10 Crafting the Brand Positioning

Chapter Questions How can a firm choose and communicate an effective positioning in the market? How are brands differentiated? What marketing strategies are appropriate at each stage of the product life cycle? What are the implications of market evolution for marketing strategies?

Marketing Strategy Segmentation Targeting Positioning

Positioning Act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market.

Positioning: Creating Brand Image and Personality

Value Propositions Perdue Chicken Domino’s More tender golden chicken at a moderate premium price Domino’s A good hot pizza, delivered to your door within 30 minutes of ordering, at a moderate price

Writing a Positioning Statement Mountain Dew: To young, active soft-drink consumers who have little time for sleep, Mountain Dew is the soft drink that gives you more energy than any other brand because it has the highest level of caffeine.

Defining Associations Points-of-difference (PODs) Attributes or benefits consumers strongly associate with a brand, positively evaluate, and 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

Conveying Category Membership Announcing category benefits Comparing to exemplars Relying on the product descriptor

There Are Two Positioning Extremes Performance Style

And BMW Satisfies Both

Westin-Stamford Singapore: The World’s Tallest Hotel Choosing POPs and PODs Relevance Distinctiveness Believability Westin-Stamford Singapore: The World’s Tallest Hotel

Deliverability Criteria Feasibility Communicability Sustainability

Examples of Negatively Correlated Attributes and Benefits Low-price vs. High quality Taste vs. Low calories Nutritious vs. Good tasting Efficacious vs. Mild Powerful vs. Safe Strong vs. Refined Ubiquitous vs. Exclusive Varied vs. Simple

Addressing Negatively Correlated PODs and POPs Present separately Leverage equity of another entity Redefine the relationship

Brand Mantras To further focus the intent of the brand positioning and the way firms would like consumers to think about the brand, it is often useful to define a brand mantra. A brand mantra is an articulation of the heart and soul of the brand and is closely related to other branding concepts like “brand essence” and “core brand promise.” Brand mantras are short, three- to five-word phrases that capture the irrefutable essence or spirit of the brand positioning. Their purpose is to ensure that all employees within the organization and all external marketing partners understand what the brand is most fundamentally to represent with consumers so they can adjust their actions accordingly. Internally, Nike marketers adopted the three-word brand mantra, “authentic athletic performance,” to guide their marketing efforts. Thus, in Nike’s eyes, its entire marketing program—its products and how they are sold—must reflect those key brand values.

Designing a Brand Mantra Communicate Simplify Brand mantras are designed with internal purposes in mind. A brand slogan is an external translation that attempts to creatively engage consumers. Although Nike’s internal mantra was “authentic athletic performance,” its external slogan was “Just Do It.” Here are the three key criteria for a brand mantra. • Communicate. A good brand mantra should define the category (or categories) of business for the brand and set the brand boundaries. It should also clarify what is unique about the brand. • Simplify. An effective brand mantra should be memorable. For that, it should be short, crisp, and vivid in meaning. • Inspire. Ideally, the brand mantra should also stake out ground that is personally meaningful and relevant to as many employees as possible. Brand mantras typically are designed to capture the brand’s points-of difference, that is, what is unique about the brand. Other aspects of the brand positioning—especially the brand’s points-of- parity—may also be important and may need to be reinforced in other ways. Inspire

Constructing a Brand Positioning Bull’s-Eye A brand bull’s-eye provides content and context to improve everyone’s understanding of the positioning of a brand in the organization. Here we describe the components of a brand bull’s-eye, illustrating with a hypothetical Starbucks example. In the inner two circles is the heart of the bull’s-eye—key points-of-parity and points-of-difference, as well as the brand mantra. In the next circle out are the substantiators or reasons-to-believe (RTB)—attributes or benefits that provide factual or demonstrable support for the points-of-parity and points-of-difference. Finally, the outer circle contains two other useful branding concepts: (1) the brand values, personality, or character—intangible associations that help to establish the tone for the words and actions for the brand; and (2) executional properties and visual identity—more tangible components of the brand that affect how it is seen. Three boxes outside the bull’s-eye provide useful context and interpretation.

