Marketing Management By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha logo copy.tif SUMMARY by Chapter 11 Crafting the Brand Positioning 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.Positioning:Positioning is the act Developing and Communicating a Positioningof designing the Strategycompany’s offering Category Membership: products or set of products with which the brandand image to occupy competes and which function as close substitutes.a distinctive place inthe minds of the Points of Difference (POD): Attributes or benefits consumers stronglytarget market. associate with a brand, positively evaluate and believe they could not find to the same extentPositioning requires in another brand.determining on a Points of Parity (POP): They are associations that are not unique to the brandframe of reference but in fact maybe shared with other brands. It has two forms:based on the • Category Points of Parity: Associations customers view as essential to a legitimate and credible offering within a certain product or service category.following factors: • Competitive Points of Parity: Associations designed to negate a competitor’s points- 1. Identifying the of-difference. target market. 2. Analyzing the Choosing POPs and PODs POPs: They are driven by the needs of category membership (to create category POPs) and the competition. 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
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:Straddle • Leverageable Advantage: is one that a company can use as a springboard to new advantagesPositing: • Customer Advantage: is an advantage that a customer sees in the company’s offeringIt is a commonpositioning techniqueused when a Dimensions to differentiate Market Offerings • Personnel differentiation: Better trained employees E.g. smartly dresses flightcompany tries to attendants of Kingfisher Airlines.straddle between two • Channel Differentiation: more effectively and efficiently designed channels,frames of reference. coverage, expertise and performance.E.g. BMW through a • Image differentiation: Companies can craft powerful compelling images. E.g.well crafted Marlboro’s “macho cowboy” image.marketing programstraddled ‘Luxury’ Product Lifestyle Marketing Strategiesand ‘Performance’ as Most product life-cycle curves are portrayed as bell shaped curves.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).
Chapter 11 - Crafting the Brand Positioning Trends Summary of Product Lifecycle Characteristics, Objectives and Strategies Introduction Growth Maturity Decline Characteristics Sales Low Sales Rapidly rising Peak Sales Declining Sales salesMaturity: Costs High Cost per Average Cost per Low cost per Low cost per customer customer customer customerWhen the Profits Negative Rising Profits High Profits Declining Profitscompetitors cover all Customers Innovators Early Adopters Middle majority Laggardsmajor segments of Marketingthe market maturity Objectives Create product Maximize market Maximize profit Reducestage occurs. awareness and share while defending expenditure andCompetitors invade trial market share milk the brandeach others profits Strategiesand as market growth Product Offer a basic Offer product Diversify brands Phase out weak product extensions, and items models productsslows down, market service, warrantysplits into finer Price Charge cost-plus Price to penetrate Price to match or Cut price market best competitors’segments and market Distribution Build selective Build Intensive Build more Go selective: phasesegmentation occurs. distribution distribution intensive out unprofitableThis is often followed distribution outlets Advertising Build product Build awareness Stress brand Reduce to levelby market awareness and interest in differences and needed to retainconsolidation caused among early mass market benefits hard-core loyals adoptersby the emergence of Sales Promotion Use heavy sales Reduce to take Increase to Reduce toa new attribute that promotion to advantage of encourage brand minimum levelhas greater appeal. entice trial heavy consumer switching demandMature marketsswing between Market Evolutionfragmentation and • Emergence: Before a market materializes it exists as a latent market. Here theconsolidation. 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