Positioning Lecture 4

POSITIONING

  • Positioning (Action):

    • The act of framing the brand in the minds of target consumers

    • Aims for the brand to occupy a distinct and valued place in relation to competitors.

  • Position (Outcome):

    • The actual perception of the brand in the minds of target consumers

    • Relative to competitors.

AGENDA

  • Key Topics to Cover:

    • Positioning: What is it?

    • Positioning statement

    • Types of positioning concepts

    • Positioning Tools:

    • Perceptual Maps

    • Qualitative Methods

THE IMPORTANCE OF POSITIONING

  • The Quotes:

    • "There is no such thing as a commodity" - Theodore Levitt

    • Interpretation: Highlights the potential for differentiation in every product/service despite common perceptions.

    • "No matter how commonplace a product may appear, it does not have to be a commodity. Every product, every service can be differentiated" - Dermot Dunphy, CEO, Sealed Air Corp.

    • Meaning: Every product has unique characteristics that can be emphasized to stand out.

    • "Perception is reality" - Bishop Berkeley

    • Understanding: Focus on how perceptions shape consumer behavior.

    • "Facts are facts, but perception is reality" - Albert Einstein

CREATING VALUE THROUGH POSITIONING: SUPER PREMIUM VODKA

  • Definition:

    • Defined by Federal regulations

    • "Neutral spirits so distilled or so treated after distillation with charcoal or other materials as to be without distinctive character, aroma, taste or color"

  • Examples of Super Premium Vodka:

    • Stolichnaya (Russia)

    • Absolut (Sweden)

    • Finlandia (Finland)

    • Denaka (Denmark)

    • Elduris (Iceland)

    • Tanqueray Sterling (UK)

  • Pricing Analysis:

    • Average price around 20−2520-25 versus 1010 for a 750 ml bottle

    • "Ultra Premium" vodka (e.g., Chopin, Stoli Cristall) priced at more than 4040 per 750 ml

POSITIONING STATEMENT

  • Definition:

    • An exercise and tool designed to clarify the positioning strategy and align all marketing, sales, and product development teams

    • Non-emotional factual statement intended to guide the creation of a go-to marketing plan

    • Foundation for all customer messaging

    • Internal tool not shared with customers

    • Battle cry for marketing and sales teams

  • What the Positioning Statement Is Not:

    • A tagline

    • An advertising slogan

    • A business plan

    • A marketing message

  • Structure of the Positioning Statement:

    • For [target segment], [the product] [most important claim/point of difference] because [single most important support]

    • Example 1:

      • For business travelers, Avis provides the best customer service, because it’s #2 and tries harder.

    • Example 2:

      • To business managers and professionals engaged in making time-sensitive decisions about international business, DHL delivers on time because its pickup, transportation and delivery system is wholly-owned and managed by DHL personnel, not by third-party providers.

VALUABLE DIFFERENTIATION

  • Key Principle:

    • The critical element of a successful positioning strategy is valuable differentiation.

    • Company decision-making must follow a clearly communicated differentiation path.

MORE EXAMPLES OF POSITIONING STATEMENTS

  • Example 3:

    • For do-it-yourselfers, Home Depot offers the best prices because we are the largest building supply company.

  • Example 4:

    • For short-route travelers, SouthWest offers the best prices with reasonably dependable service because we don’t charge for amenities.

POSITIONING DRIVES YOUR DECISIONS

  • Quoting Herb Kelleher:

    • "We are THE low-fare airline. Once you understand the fact, you can make any decision about this company’s future as well as I can."

  • Implications:

    • Underlines how positioning serves as a compass for strategic organizational decisions.

SIMPLICITY IN POSITIONING

  • Advice:

    • Many brands attempt to be multiple things

    • Keep it simple and memorable to make your positioning stick

  • Key Thought:

    • The differentiation should focus on one or a few important dimensions, avoiding overcomplication.

OVERCOMPLICATED BRAND POSITIONING

  • Common Trends in Brand Positioning:

    • Brands often proclaim:

    • "Our brand is important"

    • "Many people are involved"

    • "We have a big budget"

    • Thought Process:

    • More is not necessarily better.

DIFFERENTIATION IN POSITIONING

  • Understanding Differentiation:

    • Differentiation not only refers to the core product itself.

