Marketing Management 5th Edition Iacobucci Solutions Manual 1

MM – Instructor Manual
Marketing Management 5th

Edition Iacobucci Solutions Manual
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CHAPTER 5 – POSITIONING
KNOWLEDGE OBJECTIVES
1. Understand the concept of positioning and its importance.

2. Learn how perceptual maps facilitate an understanding of a company’s or brand’s
position in the marketplace.
3. Introduce the positioning matrix.
4. Identify the essential elements of a positioning statement.
CHAPTER OUTLINE
▪ What is Positioning and Why is It Probably the Most Important Aspect of

Marketing?
▪ Writing a Positioning Statement
▪ Managerial Recap
5-1. What is Positioning and Why is It Probably the Most Important Aspect of
Marketing?
1
© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
This section relates to knowledge objective #1.
Positioning is about identity—who your brand or company is in the marketplace, vis-à-

vis the competition, and in the eyes of the customer. It involves all the marketing mix
variables: product, price, place, and promotion.
TEACHING NOTE: Ask students to say the first words that come to their mind when
the following brands are mentioned: Mercedes, The Gap, Starbucks, IKEA, Apple, and
Target. Write their answers on a whiteboard and then discuss their responses. This
activity will help students understand how these companies have positioned their
products in the minds of customers.
5-1a. Positioning via Perceptual Maps
Perceptual maps are graphical depictions of the positioning of particular brands with
respect to their competitors. These pictures help marketers envision how customers think
about their brands.
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Figure 5.1: Competition in Perceptual Maps
Figure 5.1 shows a perceptual map of four brands of watches (Seiko, Timex, Rolex, and
Swatch). Brands presented close together are perceived to be similar (Seiko and Timex),
whereas brands farther apart are seen as more different (Swatch and Rolex). The Seiko
and Timex would be preferred by consumer segment 1. The consumer segment 2 area is
empty, offering opportunities for additional brands.
TEACHING NOTE: Students could be asked to draw a perceptual map for five
electronic gadget manufacturers to highlight their competitive positions. Students can
rate these companies on dimensions such as affordability, quality, innovativeness,
durability, and the like.
Figure 5.2: Positioning via Perceptual Maps
This figure is a perceptual map of cities in which a large, global hotel company has
resorts. The company wants to know more about its customers’ travel needs, because it is
trying to redesign some of its vacation packages. The factors considered here are price,
beaches, and points of interest. The map also identifies two customer segments.
Analyzing the map in detail will help the company understand the hotel’s current
positioning and the needs of its customers.
TEACHING NOTE: The instructor could ask the students to redraw Figure 5.2 by
retaining the price dimension and changing the other dimension to “seasons of the
year.” Ask them to observe the changes that occur in the figure and discuss how this
would impact the positioning of each of the resorts.
TEACHING NOTE: Should a firm change its positioning depending on the market?
What are the potential advantages and disadvantages of doing this? Ask students for
their viewpoints and discuss.
Figure 5.3: Perceptual Map: Strengths and Weaknesses of a Yoga Studio
This figure contains descriptors for a single service provider, a yoga studio. The figure
tells us that patrons think the location isn’t great and the staff is great. Neither factor is
important to the patrons. However, patrons do care about the morning classes, which
have received low ratings. The yoga studio should take action to improve the morning
classes before it loses patrons.
3
Figure 5.4: Perceptual Map: Competition
This figure allows us to determine the perceived strengths and weaknesses of our yoga
studio (studio 1) compared with yoga studios 2 and 3. Our yoga studio is seen as
relatively expensive. It is dominated by both studios 2 and 3 in patron satisfaction with
morning classes.
One of the limitations of perceptual maps is that they typically look at only two attributes
at a time.
Figure 5.5: Competitor Analysis
The figure is a bar chart comparing the three yoga studios on four attributes: price, good
location, staff, and morning classes. This figure shows that there are alternative ways of
conducting a competitor analysis. The graph clearly shows that yoga studio 1 has a
competitive advantage in terms of staff, but not in terms of location or morning classes.
In price, it matches yoga studio 3.
5-1b. The Positioning Matrix
The positioning matrix is the company’s position in the marketplace. For example, a
company could offer good value or luxury products.
Figure 5.6: Marketing Management Framework Product Quality by Price
This figure shows the juxtaposition of product and price. The basic 2×2 matrix shows that
a match of low-low and high-high makes sense. Brands that offer high quality at low
prices and vice versa have a short life.
Figure 5.7: Marketing Management Framework Promotion by Distribution
This figure shows an analogous 2×2 matrix for promotion and distribution. If a company
promotes broadly and heavily, it is probably looking to move a lot of merchandise, and so
it would be smart to make the goods widely available. Similarly, if a brand has a more
exclusive image and distribution chain, it would make better sense not to overly promote
it.
Figure 5.8: Marketing Management Framework: All 4P’s: Product by Price by Promotion
by Place
This figure shows all 16 combinations of the 4Ps.
4
Figure 5.9: Some Strategies Don’t Make Sense
The figure suggests eliminating the “low price” and “exclusive distribution”
combinations.
This figure indicates the possibility of eliminating the combinations that involve the
“high price” and “low quality” strategies.
The figure suggests that the “heavy promotions” and “exclusive distribution”
combinations should also be eliminated.
Figure 5.12: Some Strategies Are Hard to Sustain
The figure shows that the “good value” purchase—high quality at relatively low prices—
is a position that is hard to sustain.
Figure 5.13: Some Strategies Are Hard to Sustain
This figure shows that the “wide distribution” and “light promotion” combinations are
rather inactive strategies.
Figure 5.14: Quality and Price Tend to Re-Align (see Figures 5.10 and 5.12)
This figure shows that we don’t often see overpriced or good value products. We more
often see “basics” (low price, low quality) or “high-end” products (high price, high
quality).
Figure 5.15: Promotion and Distribution Tend to Re-Align (see Figures 5.11 and 5.13)
This figure shows that we usually see a match on heaviness of promotion with greater
availability in the marketplace.
TEACHING NOTE: Students could be asked to identify 10 FMCG companies, and,

