This document discusses target marketing and product positioning. It explains that companies can no longer appeal to all buyers, so they must design customer-driven strategies targeting specific market segments. This involves segmentation, differentiation, targeting, and positioning the product to create value for targeted customers. Effective positioning involves choosing differentiators that are important, distinctive, superior, and communicable. A product's position is defined by how consumers perceive it relative to competitors on important attributes. Maps can show perceived positioning. Good positioning aligns with the product's value proposition and competitive advantages.

1. A Customer’s Perception of Value

2. The Marketing Dilemma
Owing to:
Buyers being too numerous, too widely
scattered and too varied in their needs and
buying practices
and
Companies varying widely in their ability to
serve different segments of the market

3. Companies recognize that they cannot
appeal to all buyers in the marketplace
OR
To all buyers in the same way

4. Target Marketing
• Companies must design customer –driven
marketing strategies that build the right
relationships with the right customers
• Hence they have moved away from mass
marketing to target marketing =identifying
market segments , selecting one or more of them
and marketing programmes tailored to each. A
rifle vs. shotgun approach.

5. Designing a Customer driven
Marketing strategy
Select customers to serve Decide on a Value Proposition
Segmentation Differentiation
Divide market into Differentiate the market offering
Smaller segments to create superior value
Creating Value
for targeted customer
Targeting Positioning
•Select the segment or Position the market offering
Segments to enter In the minds of target

6. Differentiation and Positioning
Beyond deciding which segments of the
market to target to the customer must decide
on a Value Proposition : how it will create
differentiated value for targeted segments and
what positions it wants to occupy in those
segments.

7. A Product’s Position is…
The way the product is defined by
consumers on important attributes - the
place the product occupies in consumers’
minds relative to competing products.
“ Products are created in the factory, but
brands are created in the mind”

8. Positioning
• Tide is positioned as a powerful, all –
purpose family detergent
• Ariel as the gentle detergent for fine
washables and baby clothes.
• Dalda “ Maternal love”
• Tata Indica and Maruti Suzuki 800
Economy
• Mercedes and Cadillac Luxury
• Volvo Safety
• Toyota Fuel Efficient

9. Consumer Behaviour
• Customers cannot re evaluate products every
time they make a buying decision. To simplify
the buying process, consumers organize
products, services and companies into
categories and position them in their minds.
• A product’s position is the complex set of
perceptions, impressions, and feelings that
consumers have for the product compared with
competing products

10. Marketing implication
• Though consumers position products with
or without the help of Marketers marketers
do not want to leave their products’
positions to chance.
• They must plan positions that will give
their products the greatest advantage in
selected target markets and they must
design marketing mixes to create these
planned positions.

11. Positioning Maps
• Perception maps show consumer perceptions of
their brands versus competing products on
important buying dimensions.
• In the positioning map of the US large luxury
Sport Utility vehicle market the position of each
circle on the map indicates the brand’s
perceived positioning on 2 dimensions : price
and orientation( luxury vs. performance). The
size of each circle indicates the brand’s relative
market share.

12. Fig 6.3 Positioning map luxury
SUVs
Why would
“Expensive”
be better than
“Price”

13. Product space (positioning) for bar
soaps
High
moisturizing
Low moisturizing
Nondeodorant Deodorant
1
2
3
4
5
7
6
8
Safeguard
Lever 2000
Zest
Coast
Lux
Dove
Tone
Lava
Lifebuoy
Dial

14. Competitive positioning:
1. Some positions may make no sense
High Service
Economy
price
Low Service
High
price
Competitor D
Competitor B
Competitor C
Competitor A
Who
wants high
price/low
service?

15. Competitive positioning:
2. Usually best to avoid head-to-head
High Service
Economy
price
No one in
this
segment
Low Service
High
price
Competitor D
Competitor B
Competitor C
Competitor A

16. Repositioning:
You can move, but not leap:
Crunchy
Not
sweet
Where we
are
“Ideal cereal
for kids”
Soggy
Sweet

17. Repositioning:
You can move, but not leap:
Crunchy
Not
sweet
Where we
are
“Ideal cereal
for kids”
Soggy
Sweet
Not going to
happen!

