2. Where We Have Been u Quetzal : Define your business. u Jones Blair: Market Targeting

3. MARKSTRAT u Familiarization of systems/environment u Basic research needs evaluation u Initiation of R&D projects u Marketing projections (Plan) u Moving from tactical to strategic planning

4. Positioning

5. “Once a mind is made up, it’s almost impossible to change it.” - Al Trout & Jack Ries, the “fathers” of positioning

6. Inputs to the positioning decision? u Target Market u Firm’s SCAs u Competition

7. Mkt AnalysisSegmentation Competitive Analysis Differentiation Position Internal Corporate Analysis TM Selection Package of Benefits Selection Implications for Mktg Strat * Product * Price * Channels * Promo Quelch, John R. (1982) “Frank Homer LTD - Teaching Note,” in Cases in Advertising and Promotion Management, 2d ed., Business Publications, Inc. THE PROCESS OF POSITIONING

8. “Positioning Audit,” Trout & Ries ¬ What is our position?

9. Important Dimensions?

10. BMW Luxury Performance

11. “Positioning Audit” ¬ What is our position? ­ What position do we want?

12. BMW Z3

13. “Positioning Audit” ¬ What is our position? ­ What position do we want? ® Where is our competition relative to our desired position?

14. Porsche Exotic, Expensive & Italian Japanese Swedes BMW Jaguar Mercedes General Motors Subaru Yugo Lincoln

15. “Positioning Audit” ¬ What is our position? ­ What position do we want? ® Where is our competition relative to our desired position? ¯ Can we defend our position?

16. Exotic, Expensive & Italian Porsche Japanese Swedes BMW Jaguar General Motors Subaru Yugo Mercedes Lincoln

17. “Positioning Audit” ¬ What is our position? ­ What position do we want? ® Where is our competition relative to our desired position? ¯ Can we defend our position? ° Is our position long-term?

18. “Positioning Audit” ¬ What is our position? ­ What position do we want? ® Where is our competition relative to our desired position? ¯ Can we defend our position? ° Is our position long-term? ± Does our promotion reflect our position?

21. Sample Markstrat Process for Positioning u Step 1: Where are we? u Step 2: Where do we want to be? u Step 3: Where do we expect the market to be in X time period? u Step 4: How much will our move cost us? (R&D costs, Push/Pull costs) u Step 5: What attribute changes brings us to our desired position?

22. Step 1: Where are we? u Examine perceptual map – Too close = cannibalization u Semantic vs. Perceptual map – Matter of cost vs. accuracy

23. Step 2: Where do we want to be? u Optimal Brand position u Prediction of ideal points – Evolution of ideal points over time

24. Step 3: Where is the market? u Forecast Market Share – Examine Consumer survey research for purchase intentions data Brand awareness/brand positioning Brand awareness/brand positioning u Expected Brand Demand – ESS X EPI = EBS Analyze Per segment and then total Analyze Per segment and then total

25. Step 4: How much cost? u Must factor in R&D, Advertising, and sales force expenditures. u Impact of production on transfer cost – Experience curve (productivity gains) – Intro new products (experience effect) Unit transfer costs decrease as a function of new product design Unit transfer costs decrease as a function of new product design See Brand Contribution: Marketing Plan See Brand Contribution: Marketing Plan

26. Step 5: What attribute changes? u Pull in data from MDS or Semantic scales indicating desired physical characteristics. u Examine actual vs. perceived attributes (Product Design) – Estimate brand perceptions – Estimate physical characteristics for positioning

27. Repositioning: What to do after product has been on the market. u Specify Target Segment(s) u Specify perceptual objectives for the brand. (pick 2) – Economy, performance, convenience u Allocate advertising budget. u Allocate ad research budget.