MARKETING MANAGEMENT 12 th edition 10 Crafting the Brand Positioning KotlerKeller

10-2 Chapter Objectives  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?

10-3 Developing / Communicating Positioning Strategy SEGMENTATION TARGETING POSITIONING CRITICAL ELEMENTS OF A MARKETING STRATEGY POSITIONING  Act of designing the company’s offering and image to occupy a distinctive place in the mind of a target market.  Creates meaningful competitive differentiation  Creates the basis for a customer-focused value proposition Value Proposition  The cogent reason why a target market should buy a product  Elements of Four Ps that contribute most to differentiated competitive value Competitive Frame of Reference  Companies, products and sets of products against which a brand competes  Can be regarded as viable substitutes = category membership  To convey: announce category benefits, compare to exemplars, use product descriptor PODs POPs  Establish Points of Difference & Points of Parity w/ competitors’ attributes & benefits  Capitalizes on value add differentiators while negating competitors’ strengths  PODs Must Be: Relevent, Distinctive, Believable, Feasible, Communicable, Sustainable  Avoid contradiction of PODs with positive & negative connotations by: Using different campaigns for each, Leveraging the equity of another, Redefining the relationship SUMMARY & EXAMPLE: Positioning Statement: Target Group > Need > Brand > Concept Benefit > Competitive Point of Difference. Example: In the market place of advanced computing, multi-tasking by the ABC Company is achieved with the greatest speed and reliability over everyone else in the industry.

10-4 ProductServicesPersonnelChannelImage FormOrdering easeCompetenceCoverageSymbols FeaturesDeliveryCourtesyExpertiseMedia PerformanceInstallationCredibilityPerformanceAtmosphere ConformanceCustomer trainingReliabilityEvents Durability Reliability Repair ability Style Design Customer consulting Maintenance And Repair Miscellaneous Responsiveness Communications  Differentiation tools/options vary in accordance with enterprise marketing mix decisions  An enterprise can be differentiated along any attribute that provides value, meaning or satisfaction to a customer Differentiation Strategies DIFFERENTIATION VARIABLES - EXAMPLES

10-5 To say that a product has a life cycle asserts four things: 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. Sales and Profit Life Cycles Cost Product Life-Cycle PatternsStyle, Fashion, and Fad Life Cycles Product Life Cycle Marketing Strategies

10-6 Marketing Strategies: Marketing Strategies: Introduction Stage Introduction Stage  The Pioneer Advantage Inventor Product pioneer Market pioneer Opportunities vs shortfalls Product/market plans from profit potential analysis Single or multiple products for single and/or multiple markets Long-Range Product Market Expansion Strategy (P = Product; M = Market)  The Competitive Cycle Stages of the Competitive Cycle Marketing Strategies: Marketing Strategies: Growth Stage Growth Stage Environment = growing customer acceptance, higher sales, increased competition Objective = competitive positioning (gain share), basis for profitability growth  Improve product quality, add new product features and improved styling product features and improved styling  Add new models and flanker products  Enter new market segments  Increase distribution coverage and enter new distribution channels enter new distribution channels  Shift from product-awareness advertising to product-preference advertising to product-preference advertising advertising  Lower prices to attract next layer of price-sensitive buyers price-sensitive buyers (1)(2) NOTE: Most representative of consumer vs industrial markets Superimpose over product life-cycle curve Product Life Cycle Marketing Strategies

10-7 Marketing Strategies: Maturity Stage Environment: three stages = growth rate peaks, sales level, decline begins: intense competition & price cuts Objective: grow or maintain share, maximize profitability  Market Modification  Expand number of brand users by: 1.Converting nonusers 2.Entering new market segments 3.Winning competitors’ customers  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 way  Product Modification  Quality Improvement  Feature Improvement  Marketing Mix Modification  Prices  Distribution  Advertising  Sales Promotion  Personal Selling  Services (3) Marketing Strategies: Decline Stage Environment: Decreased sales/profits from market desire for better, newer technology solutions Objective: Minimize risk, maximize profits in the short term (company strengths, market opportunity) Options:  Increase firm’s investment (to dominate the market and strengthen its competitive position – as others are leaving)  Maintain the firm’s investment level until the uncertainties about the industry are resolved.  Decrease the firm’s investment level selectively while simultaneously strengthening the firm’s investment in lucrative niches by dropping unprofitable customer groups  Harvesting (“milking”) the firm’s investment to recover cash quickly  Divesting the business quickly by disposing of its assets as advantageously as possible. (4) Product Life Cycle Concept Critique:  Life Cycle Patterns are too variable in shape and duration  Difficult to determine what stage the product is in  PLCs are a result of the marketing mix as opposed to an inevitable course Product Life Cycle Concept Perspective:  PLCs focus on product trends separate from evolving markets  Planning must include PLC concerns in addition to, not in lieu of marketing mix, company strengths, market attractiveness, etc. Product Life Cycle Marketing Strategies

10-8 Summary of Product Life-Cycle Characteristics, Objectives, and Strategies 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 See text for complete table Product Life Cycle Marketing Strategies

10-9  Stages in Market Evolution Emergence (from a latent market) (strategy options for diffused preference markets) –A single-niche strategy (single product) (small companies) –A multiple-niche strategy (two or more new products) –A mass-market strategy (single or multiple products) Growth (success breeds new competitors of different sizes) –Market-growth stage options »Single-niche strategy (smaller companies) »Mass-market strategy (larger companies) »Multiple-niche strategy (larger companies) Maturity –All major market segments covered by two phenomenon –Market fragmentation – companies gravitate to segments –Market consolidation – segment win overs by competitors –Fragmentation born from competition, consolidation from innovation  Decline (Diminished demand from changing applications) Market Fragmentation and Market Consolidation Strategies  Dynamics of Attribute Competition  An element of Differentiation  Customer expectations are progressive  Approaches to discover new attributes:  Customer-survey processes  Intuitive processes  Dialectical processes  Needs-hierarchy process (internal / external influencers) Market Evolution

10-10 Supporting Foils Additional Supporting Foils On PODs and POPs

10-11 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

10-12 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

10-13 Addressing negatively correlated PODs and POPs  Present separately  Leverage equity of another entity  Redefine the relationship