18. Repositioning:
You can move, but not leap:
Crunchy
Not
sweet
Where we
are
“Ideal cereal
for kids”
Soggy
Sweet
This might be
possible

19. Positioning is in the eye of the beholder
1. Most products can be positioned in several different ways
—choose one
2. A good “positioning’ is credible that is, it is linked to the value
proposition
3. Some positions involve giving up others
4. Some positions may have been pre-empted by other firms
Good marketers understand what to do to effectively position their
products—an array of “Attributes and Associations”
You can move (or develop) your position, but you can’t do a magic
leap

20. Choosing a Differentiation and
Positioning strategy
A firm well known for quality in certain segments
will go for this position in a new segment if there
are enough buyers seeking quality. In most cases,
however, two or more firms will go after the same
position.
Each will need to set itself apart.
Hence each firm must differentiate its offer by
building a unique bundle of benefits that appeals to
a substantial group within the segment.

21. Above all…
A brand’s positioning must serve the needs of well –
defined markets.
The Differentiation and positioning task is
a 3 step one :
1. Identifying a set of differentiating competitive
advantages upon which to build a position
2.Choosing the right competitive advantages
3.Selecting an overall positioning strategy

22. The company must then effectively
communicate and deliver the chosen
position to the market.

23. Identifying possible value differences and
competitive advantages
• To build profitable relationships with target
customers marketers must understand
customer needs better than competitors
and deliver more customer value.
• To the extent a company can differentiate
and position itself as providing superior
customer value it gains competitive
advantage.

24. SOLID POSITIONS CANNOT BE
BUILT ON EMPTY PROMISES

25. If positioned as offering the best quality
and service, it must actually differentiate
the product so that it delivers the promised
quality and service.
Companies must live the slogan.

26. Ways of differentiation
Product
Services
Channels
People
Image

27. Product differentiation
• Features
• Performance
• Style
• Design

28. Service
• Speedy
• Convenient
• Careful

29. Channel Differentiation
• Channel coverage
• Expertise
• Performance

30. People Differentiation
Hiring and training better people than the
competition.

31. Image differentiation
• A company or brand image should convey the
product’s distinctive benefits and positioning.
Distinctive symbols, celebrities, colours can all
be used for this and also other image elements
must be communicated through advertising to
convey the company’s brand personality

32. Choosing the right competitive
advantage
• Assume company has identified several
potential differentiators. It must now
choose the ones on which it will build its
positioning strategy.
• It must decide how many differences to
promote and which ones.

33. How many differences to promote?
• Many marketers think that companies
should aggressively promote only one
benefit to the target market
• Ad man Rosser Reeves said a company
should develop a Unique Selling
Proposition for each Brand and stick to it.
• Each brand should pick an attribute and
tout itself as number one on that attribute.

34. The logic behind this view is that buyers
tend to remember number one better ,
especially in the face of the general over –
communication. Thus Wal - Mart promotes its
low prices and Burger King promotes – “Have it
your way”.
Other marketers feel that companies should
position themselves on more than one
differentiator especially when two or more
companies are claiming to be the best on the
same attribute.

35. Another reason : Mass markets are
fragmenting into small segments and
companies are trying to broaden their
positioning strategies to appeal to more
segments. Many buyers want
these multiple benefits.
But as claims increase, disbelief and loss
of clear positioning is the risk

36. Which differences to promote
• Important
• Distinctive
• Superior
• Communicable
• Preemptive
• Affordable
• Profitable

37. Important : The difference delivers a highly valued
benefit to target buyers
Distinctive: Competitors do not offer the difference,
or the company can offer it in more distinctive way.
Superior: The difference is superior to other ways
that customers might obtain the same benefit.
Communicable: The difference is communicable and
visible to buyers

38. Preemptive: Competitors cannot easily
copy the difference
Affordable : Buyers can afford to pay for
the difference
Profitable: The company can introduce the
difference profitably.

