Marketing strategies are built on segmentation,
targeting, and positioning. Positioning
is the act of designing a company’s offering and image to occupy a distinctive
place in the minds of the target market.
The goal of positioning is to locate the brand in the minds of consumers
to maximize the potential benefit to the firm.
The result is the successful creation of a customer-focused value
proposition. Deciding on the positioning
of the brand requires determining a frame of reference, identifying the optimal
points-of-parity and points-of-difference brand associations, and creating a
brand mantra to summarize the positioning.
A competitive frame of reference defines which
other brands a brand competes with and which brands should be the focus of competitive
analysis. A good starting point is to
determine the category membership, which are the products or sets of products
with which a brand competes and which function as close substitutes. Competition can be examined from an industry
and a market point of view. The industry
is a group of firms offering a product or class of products that are close
substitutes for one another. The market
approach defines competitors as companies that satisfy the same customer
need. Once marketers analyze the competitors
they must formally define the competitive frame of reference to guide positioning.
Points-of-difference (PODs) and
points-of-parity (POPs) can be defined once the competitive frame of reference
has been fixed. PODs are attributes or
benefits that consumers strongly associate with a brand, positively evaluate,
and believe they could not find to the same extent with a competitive
brand. Strong brands may have several
PODs. Three criteria to determine
whether a brand association can function as a POD include is it desirable to
the consumer, is it deliverable by the company, and is it differentiating from
competitors. POPs are attributes or
benefit associations that are not necessarily unique to the brand but may be
shared with other brands. They come in
two forms: category POPs are
associations that consumers view as essential to a credible offering within a
certain category and they may change over time; competitive POPs are
associations designed to overcome perceived weaknesses of the brand. A brand may identify more than one frame of
reference if competition widens or the firm expands into new categories. In choosing PODs or POPs marketers typically
focus on brand benefits. They may use
perceptual maps, visual representations of consumer perceptions and preferences
for choosing specific benefits as PODs and POPs.
Brand mantras are an articulation of the brand
essence and promise, economically communicating what the brand is and what it
is not in short, three- to five- word phrases.
A good brand mantra should communicate the category and clarify the
brand’s uniqueness, be vivid and memorable, and stake out ground that is
meaningful and relevant.
Establishing brand positioning requires the
consumers understand what the brand offers and what makes it a superior
competitive choice. The consumer should
be informed of a brand’s category membership before stating its PODs. Marketers can use three ways to convey a
brand’s category membership. One way is
to announce the category benefits.
Marketers frequently use benefits to announce category membership to
reassure consumers that a brand will deliver on the fundamental reason for
using a category. Another way is to
compare to exemplars. Brands that are
well-known and noteworthy in a category can help a brand specify its category
membership. Also, relying on the product
descriptor is another way to convey a brand’s category membership. The product descriptor that follows the brand
name is a concise means of conveying category origin.
Marketers realize that anything can be differentiated. Competitive advantage is a company’s ability to
perform in one or more ways that competitors cannot or will not match. Customers must see competitive advantage as a
consumer advantage and firms must focus on this to deliver high customer value
and satisfaction which leads to repeat purchasing and ultimately to high
profitability. Firms may need to
consider other dimensions of differentiation rather that those that relate to
aspects of the product and service. For
example, employee differentiation (having better trained employees who provide
superior customer service), channel differentiation (channels’ coverage,
expertise, and performance designed to make buying easier, more enjoyable, and
more rewarding for customers), image differentiation (powerful, compelling
images created that appeal to consumers’ social and psychological needs), and
services differentiation (service firms delivering more effective and efficient
solutions to consumers) can all be considered in competitive markets.
Marketing experts believe a brand positioning
should have both rational and emotional components, with PODs and POPs that
appeal to the head and the heart. Firms
should analyze potential competitive threats by monitoring the share of market,
the share of mind, and the share of heart.
If firms make steady gains in mind share then heart share will
inevitably make gains in market share and profitability.
A market leader must find ways to expand total
market demand, protect its current share through good defensive and offensive
actions, and increase market share, even if market size remains constant in
order to stay on top. The market leader
should look for new customers or more usage from existing customers. A company can search for new users among
those who might use it but do not (market-penetration strategy), those who have
never used it (new-market segment strategy), or those who live elsewhere
(graphical-expansion strategy). They can
also try to increase the amount, level, or frequency of product consumption. A market leader should also actively defend
its current business. New products and
customer services, distribution effectiveness, and cost cutting should be
developed. Defense strategies that can
be used include position defense, flank defense, preemptive defense,
counteroffensive defense, mobile defense, and contraction defense. In addition, a market leader should consider
four factors before increasing their market share. These include the possibility of provoking
antitrust action, economic cost, pursuing the wrong marketing activities, and
the effect of increased market share on actual and perceived quality.
Firms that are not market leaders are
considered market challengers, market followers, and market nichers. The market challenger must first define its
strategic objective, which is usually to increase market share, and whom to
attack. Once opponents and objectives
have been established, five attack strategies for challengers include frontal
attacks (the attacker matches its opponent’s product, advertising, price, and
distribution), flank attacks (identifying shifts that are causing gaps to
develop, then filling the gaps), encirclement attacks (attempts to capture a
wide slice of territory by launching a grand offensive on several fronts),
bypass attacks (offers three lines of approach: diversifying into unrelated
products; diversifying into new geographical markets; and leapfrogging into new
technologies), and guerrilla attacks (small, intermittent attacks). Market followers earn less than the leader
and are often not a rewarding path.
Strategies for followers include counterfeiters, cloning, imitators, and
adapters. Market nichers are leaders in
a small market.
Example:
Coca-Cola is product that has
differentiated itself from all other soft drinks. It has positioned itself in a way that everyone
world-wide recognizes its logo. It has
also had catchy jingles over the years that people remember. It has its share of competitors, but remains
the top selling soft drink. It has even
tried to develop a new product (New Coke) that was unsuccessful, but that did
not affect it. The Cola-Cola bottling
company in Atlanta is one of the most visited tourist spots in the US
attracting people from all over. Coca-Cola
also has soft drinks to represent countries around the world. No matter what it tries, its marketing
strategy has created it a top-notch reputation that has put it over the top.
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