PRODUCT EXAMPLE: ABSOLUT VODKA

  • Product Description:

    • Country of Origin: Sweden

    • Product type: Vodka

    • Description: This superb vodka was distilled from grain grown in the rich fields of southern Sweden in accordance with more than 400 years of Swedish tradition.

    • Alcohol Content: 40% ALC./VOL. (80 PROOF) - 1 Liter

CHANNELS OF DISTRIBUTION

  • Example:

    • Apple Store as a channel of distribution.

EXAMPLES OF POSITIONING STRATEGIES: STEPS AND ATTRIBUTES

  • Positioning Types:

    • Features and benefits

    • Price/Quality

    • Competitor

    • Product user

    • Symbol and imagery

  • Each type can be employed to express different facets of positioning.

PERCEPTUAL MAPS

  • Purpose:

    • Visualization of competitive structure of markets based on target customer perceptions.

  • Components of Mapping:

    • Dimensions of importance to customers

    • Locations of competing products according to perceptions

    • Locations of customer preferences

USES OF MAPPING TECHNIQUES

  • Mapping Techniques Applications:

    • New product decisions

    • Opportunity identification

    • Concept testing

    • Identifying competitors as viewed by the customer

    • Evaluating success of positioning or repositioning strategies

    • Consideration of limitations

CREATING PERCEPTUAL MAPS FOR BEERS

  • Attributes Evaluated:

    • Budget to Premium Spectrum

    • Light to Heavy Spectrum

IDENTIFYING ATTRIBUTES

  • Sources of Information:

    • Secondary Sources:

    • Marketing communications

    • Packaging

    • Promotion materials

    • Primary Sources:

    • Customer interviews and focus groups

    • Surveys to assess the importance of attributes

POSITIONING TAKEAWAYS

  • Summary Points:

    • Positioning involves the perception of the brand in the mind of the target consumer relative to competing brands.

    • The positioning statement facilitates coordination and integration of various elements of the marketing mix.

    • Provides a rallying point for different organizational components, such as R&D, marketing, production, operations, and finance.

    • Customer research is a pivotal input for sound positioning decisions, utilizing both quantitative and qualitative methods such as perceptual maps, brand personification, and Zaltman Metaphor Elicitation Technique (ZMET).

POSITIONING STATEMENT APPLICATIONS

Positioning statements are practical tools used to clarify strategy and guide marketing efforts. Here are some examples of how they are applied:

  • Example 1: Avis Car Rental

    • For business travelers, Avis provides the best customer service, because it’s #2 and tries harder.

  • Example 2: DHL International Shipping

    • To business managers and professionals engaged in making time-sensitive decisions about international business, DHL delivers on time because its pickup, transportation and delivery system is wholly-owned and managed by DHL personnel, not by third-party providers.

  • Example 3: Home Depot Retailer

    • For do-it-yourselfers, Home Depot offers the best prices because we are the largest building supply company.

  • Example 4: SouthWest Airlines

    • For short-route travelers, SouthWest offers the best prices with reasonably dependable service because we don’t charge for amenities.

These examples illustrate how specific companies craft statements to define their target segment, primary benefit, and key differentiator, serving as an internal guide for all strategic decisions.

PERCEPTUAL MAP APPLICATIONS

Perceptual maps are visualization tools that help understand market structure based on customer perceptions. Their applications include:

  • New Product Decisions: Identifying gaps in the market for potential new products.

  • Opportunity Identification: Discovering underserved customer segments or unmet needs.

  • Concept Testing: Evaluating how new product concepts are perceived relative to competitors.

  • Identifying Competitors: Understanding which products or brands customers view as direct competition.

  • Evaluating Strategies: Assessing the success of current positioning or repositioning efforts.

Example: Creating Perceptual Maps for Beers

  • Objective: To understand how different beer brands are perceived by customers.

  • Attributes Evaluated:

    • Budget to Premium Spectrum (ranging from affordable to luxury)

    • Light to Heavy Spectrum (ranging from light-bodied to full-bodied beers)

By plotting various beer brands on these two dimensions, a company can visually identify its position, analyze competitive landscape, and determine potential areas for new product development or repositioning strategies. This allows for data-driven decisions that align with target customer perceptions.