39. Selecting an overall positioning
statement
• The full positioning of a brand is called the
brand’s value proposition – the full mix of
benefits upon which the brand is
differentiated and positioned.
• It answers the customer’s question” Why
should I buy your brand?”

40. • The Figure on the next slide shows
possible value propositions upon which a
company may position its products

41. Copyright 2007,
Prentice-Hall, Inc.
A&K Figure 6.4
4. Positioning should match the
Value Proposition

42. • The five green cells represent winning
value propositions – differentiation and
positioning that give the company
comparative advantage.
• The blue cells represent losing value
propositions.
• The pink cell is at best a marginal
proposition

43. More for more
Upscale products : Ritz Carlton, Mont Blanc,
Mercedes, Viking appliances.
Each product claims superior quality, craftsmanship,
durability, performance or style and charges a price
to match. High quality plus prestige. Status and a
loftier lifestyle.
Often the price difference exceeds the actual
increment in quality.

44. • Companies should look out for opportunities to
introduce a more for more brand in any
underdeveloped product or service category.
( Eg. Starbucks, I phone)
• Risk : Competition providing the same quality
at a lower price and economic downturn

45. More for the same
• More for more can be attacked by giving
comparable quality at a lower price than
the competition.
• Eg Toyota introduced Lexus with a more
for the same value proposition versus
Mercedes and BMW.

46. The same for less
• Everyone likes a good deal. Discount
stores such as Wal Mart and Big Bazaar
are category killers. Croma and E Zone
also use this positioning.

47. Less for much less
• Very few people need ,want or can always
afford the very best in everything they buy.
Hotel chains like Ginger Hotels suspend
some amenities and charge less. Other
examples: Maruti 800 – no frills, Indigo
Airlines

48. More for less
• The winning value proposition! Eg Tata
Indica – more space and better fuel
economy at a lower price.
• In the long run this position is very difficult
to maintain since offering more usually
costs more.

49. Moral of the story?
• In any market there is usually room for
many different companies, each
successfully occupying different positions.
• The important thing is that each company
must develop its own winning positioning
strategy, on that make sit special to its
target consumers.

50. Developing a
Positioning statement
• To (target segment and need) our (brand)
is (concept) that ( Point of difference)

51. Blackberry
“To busy, mobile professionals, who need
to always be in the loop, Blackberry is a
wireless connectivity solution that gives
you an easier, more reliable way to stay
connected to data, people and resources
while on the go.”

52. • Positioning first states the product’s membership
in a category( wireless connective solution) and
then shows its point of difference from other
members of the category( easier , more reliable
connections to data, people, resources).
• Placing a brand in a specific category suggests
similarities that it might share with other products
in the category. But the case for a brand’s
superiority is made on its points of difference.

53. Sometimes, however…
• Marketers put a brand in a surprisingly different
category before indicating the points of
difference.
• Dove soap : Dove soaps ads originally showed
Dove’s key benefits as mild leaving the skin soft.
Dove was promoted as better for the skin than
soap as it had one quarter cleansing cream.
This was later changed to one quarter
moisturizing cream

54. In India
• Many Dove Ads show cream being pored into
the Dove bar. Taglines like, “Try the Dove
Face Test and soon you’ll never wash with
soap again” positions the bar away from
soap into the moisturizing lotions category.
• This strategy has been extremely successful.

55. Communicating and delivering the
chosen position
• After the company has chosen a position it
must take strong steps to deliver and
communicate the desired position to target
customers. The marketing mix must
support the positioning strategy.
• Once the company’s position has been
built it must maintain that position through
consistent performance and
communication.

