Chapter 11Positioning and Differentiatingthe Market Offering Throughthe Product Life Cycleby                              ...
Kotler onMarketingWatch the productlife cycle; but moreimportant, watch themarket life cycle.            www.bookfiesta4u....
Chapter ObjectivesIn this chapter, we focus on the followingquestions:  How can the firm choose and communicate an  effect...
Developing and Communicating    a Positioning Strategy    Positioning    Value position             www.bookfiesta4u.blogs...
Table 11.1: Examples of Value Propositions              Demand States and Marketing TasksCompanyand           Target      ...
Developing and Communicating    a Positioning Strategy   Positioning According to Ries and Trout     Strengthen own curren...
Developing and Communicating    a Positioning Strategy   Treacy and Wiersema propose that a business   should follow four ...
Developing and Communicating    a Positioning Strategy   Positioning: How many ideas to   promote?         Unique selling ...
Can you think of any companiesthat market the same product orservice offering to multiple segmentsusing different strategi...
Figure 11.1: Perceptual Map     www.bookfiesta4u.blogspot.com   11-329
Developing and Communicating    a Positioning Strategy     Theme park’s positioning possibilities:       Attribute positio...
Table 11.2: Method for Competitive-                     Advantage Selection       (1)        (2)               (3)        ...
Adding Further Differentiation  Differentiation    Differentiation criteria:      Important      Distinctive      Superior...
Adding Further Differentiation   Exceed customer expectations with a   three-   three-step process  1. Defining the custom...
Differentiation ToolsFigure 11.2:The BCGCompetitiveAdvantageMatrix               www.bookfiesta4u.blogspot.com   11-334
Table 11.3: Differentiation VariablesProduct         Services         Personnel          Channel       ImageForm          ...
Differentiation ToolsProduct Differentiation  Form  Features             www.bookfiesta4u.blogspot.com   11-336
Table 11.4: Measuring Customer                       Effectiveness Value                    Company Cost        Customer V...
Differentiation Tools  Performance Quality  Conformance Quality  Durability  Reliability  Reparability  Style  Design: The...
The home page for Peapod, the nation’slargest online grocer               www.bookfiesta4u.blogspot.com   11-339
Differentiation ToolsDelivery  Quick response systemInstallationCustomer TrainingCustomerConsultingMaintenanceand Repair  ...
Many e-commerce ventures fail because       e-of distribution problems in the so-called                                  s...
Differentiation Tools  Miscellaneous ServicesPersonnel Differentiation    Competence    Courtesy    Creditability    Relia...
Differentiation ToolsChannel DifferentiationImage Differentiation    Identity    Image  Symbols, Colors, Slogans, Special ...
Which differentiation tool would bemost useful for a dot.com startup?Why?             www.bookfiesta4u.blogspot.com   11-344
Product Life-Cycle Marketing         Strategies   To say that a product has a life cycle asserts   four things  1.   Produ...
Product Life-Cycle Marketing         Strategies Figure 11.4: Cost Product Life-Cycle Patterns                www.bookfiest...
Product Life-Cycle Marketing         Strategies Figure 11.5: Style, Fashion, and Fad Life Cycles                www.bookfi...
Product Life-Cycle Marketing         Strategies Marketing Strategies: Introduction Stage   The Pioneer Advantage     Inven...
Product Life-Cycle Marketing         Strategies Marketing Strategies: Growth Stage   Improve product quality and add new  ...
Product Life-Cycle Marketing         Strategies  Marketing Strategies: Maturity Stage    Market Modification      Expand n...
Product Life-Cycle Marketing         Strategies   Product modification     Quality improvement     Feature improvement   M...
Product Life-Cycle Marketing         Strategies   Marketing Strategies: Decline Stage  1.   Increase firm’s investment (to...
Product Life-Cycle Marketing         Strategies   Product Life-Cycle Concept: Critique           Life- Market evolution   ...
Table 11.5: Summary of Product Life-Cycle          Characteristics, Objectives, and Strategies                  Introducti...
Market Evolution  Diffused-  Diffused-preference market options     A single-niche strategy       single-     A multiple-n...
Market Evolution  Decline  An Example: The Paper-Towel Market                  Paper-Dynamics of Attribute Competition  Cu...
