A FRAMEWORK for MARKETING MANAGEMENT Kotler KellerCunningham Chapter 9 Creating Positioning and Dealing with Competition

Chapter Questions How can a firm choose and communicate an effective position? How are brands differentiated? How do marketers identify primary competitors and analyze their strategies, objectives, strengths, and weaknesses? Should a company compete as a market leader, challenger, follower, or nicher? © Copyright 2008 Pearson Education Canada 9-2

Profile: Canadian Marketing Excellence CANADIAN TOURISM COMMISSION (CTC) The Canadian Tourism Commission (CTC), a Crown corporation that works in partnership with Canada’s tourism industries Aftershocks of 9/11, SARS, a 25% surge in the Canadian dollar Drop in international visitors / revenues Many believe that the Canadian image is tired and clichéd CTC’s task to make it exciting in comparison to the rest of the globe © Copyright 2008 Pearson Education Canada Result was “Brand Canada”- simple and compelling for travellers seeking an individual experience The tagline “Canada. Keep Exploring”, evokes emotion and inspiration 9-3

Positioning Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market © Copyright 2008 Pearson Education Canada 9-4

Defining Associations Points-of-Difference (PODs) Strong, positive associations with a brand that consumers believe they could not find to the same extent with a competitive brand Points-of-Parity (POPs) Associations that are not necessarily unique to the brand but may be shared with other brands © Copyright 2008 Pearson Education Canada 9-5

Conveying Category Membership Announcing category benefits Comparing to exemplars Relying on the product descriptor © Copyright 2008 Pearson Education Canada 9-6

Consumer Desirability Criteria for PODs Relevance Distinctiveness Believability © Copyright 2008 Pearson Education Canada 9-7

Deliverability Criteria for PODs Feasibility Communicability Sustainability © Copyright 2008 Pearson Education Canada 9-8

Differentiation Strategies Product ChannelImage Personnel © Copyright 2008 Pearson Education Canada 9-9

Product Differentiation Form Features Conformance Durability Reliability Reparability Style Design Quality © Copyright 2008 Pearson Education Canada Carved out a niche in short- haul flights with low prices, reliable service and an off-the-wall sense of humour 9-10

Services Differentiation Ordering ease Delivery Installation Customer training Customer consulting Maintenance and repair © Copyright 2008 Pearson Education Canada 9-11

Personnel Differentiation Competence Courtesy Credibility Reliability Responsiveness Communication © Copyright 2008 Pearson Education Canada 9-12

Channel Differentiation Coverage Expertise Performance © Copyright 2008 Pearson Education Canada 9-13

Image Differentiation Symbols, colours, slogans Atmosphere Events Brand contacts © Copyright 2008 Pearson Education Canada 9-14

Identity and Image Identity The way a company aims to identify or position itself Image The way the public perceives the company or its products © Copyright 2008 Pearson Education Canada 9-15

Figure 9.1 Five Forces that Determine Market Attractiveness Potential Entrants (Threat of mobility) Suppliers (Supplier power) Buyers (Buyer power) Industry Competitors (Segment rivalry) Substitutes (Threat of substitutes) © Copyright 2008 Pearson Education Canada 9-16

Identifying Competitors © Copyright 2008 Pearson Education Canada 9-17

Industry Concept of Competition Number of sellers and degree of differentiation Entry, mobility, and exit barriers Cost structure Degree of vertical integration Degree of globalization © Copyright 2008 Pearson Education Canada 9-18

Industry Concept of Competition Pure monopoly Oligopoly Monopolistic competition Pure competition © Copyright 2008 Pearson Education Canada 9-19

Figure 9.2 Competitor Map © Copyright 2008 Pearson Education Canada 9-20

Analyzing Competitors Strengths Strategies Weaknesses Objectives © Copyright 2008 Pearson Education Canada 9-21

Strengths and Weaknesses Share of market Share of mind Share of heart © Copyright 2008 Pearson Education Canada 9-22

Focusing the Attack Strong versus weak Close versus distant Good versus bad © Copyright 2008 Pearson Education Canada 9-23

Expanding the Total Market New customers More usage © Copyright 2008 Pearson Education Canada 9-24

Figure 9.4 Six Types of Defence Strategies © Copyright 2008 Pearson Education Canada 9-25

Other C Competitive Strategies Market challengers Market nichers Market followers © Copyright 2008 Pearson Education Canada 9-26

Market Challenger Strategies Define the strategic objective and opponents Decide whom to attack Market leader Market equals that are underperforming Small firms © Copyright 2008 Pearson Education Canada 9-27

General Attack Strategies Frontal attack Encirclement attack Bypass attack Flank attack Guerilla warfare © Copyright 2008 Pearson Education Canada 9-28

Market Follower Strategies Counterfeiter Cloner Imitator Adapter © Copyright 2008 Pearson Education Canada 9-29

Table 9.4 Market Niche Roles End-user specialist Vertical-level specialist Customer-size specialist Specific-customer specialist Geographic specialist Product specialist Product-feature specialist Job-shop specialist Quality-price specialist Service specialist Channel specialist © Copyright 2008 Pearson Education Canada 9-30

Balancing Orientations Competitor- centred Customer- centred © Copyright 2008 Pearson Education Canada 9-31

For Discussion Which source of differentiation is best for different industries? Apparel? Electronics? Services? Others? © Copyright 2008 Pearson Education Canada 9-32