56. • The company must monitor and adapt the
position gradually overtime to match
changes in consumer needs and
competitors’ strategies.
• However, it should avoid abrupt changes
so as not to confuse consumers.

57. Profit Centric Business design
• To truly understand customers and thus
formulate and execute business strategy
that can accelerate profitable growth,
managers must design each of their
businesses around a disciplined choice of
a winning value proposition

58. THE VALUE DELIVERY SYSTEM (VDS)
STRATEGY FRAMEWORK
Create, redesign, manage businesses as VDS’s
CHOOSE THE VALUE PROPOSITION PROVIDE IT COMMUNICATE IT
Analyze the market space Decide how for each resulting experience
in the VP, how you will provide customers
with the actual experience, how they will
understand it and believe it
Choose a complete Value Proposition Capabilities you therefore need
TOTAL REVENUE minus COST = BUSINESS PROFIT

59. CHECKLIST FOR A WINNING
BUSINESS/Value Delivery System
(VDS)
WOULD THIS VDS DELIVER A SUPERIOR
VALUE PROPOSITION?
If delivered as designed, do we believe
intended customers would conclude that
the value proposition is superior to their
competing alternatives?
• HOW MUCH REVENUE would we expect ?

60. DO WE BELIEVE WE CAN BUILD THE
CAPABILITIES NEEDED to implement
this VDS? This includes improving existing,
and creating new capabilities to provide and
communicate the proposition
WHAT TOTAL COST would we incur?
This includes on-going operating costs plus
those of building new capabilities, and the
cost of capital

61. HOW MUCH PROFIT would this
business/VDS generate, ignoring
other businesses or later timeframes?
WHAT IMPACT ON OUR OTHER BUSINESSES,
if any, would this VDS have? To what extent
would conflicts or synergies from this VDS
reduce/increase profitability of our other
businesses?

62. WHAT IMPACT ON LATER TIMEFRAMES
would this VDS have? Does it facilitate a
longer-term, more profitable VDS, or
compromise later ones?
WHAT DISCONTINUITIES may impact its
success and sustainability? What changes in
the environment could change the outcome of this
VDS?
HOW DOES THIS VDS COMPARE TO OUR
OTHER OPTIONS?

63. IN NET: IS THIS A GOOD VDS? Do we
believe it will, long term, generate more
wealth for the firm than not implementing it?

64. 64
A name, sign or symbol used to identify
items or services of the seller(s) and to
differentiate them from goods or services
of competitors.
Brand.

65. 3/31/2021 65
GOOGLE.
SEARCH.
BMW.
DRIVING.
INDIA.
DIVERSITY.

66. Value Proposition
• The Value proposition consists of the
whole cluster of benefits the company
promises to deliver. It is more than the
core positioning of the offering.
• Eg Volvo’s core positioning has been
safety, but the buyer is promised more
than just a safe car. Other benefits include
along – lasting car, good service and
along warranty period.

67. The value proposition is a statement about
the experience the customer will gain from
the company’s market offering and from
their relationship with the supplier.

68. A “COMPLETE” VALUE
PROPOSITION
Explicitly decides, for this proposition:
• I. Who are the intended customers?
• II. What is this proposition’s time horizon?
• III. What do we want these intended customers
to do?
• IV. What competing alternative(s) do they have?
• V. What resulting experiences will they derive,
vs. alternative(s), if they do as we propose

69. Value Proposition
A Brand’s Value Proposition is a statement
of the functional, emotional and self –
expressive benefits delivered by the brand
that provide value to the customer. An
effective value proposition should lead to a
brand – customer relationship and drive
purchase decisions

70. Functional benefits
Volvo –safe and durable because of its
weight and design
Quaker Oats provides a hot, nutritious
breakfast cereal
A BMW handles well, even on ice
Huggies deliver comfort and fit, so leaks
are avoided
Gatorade helps replace fluids when one
is playing

