Dr. Saleh Alqahtani Chapter 11 Positioning and Differentiating the Market Offering Through the Product Life Cycle by

Dr. Saleh Alqahtani Watch the product life cycle; but more important, watch the market life cycle. Watch the product life cycle; but more important, watch the market life cycle. Kotler on Marketing

Dr. Saleh Alqahtani Developing and Communicating a Positioning Strategy ä Positioning ä Value position

Dr. Saleh Alqahtani is the act of designing the company’s offering and image to occupy a distinctive place in the the target market’s mind. Positioning

Table 11.1: Examples of Value Propositions Demand States and Marketing Tasks Company and Product Target CustomersBenefitsPriceValue Proposition Perdue (chicken) Quality- conscious consumers of chicken Tenderness10% 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

Dr. Saleh Alqahtani ä Positioning: How many ideas to promote? ä Unique selling proposition ä Four major positioning errors 1. Underpositioning 2. Overpositioning 3. Confused positioning 4. Doubtful positioning Developing and Communicating a Positioning Strategy

Dr. Saleh Alqahtani Developing and Communicating a Positioning Strategy ä Theme park’s positioning possibilities: ä Attribute positioning ä Benefit positioning ä Use or application positioning ä User positioning ä Competitor positioning ä Product category positioning ä Quality or price positioning ä Which Positioning to Promote?

Dr. Saleh Alqahtani Differentiation criteria ä Important ä Distinctive ä Superior ä Preemptive ä Affordable ä Profitable

Dr. Saleh Alqahtani Table 11.3: Differentiation Variables ProductServicesPersonnelChannelImage FormOrdering easeCompetenceCoverageSymbols FeaturesDeliveryCourtesyExpertiseMedia PerformanceInstallationCredibilityPerformanceAtmosphere ConformanceCustomer training ReliabilityEvents DurabilityCustomer consulting Responsiven ess See text for complete table

Dr. Saleh Alqahtani Product Differentiation Form Fea- tures Perfor- mance Quality Conform- ance Quality Dura- bility Relia- bility Repair- ability StyleDesign

Dr. Saleh Alqahtani Delivery Services Differentiation Ordering Ease Ordering Ease Maintenance & Repair Maintenance & Repair Customer Training Customer Training Installation Customer Consulting Customer Consulting Miscellaneous Services

Dr. Saleh Alqahtani Differentiation Tools ä Performance Quality ä Conformance Quality ä Durability ä Reliability ä Reparability ä Style ä Design: The Integrating Force ä Services Differentiation ä Ordering Ease

Dr. Saleh Alqahtani product has a life cycle asserts product has a life cycle asserts 1. Products have a limited life. 2. Product sales pass through distance stages, each posing different challenges, opportunities, and problems to the seller. 3. Profits rise and fall at different stages of the product life cycle. 4. Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life-cycle stage.

Dr. Saleh Alqahtani Sales & Profit Life Cycles IntroductionGrowthMaturityDecline Time Sales & profits ($)

Dr. Saleh Alqahtani ä Marketing Strategies: Introduction Stage ä The Pioneer Advantage ä Inventor ä Product pioneer ä Market pioneer Product Life-Cycle Figure 11.6: Long-Range Product Market Expansion Strategy (P = Product; M = Market)

Dr. Saleh Alqahtani Four Introductory Marketing Strategies Rapid- skimming strategy Rapid- penetration strategy Slow- penetration strategy Slow- skimming strategy Price Low HighPromotionHighLow

Dr. Saleh Alqahtani ä Marketing Strategies: ä Improve product quality and add new product features and improved styling ä Add new models and flanker products ä Enter new market segments ä Increase distribution coverage and enter new distribution channels ä Shift from product-awareness advertising to product-preference advertising ä Lower prices to attract next layer of price- sensitive buyers Growth Stage

Dr. Saleh Alqahtani ä Market Modification ä Expand number of brand users by: 1. Converting nonusers 2. Entering new market segments 3. Winning competitors’ customers Maturity Stage

Dr. Saleh Alqahtani ä Convince current users to increase usage by: 1. Using the product on more occasions 2. Using more of the product on each occasion 3. Using the product in new ways Maturity Stage

Dr. Saleh Alqahtani 1. Increase firm’s investment (to dominate the market and strengthen its competitive position) 2. Maintain the firm’s investment level until the uncertainties about the industry are resolved. Decline Stage

Dr. Saleh Alqahtani 1. Decrease the firm’s investment level selectively by dropping unprofitable customer groups, while simultaneously strengthening the firm’s investment in lucrative niches 2. Harvesting (“milking”) the firm’s investment to recover cash quickly 3. Divesting the business quickly by disposing of its assets as advantageously as possible. Decline Stage

Dr. Saleh Alqahtani Table 11.5: Summary of Product Life-Cycle Characteristics, Objectives, and Strategies IntroductionGrowthMaturity Characteristics SalesLow salesRapidly rising sales Peak sales CostsHigh cost per customer Average cost per customer Low cost per customer ProfitsNegativeRising profitsHigh profits CustomersFewGrowing NumberStable number beginning to decline