H C A P T E R SEVEN
Differentiation and Positioning
7
McGrawHill/Irwin
2009TheMcGrawHillCompanies, 1-1 AllRightsReserved
Subway
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What is Positioning?
A couple of definitions - Creating distinct and valued physical and perceptual differences between ones product and its competitors, as perceived by the target customer. - The act of designing the firms market offering so that it occupies a distinct and valued place in the minds of its target customers.
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Discussion Question
1. Which words are critical in these definitions? Why? - Creating distinct and valued physical and perceptual differences between ones product and its competitors, as perceived by the target customer. - The act of designing the firms market offering so that it occupies a distinct and valued place in the minds of its target customers.
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Discussion Question
2. What dont we mean by positioning?
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Generic Competitive Strategies Exhibit 7.1
Competitive Advantage
Lower Cost
Differentiation
Broad Target
Cost Leadership Strategy Focus Strategy
Differentiation Strategy Focus Strategy (Differentiation Based)
Competitive Scope
Narrow Target
Source: Adapted from Michael Porter, Competitive Advantage,New York: The Free Press, 1985, p. 12.
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Comparison of Physical and Perceptual Positioning Analysis
Exhibit 7.3
Physical positioning Technical orientation Physical characteristics Objective measures Data readily available Physical brand properties Large number of dimensions Represents impact of product specs and price Direct R&D implications
Perceptual positioning Consumer orientation Perceptual attributes Perceptual measures Need for marketing research Perceptual brand positions and positioning intensities Limited number of dimensions Represents impact of product specs and communication R&D implications need to be interpreted
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Levers to establish positioning
Simple physically based attributes Single physical dimension such as quality, power or size Complex Physically based attributes Concepts like roominess and User friendly Essentially abstract attributes Not directly related to the physical attributes, sexiness of perfume, prestige Price
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Steps in the Positioning Process
Exhibit 7.4 (1 of 2)
1. relevant Identify 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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Features Benefits Parentage Manufacturing Processes Ingredients Endorsements Comparison Pro Environment Price/Quality
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Steps in the Positioning Process
Exhibit 7.4 (2 of 2)
4. Determine products 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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Look for opportunities - Repositioning hard to do - Dont be too confusing (Holiday Inn)
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Discussion Question
3. Whats the tangible output of the positioning process?
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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 marke...