1. Copyright 2009, Prentice-Hall, Inc.9-1 A Framework for Marketing Management Chapter 9 Crafting the Brand Positioning and Dealing with Competition

2. Copyright 2009, Prentice-Hall, Inc. 9-2 Chapter Questions How can a firm choose and communicate an effective positioning? How are brands and offerings differentiated? How can a firm identify its primary competitors and analyze their strategies, objectives, strengths, and weaknesses? How can market leaders, challengers, followers, and nichers compete effectively?

3. Copyright 2009, Prentice-Hall, Inc. 9-3 Positioning The act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market. Result is the creation of a customer-focused value proposition:  A cogent reason why the target market should buy the product.

4. Copyright 2009, Prentice-Hall, Inc. 9-4 Competitive Frame of Reference Category membership—the products or sets of products with which a brand competes and which function as close substitutes. Need to understand consumer behavior and the consideration sets consumers use in making brand choices.

5. Copyright 2009, Prentice-Hall, Inc. 9-5 Points-of-Parity and Points-of- Difference Points-of-difference (PODs) Attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe they couldn’t find to the same extent with a competitive brand. Points-of-parity (POPs) Associations that aren’t necessarily unique to the brand but may in fact be shared with other brands.  Category points-of-parity  Competitive points-of- parity

6. Copyright 2009, Prentice-Hall, Inc. 9-6 Establishing Category Membership Announcing category benefits Comparing to exemplars Relying on the product descriptor

7. Copyright 2009, Prentice-Hall, Inc. 9-7 Key Criteria for Points-of-Difference Desirability Criteria Relevance Distinctiveness Believability Deliverability Criteria Feasibility Communicability Sustainability

8. Copyright 2009, Prentice-Hall, Inc. 9-8 Differentiation Strategies Competitive advantage—a company’s ability to perform in one or more ways that competitors can’t or won’t match.  Few are sustainable, but a leverageable advantage can be used as a springboard to new advantages.  Focus on building competitive advantages as customer advantages.

9. Copyright 2009, Prentice-Hall, Inc. 9-9 Product Differentiation Form Features Customization Performance quality Conformance quality Durability Reliability Repairability Style Design

10. Copyright 2009, Prentice-Hall, Inc. 9-10 Service Differentiation Ordering ease Delivery Installation Customer training Customer consulting Maintenance and repair Returns

11. Copyright 2009, Prentice-Hall, Inc. 9-11 Other Dimensions of Differentiation Personnel Channel Image

12. Copyright 2009, Prentice-Hall, Inc. 9-12 Five Forces that Determine Marketing Attractiveness Industry competitors Potential entrants Substitutes Buyers Suppliers

13. Copyright 2009, Prentice-Hall, Inc. 9-13 Threats Posed By These Forces Threat of intense segment rivalry. Threat of new entrants. Threat of substitute products. Threat of buyers’ growing bargaining power. Threat of suppliers’ growing bargaining power.

14. Copyright 2009, Prentice-Hall, Inc. 9-14 Industry and Market Views of Competition Industry—a group of firms that offers a product or class of products that are close substitutes for each other. Classified by:  Number of sellers  Degree of product differentiation  Presence or absence of entry, mobility, and exit barriers  Cost structure  Degree of vertical integration  Degree of globalization

15. Copyright 2009, Prentice-Hall, Inc. 9-15 Analyzing Competitors Strategies Objectives Strengths Weaknesses

16. Copyright 2009, Prentice-Hall, Inc. 9-16 Competitor Strengths and Weaknesses Share of market Share of mind Share of heart

17. Copyright 2009, Prentice-Hall, Inc. 9-17 Selecting Competitors Strong vs. weak—most companies aim at weak competitors. Close vs. distant—most companies compete with the rivals that resemble them the most. “Good” vs. “bad”—good competitors play by industry rules, make realistic assumptions, set reasonable prices, and favor a healthy industry.

18. Copyright 2009, Prentice-Hall, Inc. 9-18 Competitive Strategies Leader Challenger Follower Nicher

19. Copyright 2009, Prentice-Hall, Inc. 9-19 Market-Leader Strategies Expanding the total market Defending market share Expanding market share

20. Copyright 2009, Prentice-Hall, Inc. 9-20 Market-Leader Strategy: Expanding the Total Market Market-penetration strategy New-market segment strategy Geographical-expansion strategy

21. Copyright 2009, Prentice-Hall, Inc. 9-21 Market-Leader Strategy: Defending Market Share Position defense Flank defense Preemptive defense Counteroffensive defense Mobile defense Contraction defense

22. Copyright 2009, Prentice-Hall, Inc. 9-22 Market-Leader Strategy: Expanding Market Share Factors to consider before pursuing:  The possibility of provoking antitrust action  Economic cost  Pursuing the wrong marketing activities  The effect of increased market share on actual and perceived quality

23. Copyright 2009, Prentice-Hall, Inc. 9-23 Other Competitive Strategies Market-challenger strategies Market-follower strategies Market-nicher strategies

24. Copyright 2009, Prentice-Hall, Inc. 9-24 Market-Challenger Strategies Define the strategic objective and opponents. Decide who to attack:  Market leader  Market equals that are underperforming  Small local and regional firms

25. Copyright 2009, Prentice-Hall, Inc. 9-25 Attack Strategies Frontal attack Flank attack Encirclement attack Bypass attack Guerilla warfare

26. Copyright 2009, Prentice-Hall, Inc. 9-26 Market-Follower Strategies Counterfeiter Cloner Imitator Adapter

27. Copyright 2009, Prentice-Hall, Inc. 9-27 Specialized Niche Roles End-user Vertical-level Customer-size Specific-customer Geographical Product or product-line Product-feature Job-shop Quality-price Service Channel

28. Copyright 2009, Prentice-Hall, Inc. 9-28 Balancing Customer and Competitor Orientations Competitor-centered company Looks at what competitors are doing and then formulates competitive reactions. Customer-centered company Focuses more on customer developments in formulating its strategies.

29. Copyright 2009, Prentice-Hall, Inc. 9-29 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall