Crafting the Brand Positioning - 11 by skillfulyards


									                     Marketing Management
          By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha

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                                    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
Positioning is the act         Developing and Communicating a Positioning
of designing the                                Strategy
company’s offering
                            Category Membership:                      products or set of products with which the brand
and image to occupy
                            competes and which function as close substitutes.
a distinctive place in
the minds of the            Points of Difference (POD):                         Attributes or benefits consumers strongly
target market.              associate with a brand, positively evaluate and believe they could not find to the same extent
Positioning requires        in another brand.
determining on a            Points of Parity (POP): They are associations that are not unique to the brand
frame 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
                            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
Positing:                    •   Customer Advantage: is an advantage that a customer sees in the company’s
It is a common
positioning technique
used when a
                            Dimensions to differentiate Market Offerings
                             •   Personnel differentiation: Better trained employees E.g. smartly dresses flight
company 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 program
straddled ‘Luxury’                Product Lifestyle Marketing Strategies
and ‘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
                              Summary of Product Lifecycle Characteristics,
                                                  Objectives and Strategies
                                               Introduction      Growth            Maturity          Decline
                         Sales                 Low Sales         Rapidly rising    Peak Sales        Declining Sales
Maturity:                Costs                 High Cost per     Average Cost per Low cost per       Low cost per
                                               customer          customer         customer           customer
When the
                         Profits               Negative          Rising Profits    High Profits      Declining Profits
competitors cover all Customers                Innovators        Early Adopters    Middle majority   Laggards
major segments of     Marketing
the market maturity      Objectives
                                               Create product    Maximize market Maximize profit     Reduce
stage occurs.
                                               awareness and     share           while defending     expenditure and
Competitors invade                             trial                             market share        milk the brand
each others profits      Strategies

and as market growth Product                   Offer a basic     Offer product     Diversify brands Phase out weak
                                               product           extensions,       and items models products
slows down, market                                               service, warranty
splits 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: phase
segmentation occurs.                           distribution      distribution      intensive         out unprofitable
This is often followed                                                             distribution      outlets
                         Advertising           Build product     Build awareness   Stress brand      Reduce to level
by market
                                               awareness         and interest in   differences and   needed to retain
consolidation caused                           among early       mass market       benefits          hard-core loyals
by the emergence of
                         Sales Promotion Use heavy sales Reduce to take Increase to                  Reduce to
a new attribute that                     promotion to    advantage of   encourage brand              minimum level
has greater appeal.                      entice trial    heavy consumer switching
Mature markets
swing between
                                                               Market Evolution
fragmentation and
                          •    Emergence: Before a market materializes it exists as a latent market. Here the
consolidation.                 entrepreneur has three options:
                                   1. Single Niche Strategy: Design a product to meet preferences of 1 segment of the
                                   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
                         1.        Society’s total need level declines
                         2.        New Technology replaces the old

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