Presentation

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Chapter 10: Crafting the Brand Positioning
Developing and communicating a positioning strategy
• Competitive frames of reference
• Establishing category membership
• PODs and POPs
Differentiation strategies
• Product differentiation
• Personnel differentiation
• Channel differentiation
• Image differentiation
Product life-cycle marketing strategies
• Product life cycles
• Style, fashion and fad life cycles
• Introduction stage
• Growth stage
• Maturity stage
• Decline stage

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Positioning
All marketing strategy is built on STP – Segmentation, Targeting and
Positioning.
Positioning is the act of designing the company’s offering and
image to occupy a distinctive place in the mind of consumers in the
target market.
The goal is to place the brand in the minds of consumers in such a
way as to maximize the potential benefit to the firm.
A good brand positioning helps guide marketing strategy by
clarifying how the brand can satisfy consumers in a unique way – a
customer-focused value proposition.

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Competitive frames of reference
Points-of-difference (PODs)
• Attributes or benefits
consumers strongly
associate with a brand,
positively evaluate, and
believe they could not find
to the same extent with a
competitive brand
Points-of-parity (POPs)
• Associations that are not
necessarily unique to the
brand but may be shared
with other brands
• Can be “category” or
“competitive”
A starting point in defining the competitive frame of reference for
a brand position is to determine category membership (products
or sets of products with which a brand competes and which
function as close substitutes).
Defining associations:

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Establishing category membership
Consumers must often be informed of category membership.
Can be conveyed by:
 Announcing category benefits
 Comparing to recognized members of the category
 Relying on the product description
Choosing POPs and PODs
 Points-of-parity are often driven by the needs of category
membership and the necessity of negating competitors’ PODs
 In choosing PODs, it is important that the consumers find the
POD desirable and that the firm can deliver on the POD.

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Criteria for choosing PODs
There are different levels at which the brand’s PODs can be
anchored:
 Lowest level: Brand attributes
 Next level: Brand’s benefits
 Top level: Brand’s values
Sometimes brands can be differentiated on seemingly irrelevant
attributes if this nevertheless implies benefit for the consumer.
Consumer desirability criteria Deliverability criteria
• Relevance • Feasibility
• Distinctiveness • Communicability
• Believability • Sustainability

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Creating POPs and PODs
• Low-price vs. high quality
• Taste vs. low calories
• Nutritious vs. good tasting
• Effective vs. mild
• Powerful vs. safe
• Ever-present vs. exclusive
• Varied vs. simple
A difficulty in creating a strong competitive brand positioning is
that many of the attributes or benefits that make up the POPs
and PODs can be negatively correlated.
• Consumers rate the brand highly on one particular
attribute/benefit, but rate it poorly on another important
attribute/benefit
• Consumers typically want to maximize both attributes and
benefits (consumers do not like “trade-offs”)
Examples of negatively correlated attributes and benefits:

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Exercises
1. Define in your own words a brand’s
– Attribute
– Benefit
– Value
Exemplify your descriptions with brands, products or services
you know.
2. Discuss the points-of-parity and points-of-difference for the
free newspapers which are becoming increasingly present on
the Danish market. At which level are the PODs anchored?

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Differentiation strategies
Ways of differentiating
• Product (or service) differentiation
– Most obvious, often most compelling
– Many dimensions, typically quality
• Personnel differentiation
– Better trained staff
• Channel differentiation
– Competitive advantage through distribution channel’s coverage,
expertise and performance
• Image differentiation
– Different response to company and brand images
Identity Image
• The way a company aims to
identify or position itself or its
products
The way the public perceives the
company or its products

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Product differentiation
• Product form
• Features
• Performance
• Conformance
• Durability
• Reliability
• Reparability
• Style
• Design
• Ordering ease
• Delivery
• Installation
• Customer training
• Customer consulting
• Maintenance

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Product Life Cycle
A company’s positioning and differentiation strategy must change
as the product, market and competitors change over the product
life cycle (PLC).
There are four stages:
The PLC concept can be used to analyze a product category, a
product form, a product, or a brand.
Note: See Figure 10.2 for 3 common alternative patterns.

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Facts about life cycles
• Products have a limited life.
• Product sales pass through distinct stages.
• Profits rise and fall at different stages.
• Products require different marketing, financial,
manufacturing, purchasing, and human resource strategies in
each stage.
• Note: Like products, markets evolve through 4 stages:
emergence, growth, maturity and decline.

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Style, fashion and fad life cycles
• A style is a basic and distinctive mode of expression
• A fashion is a currently accepted or popular style
• Fashions pass through 4 stages:
1. Distinctiveness
2. Emulation
3. Mass fashion
4. Decline
• The length of a fashion cycle is hard to predict
• Fads are fashions that come quickly into public view, peak
and decline very fast. They do not normally satisfy a strong
need.
• See Figure 10.3

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Marketing strategies in the introduction stage
• Profits are negative or low.
• Promotional costs are at their highest ratio to sales because
of the need to:
– Inform potential consumers
– Encourage product trial
– Secure distribution in retail outlets
• Timing is important. Quick innovation time is essential.
• To be first is rewarding but can be expensive and risky.
• To come in later makes sense if the firm can bring superior
technology, quality or brand strength.
• “Pioneer’s advantage”

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Marketing strategies in the growth stage
Characterized by rapid climb in sales. Early adopters like the product,
and additional consumers start buying it. New competitors enter.
• Prices remain where they are or fall slightly.
• Companies keep promotional expenditures at same or slightly higher
level
• Sales rise much faster than promotional expenditures
• Profits increase
• Manufacturing costs fall faster than price declines
• Strategies to sustain rapid market growth:
– Improve product quality, new features, improved styling
– Add new models and flanker products
– Enter new market segments
– Increase distribution coverage, enter new channels
– Shift from product-awareness advertising to product-preference
advertising
– Lowers prices to attract next layer of price-sensitive buyers
• Trade-off between high market share and high current profits.

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Marketing strategies in the maturity stage
Sales growth slows; a phase which normally lasts a long time and
presents big challenges
• Three phases:
– Growth, but rate starts to decline
– Stable; sales flatten because of market saturation
– Decaying maturity; absolute level of sales declines,
customers begin switching to other products
• Sales slowdown creates overcapacity, which leads to
intensified competition
• A few giants typically dominate and make profit through high
volume
• Many market nichers
• Decision: To become one of the “big three” or follow a niche
strategy

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Marketing strategies in the maturity stage (continued)
Strategies can include:
• Market modification: Expand the market by converting non-users,
entering new market segments, winning competitors’ customers or
encouraging greater use.
• Product modification: Stimulate sales by modifying product
characteristics through better quality, features or style.
• Marketing program modification: Stimulate sales by modifying
other elements:
• Prices
• Distribution
• Advertising
• Sales promotion
• Personal selling
• Services

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Marketing strategies in the decline stage
Sales decline for a number of reasons, including technological
advances, shifts in tastes and increased competition. All lead to
overcapacity, increased price-cutting and profit decrease.
• Strategies may include:
• Increase investment in the product
• Maintain current level until uncertainties are resolved
• Decrease investment by dropping unprofitable
customer groups
• Harvesting the firm’s investment to recover cash
quickly
• Divesting the business as advantageously as possible
• The strategy selected depends on the industry’s relative
attractiveness and the company’s competitive strength in the
industry.

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Exercise
1. Discuss the current life cycle stage of the following:
• CD
• DVD
• Amazon.com
• Google
2. Discuss the observed marketing strategy for one of the following
products:
• Coca Cola Zero
• Gillette Fusion