71. Emotional benefits
Safe in a Volvo
Excited in a BMW or watching MTV
In control of aging with Oil of Olay
strong and rugged while wearing A Levi’s

72. Self - expressive benefits
Hip by buying fashion from GAP
Sophisticated using Ralph Lauren
Successful , elegant, rich wearing a Rolex
Sporty wearing a Tag Heuer Watch

73. Table 11.1: Examples of Value Propositions
Demand States and Marketing Tasks
Company
and
Product
Target
Customers Benefits Price
Value
Proposition
Perdue
(chicken)
Quality-
conscious
consumers of
chicken
Tenderness 10%
premium
More tender
golden chicken at
a moderate
premium price
Volvo
(station
wagon)
Safety-
conscious
“upscale”
families
Durability
and safety
20%
premium
The safest, most
durable wagon in
which your family
can ride
Domino’s
(pizza)
Convenience-
minded pizza
lovers
Delivery
speed and
good quality
15%
premium
A good hot pizza,
delivered to your
door door within
30 minutes of
ordering, at a
moderate price

74. 3/31/2021 74
Definition.
“Positioning is not what you do to a product.
Positioning is what you do to the mind of the
prospect.”
“Positioning is ,how you differentiate yourself in
the mind of your prospect”.
e.g.
Mysore Sandal -Purity and natural fragrance.
Margo- Herbal(neem).
Lifebuoy-Hygiene.

75. Positioning attracted attention when in 1972 Jack Trout
and Al Ries wrote a series of articles entitled “The
Positioning Era” for the trade paper Advertising Age.
Today positioning has become the buzzword of
advertising and marketing, all over the world.
Positioning starts with a product .A piece of merchandise
,a service ,a company ,an institution or a person.
Perhaps yourself.
But it is not what you do to a product.
Positioning is what you do to the mind of the prospect.
That is ,you position the product in the mind of the
prospect.

76. 3/31/2021 76
Why positioning?
There are two kinds of products – commodities and
brands. A commodity is a product that is same as those
made by every other company. As a result the only way
to sell a commodity is by selling it cheaper than your
competitor.
A brand on the other hand, is a product that is unique
and different. A customer can buy A Tata Indica for a lot
less money than a Mercedes Benz, but most Mercedes
customer won’t buying tata or any other vehicle simply
because “it’s not a Mercedes-Benz.”
You need unique brands to make money.

77. 3/31/2021 77
Why positioning?
Starbucks narrowed its focus to high-end coffee and
became the world's largest coffee chain.
Dell Computer narrowed its focus to personal computers
"sold direct" and became the world's largest PC
manufacturer.
BMW narrowed its focus to "driving" and became the
largest-selling European luxury car
in the U.S.
Focus is the key to successful brand building in today's
ultra-competitive marketplace
You narrow the focus

78. Some famous positioning statements
• Titan Quartz, the international watch you can pay for in rupees
• Four Square…Live life king size.
• Hero Honda…Fill it, shut it, forget it.
• Savlon…Yeh jale ga nahin
• Avis…We are No.2, so we try harder
• Maggi Noodles…bus do minute
• ESSO petrol…..put a tiger in your tank.

79. Developing and Communicating
a Positioning Strategy
• Communicating the Company’s Positioning
– Positioning statement
• More car per car……….TATA Indica V2
• Spoil yourself…………..TATA Indigo
• Lets make things better……Philips
• For a special journey called life…..Chevrolet
• The difference is German engineering….Corsa
• Express yourself……Airtel
• For Managing Tomorrow…..Business Today

80. The Competitive Position may be
different in another (geographic)
market:
Honda in Japan
• Youthful
• Sporty
• Hi-tech engineering
Honda in USA
• Economical
• Good enough for
everyday
• “Import”

81. We achieve positioning by
Attributes and Associations
How does
the
Marketing
Mix fit here?
Positioning
Attributes Associations
Features
Performance
Price
Channel
Advertising
Other Promotion

82. 3/31/2021 82
How these companies positioned
themselves
• Mercedes-Benz ………………… prestige.
• BMW …………………………… driving.
• Volvo…………………………….. Safety.
• Starbucks………………………… high-end
coffee..
• Rolex……………………………… high-end
watches.
• Google ……….……………………Search.
• Red bull ………………………… energy drink.
• FedEx…………………………… overnight
(delivery)

83. 3/31/2021 83
Volvo owns a single word in the
minds.
Volvo.
Safety.
Volvo has successfully simplified and
Communicated this message.

