Differentiating, positioning, and branding Differentiating Positioning MARKETING Branding The act of distinguishing your company's offering from competitors' offerings in ways that are meaningful to consumers Determining and communicating the central benefit of the product in the minds of target buyers. A product brand is a name, term, sign, symbol, or design—or any combination of these—that identifies the offering and differentiates it from those of competitors.
Differentiation Product’s physical distinctions Product’s service distinctions
You must “reserve” a particular word in the mind of potential consumer.
Two distinct companies can’t “reserve” the same word in the mind of potential consumer
If you admit a defect , the potential consumer will assign you a quality
Each attribute has an opposite that can be very effective
Product Lifecycle Product Introduction Product Growth Product Maturity Product Decline Low sales, high cost per customer, no profits, few competitors Create product awareness and trial
Offer a basic product
Use heavy promotions to entice trial
Marketing Objectives Market Strategies Rising sales and profits, more and more competitors Maximize market share
Offer product extensions Reduce promotions due to heavy demand
Peaking sales and profits, stable or declining number of competitors Maximize profit while defending market share Reduce expenditure and "milk" the brand Declining sales, profits, and number of competitors
Phase out weak products
Cut price; reduce promotion
Intensify promotion to encourage switching to new brands
If the test-marketing results are positive start to produce and distribute it
Test-Marketing Consumer Goods Sales wave Let some consumers try the product at no cost. Then re-offer the product, or a competitor's product, at slightly reduced prices. See how many customers choose your product again, and gauge their satisfaction with it. Simulated test marketing Ask a number of qualified buyers to answer questions about their product preferences. Then invite them to look at a series of commercials or print ads that include one for your new product. Finally, give them some money and set them loose in a store. See how many of them buy your product. Controlled test marketing Place your product in a number of stores and geographic locations that you're interested in testing. Test different shelf positions, displays, and pricing. Measure sales through electronic inventory control systems. Test-market This is test-marketing on a grand scale. Select a few representative cities, get your sales force to give the product thorough exposure in those cities, and unleash a full advertising and promotion campaign. See how well the product sells.
Test-Marketing Business Goods Alpha testing Build a few units of the new product. Ask your most important and friendliest customers to try the product for free and comment on its functionality, features, and problems. Beta testing Similar to alpha testing, but it is done in the product-development process—when the product is close to be finalized. Trade show exhibits Observe how much interest participants show in the product, how they react to various features, and how many express clear intention of buying the product
…“ Customers are more receptive to value, not to price. When they buy judging by price, they do it because they do not see significant differences between high price products with and low price products.”
Online Marketing Advantages Advertising Limited amount of information; uses traditional channels: TV, radio, press Marketing activities Traditional Marketing Cyber-Marketing High amount of information available on company’s websites and also on other websites Client service Available 8 hours a day, 5 days a week, as an answer to clients requests; maintenance and training face to face only Available 24 hour a day, 7 dais a week; offers solutions by phone, fax or e-mail; fixes problems from distance, through automatic diagnose Sales Direct contact (visit) or by phone with potential clients Video-conferences with potential clients; on-line demonstrations/ presentations of the products Market Research Individual interviews, focus groups; telephone and mail surveys Online newsgroups for interviews and discussions; online / by e-mail questionnaires
Relationship Marketing may imply a serious risk – consumer irritation
How to avoid/correct this problem?
See through consumers' eyes
Regain customers' trust
Build honest relationships
Customer Perception - Examples "Too many companies want personal relationships with me!" Marketing advances seem trivial, useless, or annoying. Consumers' interest in relationship building evaporates. Customer Perception Result "Companies want my friendship, loyalty, and respect—but they're not giving me those same things in return!" Consumers see marketing as a "one-way street" that benefits companies only "Companies treat their best customers like kings and queens—and ignore the rest of their customers!" Loyal customers feel devalued. Customers feel overwhelmed and paralyzed. "Companies offer too many options—I can't keep them straight in my mind!"
PR vs. Advertising Advertising became irritating and has no credibility; the more companies try to sell, the more customers reject the message PR is credible; customers accept the message as helping and impartial Advertising is spatial (involves many channels and resources); but after the campaign is over, the return is tot as attractive as expected PR is a linear (step by step) and long term process, which consolidates the brand value and the customer loyalty. Advertising is addressing to everybody PR is addressing to somebody in particular Advertising is oriented to itself PR is oriented to others
PR vs. Advertising Advertising is costly PR does not involve high costs Advertising encourages existing product lines extension PR encourages new brands Advertising does not need to be creative; it has to work with ideas already present in consumer’s mind (due to PR) PR is creative Advertising is visual PR is verbal Advertising is funny PR is serious Advertising dies PR lives