Transcript Marketing Management - - Alpha International AcademyAlpha

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Differentiation
and
Positioning
McGraw-Hill/Irwin
©2008 The McGraw-Hill Companies,
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All Rights Reserved
What is Positioning?
The place a product or brand occupies in
customers’ minds relative to their needs
Refers to competing products or brands
Comprises both competitive and
customer need considerations
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Differentiation
Differences in scope–Broad or narrow
competitive scope
Different ways in which companies can
compete for target markets
Differentiation in Business Strategies
Differentiation among Goods and Services
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Exhibit 7.1
Generic Competitive Strategies
Competitive Advantage
Lower Cost
Differentiation
Broad Target
Cost
Leadership
Strategy
Differentiation
Strategy
Narrow Target
Focus
Strategy
Focus Strategy
(Differentiation
Based)
Competitive
Scope
Source: Adapted from Michael Porter, Competitive Advantage,New York: The Free Press, 1985, p. 12.
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Physical and Perceptual Positioning
Physical positioning
Assessing product offering based on a set of
objective physical characteristics
Perceptual positioning
Includes product presentation, past
experiences and opinion of others
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Exhibit 7.3
Comparison of Physical and
Perceptual Positioning Analysis
Physical Positioning
Perceptual Positioning
Technical orientation
Consumer orientation
Physical characteristics
Perceptual attributes
Objective measures
Perceptual measures
Data readily available
Need for marketing research
Physical brand properties
Perceptual brand positions and
positioning intensities
Large number of dimensions
Limited number of dimensions
Represents impact of product
specs
Represents impact of product
specs and communication
Direct R&D implications
R&D implications need to be
interpreted
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Kinds of Attributes
Simple physically based attributes
Directly related to a single physical
dimension
Complex physically based attributes
Used by consumers to evaluate competitive
offerings
Essentially abstract attributes
Are influenced by physical characteristics,
but not related in any direct way
Price
Implies high or low quality
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Exhibit 7.4 (1 of 2)
Steps in the Positioning Process
1. Identify relevant set of competitive
products serving a target market.
2. Identify the set of determinant attributes that define
the “product space” in which positions of current
offerings are located.
3. Collect information from a sample of
customers and potential customers about
perceptions of each product on the
determinant attributes.
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Exhibit 7.4 (2 of 2)
Steps in the Positioning Process
4. Determine product’s current location
(positioning) in the product space and intensity
thereof.
5. Determine customers’ most preferred
combination of determinant attributes.
6. Examine the fit between preferences of
market segments and current position of
product (market positioning).
7. Write positioning statement or value
proposition to guide development and
implementation of marketing strategy.
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Tools used to understand the
positioning of products
Positioning grid
Also called perceptual maps
Value curve
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Perceptual Map of Women’s Clothing Retailers
in Washington, D.C.
Washington 1990 Women’s fashion market
Women’s-wear fashionability
Conservative versus current versus very latest
The Limited
Neiman Marcus
Macy’s
Saks
Bloomingdale’s
Nordstro
m
Hit or Miss
Dress Barn
Casual corner
Garfinkels
Sassafras
The Gap
Marshall’s
Hecht’
s
L&T
Britches
Kmart
T.J. Maxx
Sears
JC Penny
Loehmann’s
Woodwar
d
&
Lothrop
Talbots
Worst value
Women’s-wear value for the money
Best value
Source: Adapted from Douglas Tigert and Stephen Arnold, “Nordstrom: How Good Are They?” Babson College Retailing Research Reports,
September 1990. as shown in Michael Levy and Barton A. Weitz, Retailing Management (Burr Ridge, IL: Richard D. Irwin, 1992) p. 205.
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Guiding Development of Marketing
Strategy
Two common approaches:
Positioning statement
Identifies the target market
States unique benefits of the product
Value proposition
Similar to positioning statement
Includes information about pricing relative
to competitors
Both approaches reflect the unique
selling proposition (USP) of the
product
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Positioning Statement for Volvo in
North America
For upscale American families, Volvo is the
family automobile that offers maximum
safety
Generic format for positioning statements:
For (target market), (brand) is the (product
category) that (benefit offered)
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Value Proposition for Volvo in
North America
Target market: Upscale American families
Benefits offered: Safety
Relative price: 20% premium to domestic
family cars
Generic format for value propositions:
Target market
Benefits offered (and sometimes not
offered)
Relative price
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Some Key Questions
Concerning Positioning Decisions
For whom are they written?
In what sort of language?
Should they focus on features or
benefits?
How many differentiating attributes
should anchor them?
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A Useful Tool for Positioning
Decision Making: Perceptual Maps
Not Sweet
Sweet
Nutritious
Not Nutritious
Where would you plot your favorite cereals?
Your kids’ favorites? Your grandma’s?
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