84. 3/31/2021 84
You differentiate or die
• Advertising has entered a new era where
creativity is no longer the key to success,
today a company must create a position in
the prospect’s mind. A position which is
unique and based on company’s strengths
and on realities. You don’t lie you only
exaggerate.
Camlin (marker)-Permanent.

85. 3/31/2021 85
• Heidelberg - the working man’s
beer.
• Bud - the athletic beer
• Bud Lite - the party beer
• Coors - the environment beer

86. 3/31/2021 86
• Marlboro - the rugged male
• Virginia slims - the independent
female
• Camel - cool and
sophisticated
• Benson & hedges - “intellectual”

87. 3/31/2021 87
So is positioning always beneficial?
• Xerox first made photo copy machine & sold
them world wide, as the time passed Xerox
become synonymous to photocopy.
When it launched it’s
“Xerox data system", fax machine,
and PC all were disastrous and
Xerox lost billions of dollar
since it could not change or
reconstructed minds of prospects.
Xerox.
Photocopy.
Same happened with IBM & Dalda

88. 3/31/2021 88
Repositioning :Reconstruction of
perceptions.
• Companies like IBM, Bajaj and Xerox did it.
Compan
y
Traditional
image
Repositioned image
IBM Computer
hardware
Services & hardware
Xerox copier Hardware & software
Bajaj Scooters motorcycles

89. Saturn Value Proposition
• Functional Benefits : A quality economy car; a
pleasant buying experience, excellent , friendly
service back up
• Emotional benefits : Pride in a US made car,
friend relationship with Saturn and dealers
• Self - expressive benefits : owning a Saturn
identifies a person as frugal, down to earth, fun
and young at heart

90. McDonald’s Value Proposition
• Functional benefits : Good tasting hamburgers, fries,
and drinks that provide value: extras such as
playgrounds, prizes, premiums and games
• Emotional benefits:
Kids- fun via excitement of birthday parties,
relationship with Ronald Mc Donald and other
characters, and feeling of special family times
Adults -warmth via link to family events and
experiences reinforced by the McDonald’s emotional
advertising

91. Nike Value proposition
• Functional benefits : High – technology shoe that
will improve performance and provide comfort.
• Emotional benefit : The exhilaration of athletic
performance excellence: feeling engaged,
active, healthy.
• Self – expressive symbolic befits: self -
expression is generated by using a shoe with a
strong personality associated with a visible
athlete

92. What is Brand Equity and Why Does It Matter?
(From Berry, “Cultivating Brand Equity”)
Definition: A set of assets and liabilities linked to a brand’s
name and symbol that adds to (or subtracts from) the
perceived value of the product
Insights
• Brand equity can be positive or negative
• Positive brand equity creates marketing advantage for
firm plus value for customer
• Perceived value generates preference and loyalty
• Management of brand equity involves investment to
create and enhance assets, remove liabilities

93. A Service Branding Model:
How Communications + Experience Create Brand Equity
Firm’s Presented Brand
(Sales, Advertising, PR)
What Media, Intermediaries,
Word-of-Mouth Say re: Firm
Customer’s Experience
with Firm
Awareness of
Firm’s Brand
Meaning Attached
To Firm’s Brand
Firm’s
Brand Equity
Source: Adapted from L. L. Berry ( Fig. 1)
Marketer-controlled communications
Uncontrolled brand communications