Chapter 7 Differentiation and Brand Positioning

Brand Positioning Customer's perception of a brand or a product relative to their needs Comprises both competitive and customer need considerations

What they choose is better or cheaper Differentiation Preference of one product, good or service, over another Reasons why consumers choose what they buy What they choose is better or cheaper Important in business strategies and marketing

Assessing product offering based on a set of objective physical Physical Positioning Assessing product offering based on a set of objective physical characteristics Limitations Does not provide a complete picture of relative positions Customers may perceive some of the brand characteristics differently from how the marketers intended

Perceptual Positioning Includes product presentation, past experiences and opinion of others

Exhibit 7.2 - Comparison of Physical and Perceptual Positioning Analysis

Kinds of Brand Attributes Physical - Directly related to a single physical dimension Complex physical - Used by consumers to evaluate competitive offerings Abstract - Influenced by physical characteristics Not related in any direct way Price - Implies high or low quality Perceptual attributes must be considered in positioning most products.

Exhibit 7.4 - Steps in the Positioning Process

Exhibit 7.4 - Steps in the Positioning Process

Determinant Attributes Features Benefits Parentage Manufacturing process Ingredients Endorsements Comparison Proenvironment Price/quality

Tools Used to Understand the Positioning of Products Positioning grid: Visual representation of the positions of various products or brands in the competitive set in terms of two determinant attributes Also called perceptual maps Value curve: Comprises more than just two dimensions that can be generated

Exhibit 7.6 - Perceptual Map of Women’s Clothing Retailers in Washington, D.C. Source: Adapted from Douglas Tigert and Stephen Arnold, “Nordstrom: How Good Are They? ” Babson College Retailing Research Reports, September 1990, as shown in Micheal Levy and Barton A. Weitz, Retailing Management (Burr Ridge, IL: Richard D. Irwin. 1992), p. 205.

Constraints Imposed by an Intense Position Shift in the market environment cause customers to reduce the importance they attach to an attribute Difficulty in repositioning a brand with an intensely perceived position on that attribute

Exhibit 7.8 - Value Curves for Neiman Marcus, J.C.Penney, and Sears Value curves indicate how products within a category compare in terms of the level—high or low—of as many attributes as are relevant.

Market Positioning Analysis Measuring customers’ preferences and locating them in the product space along with their perceptions of the positions of existing brands

Exhibit 7.9 - Perceptual Map of Women’s Clothing Retailers in Washington, D.C., Showing the Ideal Points of a Segment of Consumers Source: Adapted from Douglas Tigert and Stephen Arnold, “Nordstrom: How Good Are They?” Babson College Retailing Research Reports, September 1990.

Exhibit 7.10 - Perceptual Map of Women’s Clothing Retailers in Washington, D.C., Showing Five Segments Based on Ideal Points Source: Adapted from Douglas Tigert and Stephen Arnold, “Nordstrom: How Good Are They?” Babson College Retailing Research Reports, September 1990.

Guiding Development of Marketing Strategy Common approaches Positioning statement Identifies the target market States unique benefits of the product Value proposition Similar to positioning statement Includes information about pricing relative to competitors Both approaches reflect the unique selling proposition (USP) of the product

Exhibit 7.11 - Positioning Statement and Value Propositions for Volvo Automobiles in the United States Unique selling proposition (USP): Basis on which the marketer intends to win competitive advantage by differentiating the product from others in its competitive space. Positioning statement or value proposition states benefits that the user of the product will obtain.

Value created by establishing customer preference for one’s brand Brand Equity Value created by establishing customer preference for one’s brand Maintaining brand value requires Brand reinforcement Brand Revitalization

Positioning Decisions in Global Markets Globalization makes consumers understand: What’s available elsewhere and see how it is positioned Marketers will have to be careful that: Marketing messages in one part of the world don’t conflict with established positioning in another

Caveats in Positioning Decision Making Focus should be on delivering the benefits that matter most to the target customer Tangible attributes of the good or service itself