Summary of Marketing Management, 11Ed. Chapter 11

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Philip Kotler, Kevin Lane Keller and Abraham Koshy

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Summary of Marketing Management, 11Ed. Chapter 11

  1. 1. logo copy.tif Positioning: Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market. Positioning requires determining on a frame of reference based on the following factors: 1. Identifying the target market. 2. Analyzing the competition. Crafting the Brand Positioning Chapter 11 Marketing Management By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha SUMMARY by This chapter illustrates how a firm can choose an effective positioning in the market and differentiate its brand. It describes the various strategies a firm can employ at each stage of a products life cycle and finally shows the implications of Market evolution for marketing strategies. Developing and Communicating a Positioning Strategy Category Membership: products or set of products with which the brand competes and which function as close substitutes. Points of Difference (POD): Attributes or benefits consumers strongly associate with a brand, positively evaluate and believe they could not find to the same extent in another brand. Points of Parity (POP): They are associations that are not unique to the brand but in fact maybe shared with other brands. It has two forms: • Category Points of Parity: Associations customers view as essential to a legitimate and credible offering within a certain product or service category. • Competitive Points of Parity: Associations designed to negate a competitor’s points- of-difference. Choosing POPs and PODs POPs: They are driven by the needs of category membership (to create category POPs) and the necessity of negating competitors’ PODs (to create competitive PODs) PODs: The following two criteria are considered while choosing POP’s Desirability Criteria Deliverability Criteria Relevance Feasibility Distinctiveness Communicability Believability Sustainability
  2. 2. Chapter 11 - Crafting the Brand Positioning Establishing category membership The typical approach to positioning is to inform consumers about a brands category membership before stating its points of difference. Initial advertising often concentrates on create brand awareness and subsequent advertising attempts to craft the Brand Image. Differentiating Strategies Competitive Advantages It is a company’s ability to perform in 1 or more ways that competitors can’t match. Two sustainable competitive advantages are: • Leverageable Advantage: is one that a company can use as a springboard to new advantages • Customer Advantage: is an advantage that a customer sees in the company’s offering Dimensions to differentiate Market Offerings • Personnel differentiation: Better trained employees E.g. smartly dresses flight attendants of Kingfisher Airlines. • Channel Differentiation: more effectively and efficiently designed channels, coverage, expertise and performance. • Image differentiation: Companies can craft powerful compelling images. E.g. Marlboro’s “macho cowboy” image. Product Lifestyle Marketing Strategies Most product life-cycle curves are portrayed as bell shaped curves. Straddle Positing: It is a common positioning technique used when a company tries to straddle between two frames of reference. E.g. BMW through a well crafted marketing program straddled ‘Luxury’ and ‘Performance’ as both POD and POP. A company’s positioning and differentiation strategy must change as the product, market and competitors change over the product life cycle (PLC).
  3. 3. Introduction Growth Maturity Decline Characteristics Sales Low Sales Rapidly rising sales Peak Sales Declining Sales Costs High Cost per customer Average Cost per customer Low cost per customer Low cost per customer Profits Negative Rising Profits High Profits Declining Profits Customers Innovators Early Adopters Middle majority Laggards Marketing Objectives Create product awareness and trial Maximize market share Maximize profit while defending market share Reduce expenditure and milk the brand Strategies Product Offer a basic product Offer product extensions, service, warranty Diversify brands and items models Phase out weak products Price Charge cost-plus Price to penetrate market Price to match or best competitors’ Cut price Distribution Build selective distribution Build Intensive distribution Build more intensive distribution Go selective: phase out unprofitable outlets Advertising Build product awareness among early adopters Build awareness and interest in mass market Stress brand differences and benefits Reduce to level needed to retain hard-core loyals Sales Promotion Use heavy sales promotion to entice trial Reduce to take advantage of heavy consumer demand Increase to encourage brand switching Reduce to minimum level Summary of Product Lifecycle Characteristics, Objectives and Strategies Chapter 11 - Crafting the Brand Positioning Trends Market Evolution • Emergence: Before a market materializes it exists as a latent market. Here the entrepreneur has three options: 1. Single Niche Strategy: Design a product to meet preferences of 1 segment of the market 2. Multiple-Niche Strategy: Launch 2 or more products simultaneously to capture 2 or more parts of the market 3. Mass Market Strategy: Design a product for the middle of the Market • Maturity • Decline: Eventually demand for the current products will begin to decrease because either: 1. Society’s total need level declines 2. New Technology replaces the old Maturity: When the competitors cover all major segments of the market maturity stage occurs. Competitors invade each others profits and as market growth slows down, market splits into finer segments and market segmentation occurs. This is often followed by market consolidation caused by the emergence of a new attribute that has greater appeal. Mature markets swing between fragmentation and consolidation.

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