Positioning Strategies of Firms in South Africa
Charles Blankson, Ph.D.
Department of Marketing & Logistics,
University of North Texas
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Map of Africa
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Introduction and Literature Review
• This study assesses the employment of positioning strategies by
firms (domestic and foreign) in South Africa.
• According to Arnott (1992, 1994), positioning is a strategic concept
that can be operationalized.
• One of the key elements of modern marketing management
(Kotler, 2000).
• It is important in international/global marketing (Johansson and
Thoreli, 1990; Alden et al, 1999) and marketing communications.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Defining the concept of Positioning
• Positioning is defined by Arnott (1992)
as: “…the deliberate, proactive, iterative
process of defining, measuring, modifying
and monitoring consumer perceptions of a
marketable offering…”
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Introduction and Literature Review contd.
• Despite the central role in:
• (a) Modern marketing management, (b) Marketing
communications, and in (c) International marketing,
• Positioning research appears to be prevalent in Western Europe,
North America and Asia (see Park et al., 1986; Muhlbacher et al.,
1991; McAlexander et al., 1993; Alden et al., 1999) to the exclusion
of African markets.
• Development and/or validation of positioning strategies
(typologies) (e.g. Crawford, 1985; Easingwood and Mahajan, 1989;
Kalafatis et al., 2000).
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Introduction and Literature Review
• At the practitioner level:
• Africa has often been neglected in general discussions
about global economy/marketing.
• Despite the continent’s rich natural resources and the
well established firms (domestic and foreign) in mining
and oil, manufacturing, tourism and services in several
parts of Africa – South Africa.
•
Nestle, Toyota, Honda, Mitsubishi, BP, Shell, Microsoft, Anglo-Gold, MNet, Lucent Technologies, First National Bank, Barclays, Standard
Chartered, PZ, CISCO, DHL, Ford, Fiat, Canon etc.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Introduction and Literature Review contd.
• Not surprising:
• Relatively weak economies, few
“homegrown” multi-national businesses,
political instability, lower per capita
income, high infrastructure/transaction
costs, debt dependency and negative
perceptions about governance
(Nwankwo, 2000).
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Introduction and Literature Review contd.
• In recent years:
• (a) following trade liberalization and democratic governance by
some countries,
• (b) influx of foreign capital, FDI and joint ventures and
• (c) the dismantling of apartheid system of government in South
Africa,
• (d) there has been effort on the part of some African governments
(e.g. South Africa) to embark upon development projects, creation
of investment/business climate and image building, i.e.,
positioning.
• Such a climate paves the way for positioning activities by firms
doing business in Africa.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Introduction and Literature Review contd.
• South of the Sahara are underdeveloped,
• South Africa is recognized as an
open/competitive market and a developed
country (Morris and Pitt, 1993; Ross II, 2004).
• It is asserted that positioning activities will be a
priority amongst firms in South Africa, in
search of competitive advantages.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Research Aim and Objectives
• To assess the application of a newly developed
positioning typology using the South African
market as an illustration.
• The objectives are to:
• Identify the positioning strategies employed by
firms in South Africa, and
• Determine the applicability of a newly
developed typology of positioning strategies.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Overall purpose of study
• To assess the applicability of a marketing
framework developed in a Western
business environment (UK) in a
liberalized African economy - South
Africa.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Construct and Measurement
• Due to criticisms raised about extant
positioning typologies,
• It was decided to adopt a newly
developed consumer-derived positioning
typology (Kalafatis and Blankson, 2000,
2001, 2004) and then validate it in the
South African market environment.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Typology of Positioning Strategies
• Top of the range:
upper class, top of the range,
status, prestigious, posh
• Service: impressive
service, personal attention,
consider people as important,
friendly
• Value for money:
reasonable price, value for
money, affordability
• Reliability: durability,
warranty, safety, reliability.
• Attractiveness: good
aesthetics, attractive, cool,
elegance
• Country of origin:
patriotism, country of origin
• The Brand Name:
the name of the offering, leaders
in the market, extra features,
choice, wide range
• Selectivity:
discriminatory in the choice of
customers, non-selectivity, high
principles.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Research Methodology
• Advertisements from two main channels of
firms’ communication were considered (a)
newspapers and (b) radio.