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  1. 1. Chapter 11Positioning and Differentiatingthe Market Offering Throughthe Product Life Cycleby PowerPoint by Milton M. Pressley University of New Orleans www.bookfiesta4u.blogspot.com 11-320
  2. 2. Kotler onMarketingWatch the productlife cycle; but moreimportant, watch themarket life cycle. www.bookfiesta4u.blogspot.com 11-321
  3. 3. Chapter ObjectivesIn this chapter, we focus on the followingquestions: How can the firm choose and communicate an effective positioning in the market? What are the major differentiating attributes available to firms? What marketing strategies are appropriate at each stage of the product life cycle? What marketing strategies are appropriate at each stage of the market’s evolution? www.bookfiesta4u.blogspot.com 11-322
  4. 4. Developing and Communicating a Positioning Strategy Positioning Value position www.bookfiesta4u.blogspot.com 11-323
  5. 5. Table 11.1: Examples of Value Propositions Demand States and Marketing TasksCompanyand Target ValueProduct Customers Benefits Price PropositionPerdue Quality- Quality- Tenderness 10% More tender(chicken) conscious premium golden chicken at consumers of a moderate chicken premium priceVolvo Safety- Safety- Durability 20% The safest, most(station conscious and safety premium durable wagon inwagon) “upscale” which your family families can rideDomino’s Convenience- Convenience- Delivery 15% A good hot pizza,(pizza) minded pizza speed and premium delivered to your lovers good quality door door within 30 minutes of ordering, at a moderate price www.bookfiesta4u.blogspot.com 11-324
  6. 6. Developing and Communicating a Positioning Strategy Positioning According to Ries and Trout Strengthen own current position Grab an unoccupied position De- De-position Re- Re-position Product ladders Positioning According to Treacy and Wiersema Value disciplines Product leader Operationally excellent firm Customer intimate firm www.bookfiesta4u.blogspot.com 11-325
  7. 7. Developing and Communicating a Positioning Strategy Treacy and Wiersema propose that a business should follow four rules for success 1. Become best at one of the three value disciplines. 2. Achieve an adequate performance level in the other two disciplines. 3. Keep improving one’s superior position in the chosen discipline so as not to lose out to a competitor. 4. Keep becoming more adequate in the other two disciplines, because competitors keep raising customers’ expectations. www.bookfiesta4u.blogspot.com 11-326
  8. 8. Developing and Communicating a Positioning Strategy Positioning: How many ideas to promote? Unique selling proposition Four major positioning errors 1. Underpositioning 2. Overpositioning 3. Confused positioning 4. Doubtful positioning www.bookfiesta4u.blogspot.com 11-327
  9. 9. Can you think of any companiesthat market the same product orservice offering to multiple segmentsusing different strategies? Are thedifferent segments beingoffered different valuepropositions? www.bookfiesta4u.blogspot.com 11-328
  10. 10. Figure 11.1: Perceptual Map www.bookfiesta4u.blogspot.com 11-329
  11. 11. Developing and Communicating a Positioning Strategy Theme park’s positioning possibilities: Attribute positioning Benefit positioning Use or application positioning User positioning Competitor positioning Product category positioning Quality or price positioning Which Positioning to Promote? www.bookfiesta4u.blogspot.com 11-330
  12. 12. Table 11.2: Method for Competitive- Advantage Selection (1) (2) (3) (4) (5) Importance of Improving AffordabilityCompetitive Company Competitor Standing and SpeedAdvantage Standing Standing (H-M-L)* (H- (H-M-L) (H-Technology 8 8 L LCost 6 8 H MQuality 8 6 L LService 4 3 H HH=high, M=medium, L=low See text for complete table www.bookfiesta4u.blogspot.com 11-331
  13. 13. Adding Further Differentiation Differentiation Differentiation criteria: Important Distinctive Superior Preemptive Affordable Profitable www.bookfiesta4u.blogspot.com 11-332
  14. 14. Adding Further Differentiation Exceed customer expectations with a three- three-step process 1. Defining the customer value model 2. Building the customer value hierarchy Basic Expected Desired Unanticipated 3. Deciding on the customer value package www.bookfiesta4u.blogspot.com 11-333
  15. 15. Differentiation ToolsFigure 11.2:The BCGCompetitiveAdvantageMatrix www.bookfiesta4u.blogspot.com 11-334
  16. 16. Table 11.3: Differentiation VariablesProduct Services Personnel Channel ImageForm Ordering Competence Coverage Symbols easeFeatures Delivery Courtesy Expertise MediaPerformance Installation Credibility Performance AtmosphereConformance Customer Reliability Events trainingDurability Customer Responsive consulting ness See text for complete table www.bookfiesta4u.blogspot.com 11-335
  17. 17. Differentiation ToolsProduct Differentiation Form Features www.bookfiesta4u.blogspot.com 11-336
  18. 18. Table 11.4: Measuring Customer Effectiveness Value Company Cost Customer Value Customer Value/Customer CostFeature (a) (b) (c=b/a)Rear-Rear-window $100 $200 2defrostingCruise control 600 600 1Automatic 800 2,400 3transmission www.bookfiesta4u.blogspot.com 11-337
  19. 19. Differentiation Tools Performance Quality Conformance Quality Durability Reliability Reparability Style Design: The Integrating ForceServices Differentiation Ordering Ease www.bookfiesta4u.blogspot.com 11-338
