MM: Chapter 11 Positioning differentiating Positioning and differentiating the Market Offering Through the Product Life Cycle

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

4 major positioning errors underpositioining doubtful positioning overpositioning confused positioning

Underpositioning: Underpositioning: a vague idea of the brand e.g., Siam University Overpositioning: Overpositioning: a too narrow image of the brand e.g., ABAC Confused positioning: Confused positioning: a confused image of the brand ‘ coz of too many claims Doubtful positioning: Doubtful positioning: a hard-to-believe claim of the brand e.g., ABAC ’ s medicine faculty 4 major positioning errors

Different Positioning Strategies AttributePositioning (Biyok Tower) BenefitPositioning (Smooth E) Use or ApplicationPositioning(Aspirin) UserPositioning(Vermicelli) CompetitorPositioning(DTAC) Product category categoryPositioning(Mistine) Quality/PricePositioning(Rejoice)

What is Differentiation? A process of adding a set of meaningful and valued differences to distinguish a company ’ s offering from competitors ’ offerings. A process of adding a set of meaningful and valued differences to distinguish a company ’ s offering from competitors ’ offerings.

How to Differentiate 3 steps: 3 steps: Defining the customer value model: listing all pdt or service factors Defining the customer value model: listing all pdt or service factors Building customer value hierarchy Building customer value hierarchy Deciding on the customer value package: combining important factors to make your product outperform competitors Deciding on the customer value package: combining important factors to make your product outperform competitors

Differentiation Tools 1 As differentiation opportunities varies with the type of industry, we need to identify type of industry. Volume industry Stalemated (commodity-type) industry Fragmented industry Specialized industry

Differentiation tools 2 Product -Form -Features -Performance -Conformance -Durability -Reliability -Reparability -Style -Design Image -Symbols -Media -Atmosphere -Events Channel -Coverage -Expertise -Performance Personnel -competence -Courtesy -Credibility -Reliability -Responsiveness -Communication Services - Ordering ease - Delivery - Installation - Customer Training - Customer Consulting - Maintenance and Repair -Miscell.

Product Life Cycle Products have a limited life. Product sales pass through different stages, posing different challenges. Profits rise and fall at different stages. Products require different marketing, financial, manufacturing, purchasing and HR mgmt in each stage.

Stages of Product Life Cycle Introduction Growth Maturity Decline

Types of PLC Product categories: carbonated drinks Product categories: carbonated drinks Product forms: soft drinks Product forms: soft drinks Product: cola Product: cola Branded products: Coke Branded products: Coke

Shapes of PLC Growth-slump-maturity pattern: Microwave Growth-slump-maturity pattern: Microwave Cycle-recycle pattern: TV, drugs Cycle-recycle pattern: TV, drugs Scalloped pattern: Baking Soda Scalloped pattern: Baking Soda

Strategies for each Stage of PLC IntroductionStage DecliningStage MaturityStage GrowthStage

Introduction Stage Slow sales growth Heavy distribution and promotion expenses Negative profits 4 possible strategies :- 1. Rapid skimming 2. Slow skimming 3. Rapid penetration 4. Slow penetration

Introduction Stage Pioneer advantage 1. Highly rewarding, risky and expensive 2. Early users will favor the pioneer’s brand if they try it and find it to be satisfactory. 3. Pioneer’s builds the standard of required attributes a product class should process. 4. Economies of scale, technological leadership, ownership of scarce assets and creation of entrance barriers.

Growth Stage Rapid sales growth Decline in promotion-sales ratio Improved product quality, new product features New models Enters new mkt segment Increased distribution coverage Primary dd  selective demand Lower prices for price-sensitive buyer

Dominated by a few firms. Some firms abandon weaker products. Modification strategies :- Market modification Product modification Marketing-mix modification Maturity Stage

Decline Stage Sales drops because of: Technological advances Shift in consumer tastes Increased domestic and foreign competition Drop weak product except in case it sustains the sales of other products. Ways to cope with declining industry: Increasing investment Maintaining investment Decreasing investment selectively Harvesting Divesting

Comments on PLC Concept Benefits It helps marketer interpret product and mkt dynamics. It helps characterize the main mkt strategies. It can be used to measure product performance against similar products. Disadvantages In reality, PLC does not have a fixed sequence. In reality, PLC is the result of mkting strategies rather than a course the sales must follow.