Differentiation Strategies Product Personnel Channel Image

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

Product Differentiation Product form Features Performance Conformance Durability Reliability Reparability Style Design Ordering ease Delivery Installation Customer training Customer consulting Maintenance

Image Differentiation

Personnel Differentiation

Channel Differentiation

Brand Positioning create/maintain a unique representation of the brand in customers’ mind to stimulate choice of that brand positioning = more in the mind than in the market advertising adds value to a product by changing our perception, rather than the product itself creating added intangible value, without changing the product it is not about laboring, engineering, raw material

Positioning Effect

Pepsi challenge – cola wars

“marketing blunder of the century” Coca cola underestimated the intangible, symbolic value to the target audience of the original product Coca-Cola executives announced the return of the original formula on July 10, 1985 after 79 days (April 23 - July10), the original-recipe Coke was back on the market as “Coca-Cola Classic.”

children’s taste test (3- to 5-year-old) one-quarter of a McDonald's hamburger partially wrapped in a white McDonald's wrapper showing the McDonald's logos and the word Hamburger in brown the other wrapped identically in a matched plain white wrapper of the same size and material a Chicken McNugget in a white McDonald's bag with a red arches logo and the phrase Chicken McNuggets in blue the other in a matched plain white bag McDonald's french fries in a white bag with a McDonald's yellow arches and smile logo on a red background and the words "We love to see you smile" in blue on yellow along the edge in a matched plain white bag 3 ounces of 1% fat milk in a white McDonald's cup with lid and straw in a matched plain white cup with lid and straw 2 "baby" carrots placed on top of a McDonald's french fries bag on top of a matched plain white bag Robinson, T, Borzekowski, D., Matheson, D., Kraemer, H.(2007). Effects of fast food branding on young children’s taste preferences. Archives of Pediatrics & Adolescent Medicine, 161 (8), 792-797

summary “brands” (intangible attributes) may transform “products” (tangible attributes) brands have intrinsic product qualities ABS, high performing engines brands have extrinsic representational qualities (“badge value”) fulfilling emotional and psychological needs wearing a swatch ≠ wearing a rolex brand positions exist in people’s head/hearts marcoms can greatly influence brand positions

Product Life Cycle Introduction Growth Maturity Decline

Facts about Life Cycles Products have a limited life. Product sales pass through distinct stages. Profits rise and fall at different stages. Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each stage.

Marketing Program Modifications Prices Distribution Advertising Sales promotion Services Panadol’s Ad by Ogilvy

The Product Life Cycle: Critique Life-cycle patterns are too variable in shape and duration. Marketers can seldom tell what stage the product is in. PLC stage should be a dependent variable which is determined by marketing programs; it is not an independent variable to which companies should adapt their marketing programs.

Market Evolution Stages (a market-oriented picture of a product/a firm) Emergence Growth Maturity Decline

Emerging Markets Latent Single-niche Multiple-niche Mass-market

Developing Value Proposition for Business Markets*) Customers may only look at price, and not listen to your sales pitch *) Anderson, James C., James. A. Narus, and Wouter van Rossum (2006), “Customer Value Propositions in Business Markets, HBR, March.

Types of Value Proposition ALL BENEFITS Pitfall: Many or even most of the benefits may be Points-of-Parity -- with those of the next best alternatives (competitors) – diluting the effect of the few genuine Points-of Difference.

Types of Value Proposition 2. FAVORABLE POINTS-OF-DIFFERENCE Answering the question of: “Why should our firm purchase your offering instead of your competitor’s?” Pitfall: Assuming that favorable points of difference must be valuable for the customer.

Types of Value Proposition RESONATING FOCUS Value Proposition which contains the critical issues in customer’s business, is simple yet powerfully captivating. Superior on few elements that matter most to target customers. Demonstrating and documenting the value of this superior performance, and communicating it in a way that conveys a sophisticated understanding of the customer’s business priorities.

Distinctive Value Proposition (Resonating Value Proposition) A Point-of-Parity (what customers may mistakenly presume to be a POD favoring a competitor’s offering). Several Points-of-Difference Also: Points-of-Contention (elements where supplier and customer disagree how their performance compares with those of the next best alternatives).