  20. 20. The home page for Peapod, the nation’slargest online grocer www.bookfiesta4u.blogspot.com 11-339
  21. 21. Differentiation ToolsDelivery Quick response systemInstallationCustomer TrainingCustomerConsultingMaintenanceand Repair HP’s online support page www.bookfiesta4u.blogspot.com 11-340
  22. 22. Many e-commerce ventures fail because e-of distribution problems in the so-called so-“last mile” (the local distribution portionof shipping of online purchases). Can amarketing plan help offsetsome of these potentialpitfalls? www.bookfiesta4u.blogspot.com 11-341
  23. 23. Differentiation Tools Miscellaneous ServicesPersonnel Differentiation Competence Courtesy Creditability Reliability Responsiveness Communication www.bookfiesta4u.blogspot.com 11-342
  24. 24. Differentiation ToolsChannel DifferentiationImage Differentiation Identity Image Symbols, Colors, Slogans, Special Attributes Physical plant Events and Sponsorship Using Multiple Image-Building Techniques Image- www.bookfiesta4u.blogspot.com 11-343
  25. 25. Which differentiation tool would bemost useful for a dot.com startup?Why? www.bookfiesta4u.blogspot.com 11-344
  26. 26. Product Life-Cycle Marketing Strategies To say that a product has a life cycle asserts four things 1. Products have a limited life. 2. Product sales pass through distance stages, each posing different challenges, opportunities, and problems to the seller. 3. Profits rise and fall at different stages of the product life cycle. 4. Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life-cycle stage. life- www.bookfiesta4u.blogspot.com 11-345
  27. 27. Product Life-Cycle Marketing Strategies Figure 11.4: Cost Product Life-Cycle Patterns www.bookfiesta4u.blogspot.com 11-346
  28. 28. Product Life-Cycle Marketing Strategies Figure 11.5: Style, Fashion, and Fad Life Cycles www.bookfiesta4u.blogspot.com 11-347
  29. 29. Product Life-Cycle Marketing Strategies Marketing Strategies: Introduction Stage The Pioneer Advantage Inventor Product pioneer Market pioneer Figure 11.6: Long-Range Product Market Expansion Strategy (P = Product; M = Market) www.bookfiesta4u.blogspot.com 11-348
  30. 30. Product Life-Cycle Marketing Strategies Marketing Strategies: Growth Stage Improve product quality and add new product features and improved styling Add new models and flanker products Enter new market segments Increase distribution coverage and enter new distribution channels Shift from product-awareness advertising to product- product- product-preference advertising Lower prices to attract next layer of price- price- sensitive buyers www.bookfiesta4u.blogspot.com 11-349
  31. 31. Product Life-Cycle Marketing Strategies Marketing Strategies: Maturity Stage Market Modification Expand number of brand users by: 1. Converting nonusers 2. Entering new market segments 3. Winning competitors’ customers Convince current users to increase usage by: 1. Using the product on more occasions 2. Using more of the product on each occasion 3. Using the product in new ways www.bookfiesta4u.blogspot.com 11-350
  32. 32. Product Life-Cycle Marketing Strategies Product modification Quality improvement Feature improvement Marketing- Marketing-Mix Modification Prices Distribution Advertising Sales promotion Personal selling Services www.bookfiesta4u.blogspot.com 11-351
  33. 33. Product Life-Cycle Marketing Strategies Marketing Strategies: Decline Stage 1. Increase firm’s investment (to dominate the market and strengthen its competitive position) 2. Maintain the firm’s investment level until the uncertainties about the industry are resolved. 3. Decrease the firm’s investment level selectively by dropping unprofitable customer groups, while simultaneously strengthening the firm’s investment in lucrative niches 4. Harvesting (“milking”) the firm’s investment to recover cash quickly 5. Divesting the business quickly by disposing of its assets as advantageously as possible. www.bookfiesta4u.blogspot.com 11-352
  34. 34. Product Life-Cycle Marketing Strategies Product Life-Cycle Concept: Critique Life- Market evolution www.bookfiesta4u.blogspot.com 11-353
  35. 35. Table 11.5: Summary of Product Life-Cycle Characteristics, Objectives, and Strategies Introduction Growth MaturityCharacteristicsSales Low sales Rapidly rising Peak sales salesCosts High cost per Average cost per Low cost per customer customer customerProfits Negative Rising profits High profitsCustomers Few Growing Number Stable number beginning to decline See text for complete table www.bookfiesta4u.blogspot.com 11-354
  36. 36. Market Evolution Diffused- Diffused-preference market options A single-niche strategy single- A multiple-niche strategy multiple- A mass-market strategy mass-Growth Market- Market-growth stage options Single- Single-niche strategy Mass- Mass-market strategy Multiple- Multiple-niche strategyMaturity www.bookfiesta4u.blogspot.com 11-355
  37. 37. Market Evolution Decline An Example: The Paper-Towel Market Paper-Dynamics of Attribute Competition Customer expectations are progressive Approaches to discover new attributes: Customer- Customer-survey processes Intuitive processes Dialectical processes Needs- Needs-hierarchy process www.bookfiesta4u.blogspot.com 11-356

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