• Based on a convenience sample of
advertisements.
• Television, Bill boards, Leaflets/pamphlets not
obtained due to difficulties in availability.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Analytical Approach
• Content analysis (Holsti, 1969) was employed in
analyzing positioning strategies as evidenced in
ads appearing in newspapers and radio.
• Analysis involved:
• (a) the character (overall meaning),
• (b) nature and purpose of the ad,
• (c) the character of the language in terms of
rhetorical focus, written jargons,
• (d) the social situations and surroundings
displayed in the ad.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Analytical Approach contd.
• Coding procedure based on Frequency system.
• In line with Hugo-Burrows (2004), only
English-based ads were examined and content
analyzed. SA has eleven official languages.
• Content of the ads was coded using the scaleitems of the 8 positioning constructs (typology)
by Kalafatis and Blankson (2004).
• Coding was based on the appearance of any of
the scale-items in a particular ad.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Analytical Approach contd.
• Reliability:
• Reproducibility reliability was employed
via the inter-judge reliability test
(between researcher and a student
judge/checker) revealed 80% agreement
in all cases (Kassarjian, 1977).
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Results (Positioning Strategies from Newspapers)
Positioning
Frequency
Strategies
The Brand
105
Name
Attractiveness 75
Percentage
Rank
Residual
70
1
58.0
50
2
28.0
Value for
money
Top of the
range
Services
47
32
3
.0
38
26
4
-9.0
33
22
5
-14.0
Reliability
Selectivity
33
27
22
18
5
6
-14.0
-20.0
Country of
origin
18
12
7
-29.0
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Results (Positioning Strategies from Radio)
Positioning
Strategies
The Brand
Name
Services
Frequency
Percentage
Rank
Residual
43
52
1
26.1
23
28
2
6.1
Reliability
22
27
3
5.1
Value for
16
money
Attractiveness 13
20
4
.9
16
5
-3.9
Top of the
range
Country of
origin
Selectivity
7
9
6
-9.9
6
7
7
-10.9
5
6
8
-11.9
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Discussion
• Out of the eight positioning strategies investigated in
newspapers:
• (1) The Brand Name and (2) Attractiveness ( =
124.723; df = 7; sig. = 0.000) are the most preferred by
firms.
• Radio:
• Only one strategy (The Brand Name:  = 66.304; df =
7; sig. = 0.000) stands out as the most popular.
“Service”, “Reliability” and “Value for money” are in
second, third and fourth places – and, minimally
pursued.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Discussion contd.
• Emphasis placed upon branding activities and
competitive positioning.
• Positioning strategies in newspapers appear to
be aiming at the middle class target audience.
• Positioning strategies in radio ads appear to be
geared toward the mass market and to an
extent, middle-lower class target market.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Discussion contd.
• Positioning strategies aimed at portraying the attractiveness,
friendly service and affordability are pursued but only second to
the “The Brand Name”
• Firms place less emphasis on strategies depicting
discrimination/selectivity/social class in their positioning.
• Firms also avoid issues surrounding nationalistic sentiments (see
Hugo-Burrows, 2004) in view of the low emphasis on country of
origin and
• Rather firms are bent on all other positioning strategies/activities
that will enhance their brands and competitive positions.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Conclusions
• This research has made an attempt to operationalize a newly
developed typology of positioning strategies.
• Has identified the positioning strategies employed by firms in
South Africa.
• Tentatively, this study lends support to the relevance of the concept
of positioning in the South African market environment.
• It can be concluded that the adopted typology of positioning
strategies (developed in the UK) is relevant/applicable in the
liberalized South African market environment.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Conclusions contd.
• Our attempt answers Radder’s (1996) call for
research into the applicability of conventional
marketing paradigms in liberalized market
environments.
• This study responds to Rwelamila and
Lethola’s (1998) suggestions for further
research to establish whether the conventional
marketing frameworks still apply to the unique
situation of changing market environment such
as South Africa.
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20
Map of South Africa
2006 Winter AMA Conference, St.
Petersburg, FL Feb 17-20