coca-Cola executives announced the return of the original formula on July 10, 1985 – after 79 days (April 23 - July10), the originalrecipe Coke was back on the market as “CocaCola Classic.” children’s taste test (3- to 5-year-old) one-quarter of a McDonald's hamburger a Chicken McNugget in a white bag with a McDonald's yellow arches and smile logo on a red background and the words "We love to see you smile" in blue on yellow along the edge in a matched plain white bag 3 ounces of 1% fat milk in a white McDonald's bag with a red arches logo and the phrase Chicken McNuggets in blue the other in a matched plain white bag McDonald's french fries partially wrapped in a white McDonald's wrapper showing the McDonald's logos and the word Hamburger in brown the other wrapped identically in a matched plain white wrapper of the same size and material in a white McDonald's cup with lid and straw in a matched plain white cup with lid and straw 2 "baby" carrots placed on top of a McDonald's french fries bag on top of a matched plain white bag Robinson, T, Borzekowski, D., Matheson, D., Kraemer, H.(2007). Effects of fast food branding on young children’s taste preferences. Archives of Pediatrics & Adolescent Medicine, 161 (8), 792-797 summary “brands” (intangible attributes) may transform “products” (tangible attributes) brands have intrinsic product qualities ABS, high performing engines brands have extrinsic representational qualities (“badge value”) fulfilling emotional and psychological needs wearing a swatch ≠ wearing a rolex brand positions exist in people’s head/hearts marcoms can greatly influence brand positions Product Life Cycle Introduction Growth Maturity Decline 10-31 Facts about Life Cycles Products have a limited life. Product sales pass through distinct stages. Profits rise and fall at different stages. Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each stage. 10-32 Marketing Program Modifications Prices Distribution Advertising Sales promotion Services Panadol’s Ad by Ogilvy 10-33 The Product Life Cycle: Critique Life-cycle patterns are too variable in shape and duration. Marketers can seldom tell what stage the product is in. PLC stage should be a dependent variable which is determined by marketing programs; it is not an independent variable to which companies should adapt their marketing programs. 10-34 Market Evolution Stages (a market-oriented picture of a product/a firm) Emergence Growth Maturity Decline 10-35 Emerging Markets Latent Single-niche Multiple-niche Mass-market 10-36 Developing Value Proposition for Business Markets*) Customers may only look at price, and not listen to your sales pitch *) Anderson, James C., James. A. Narus, and Wouter van Rossum (2006), “Customer Value Propositions in Business Markets, HBR, March. 10-37 Types of Value Proposition 1. ALL BENEFITS Pitfall: Many or even most of the benefits may be Points-of-Parity -- with those of the next best alternatives (competitors) – diluting the effect of the few genuine Points-of Difference. 10-38 Types of Value Proposition 2. FAVORABLE POINTS-OF-DIFFERENCE Answering the question of: “Why should our firm purchase your offering instead of your competitor’s?” Pitfall: Assuming that favorable points of difference must be valuable for the customer. 10-39 Types of Value Proposition 3. RESONATING FOCUS Value Proposition which contains the critical issues in customer’s business, is simple yet powerfully captivating. Superior on few elements that matter most to target customers. Demonstrating and documenting the value of this superior performance, and communicating it in a way that conveys a sophisticated understanding of the customer’s business priorities. 10-40 Distinctive Value Proposition (Resonating Value Proposition) A Point-of-Parity (what customers may mistakenly presume to be a POD favoring a competitor’s offering). Several Points-of-Difference Also: Points-of-Contention (elements where supplier and customer disagree how their performance compares with those of the next best alternatives). 10-41