using Figure 5.14 and/or Figure 5.15, plot them according to their use of any of the
eight strategies (other than those subsequently listed in Figure 5.17).
Students should be able to identify “basics,” “high-end,” “mass,” and “niche”
positioning strategies.
5
Figure 5.16: Two Strategies Make Perfect Sense
This figure depicts the following two strategies:

• low price, low quality, widely available, heavy promotions, and
• high price, high quality, exclusive availability, light promotions.
Figure 5.17: Example Brands in the Framework
This figure shows that many brands may be classified in the extreme upper-left and
lower-right cells—the optimal combinations. But there can be exceptions. Some brands
appear in all the other suboptimal combinations.
There are other management strategies that are consistent with the two basic positioning
strategies proposed.
Michael Treacy and Fred Wiersema in The Discipline of Market Leaders identify three
basic corporate strategies to creating value and achieving market stature:
• operational excellence (FedEx and Southwest Airlines),
• product leadership (Apple and BMW), and
• customer intimacy (Verizon and Amazon)
In the matrix, operations and products would map roughly onto the low costs and high
quality cells, respectively. Customer intimacy is simply good service so that can be
classified in the high quality cell as well.
Michael Porter, in his books on Competitive Strategy, discusses generic strategies driven
by keeping costs down and prices competitive, by leading by differentiation or when
appropriate, by niche positioning. The latter is merely a matter of exclusivity and size,
and the first two can be mapped onto the low-price vs. high-quality basic combinations.
5-2. Writing a Positioning Statement
Once a company has decided on its positioning, either for the corporation as a whole, or
for one of its brands, it must be able to communicate succinctly the parameters of that
position to a number of different audiences (to customers, employees, shareholders,
general public, etc.).
A positioning statement includes the specification of the target segment(s). Another

important element is the unique selling proposition (USP). The idea is to express a
brand’s competitive advantage clearly and succinctly.
6
The positioning statement can serve as an internal memorandum keeping all managers
aligned as a basic guiding principle in all their collective decisions, so as to enhance the
likelihood of consistencies in the results of those decisions. They can also serve as the
foundation of the communications offered to external audiences, including customers,
shareholders, and the like as advertising taglines, or more extensive messages.
MANAGERIAL RECAP
Positioning is central to the marketing manager’s activities. Perceptual maps facilitate an

understanding of a company’s or brand’s position in the marketplace. Positioning is
achieved via a manipulation of the marketing mix 4Ps. The positioning matrix identifies
the combinations that make the most sense. Positioning statements help guide marketing
strategies and tactical actions.
SUGGESTED ANSWERS TO MARKETING PLAN QUESTIONS
Encourage students to download an Excel® spreadsheet on the book’s website at

www.cengagebrain.com that contains all of these Chapter 17 tables to assist them in
developing a marketing plan. A set of marketing plan questions is provided in the
Instructor’s Manual as a guide to help students develop a marketing plan as they take the
course and work through the chapters. By Chapter 17, all of the pieces will have come
together and created a marketing plan if the students work through each section as they
study each chapter. The Marketing Plan tear-out reference card in the student edition of
MM serves as a chapter guide for the students to know when to fill out each section of the
Marketing Plan.
Positioning: Fill in descriptions here:

Strategically choose high-quality/high-price or
basic-product/low-price position: Position 1
Show how strategic position compares to competitors’ positions: Position 2
Sketch distribution (wide or exclusive) and promotion plans (mass, light): Position 3
Position 1:
Strategically choose high-quality/high-price or basic-product/low-price position:
Given the suggested concept of an energy drink for women, it is unlikely that the product
would be positioned as a basic-product/low-price product. It would more than likely be
positioned as a high-quality/high-price product. The rationale is to simply ask students
these two questions: For an energy drink, what attributes or benefits would comprise low
quality? Then ask, would you drink an energy drink that was lacking those
dimensions/attributes? It is possible that the product “could” be lower in caffeine so that
it is positioned, for example, with 60 mg of caffeine per serving rather than the 80 mg per
serving that most other brands have (RockStar, Red Bull, Full Throttle, Monster, AMP,
etc). A question would be why the firm would intentionally market the product with less
caffeine. The product could also be marketed with less sugar, but that does NOT
necessarily mean that the product is viewed as being lower quality. However, sugar is
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energy so less sugar means less energy. Most products are priced between $1.99 and
$2.99 per unit. The question is how much further below $1.99 the product would have to
be priced to be viewed as low priced. $0.10? 10%? Get students to reflect upon that.
Position 2:
Show how strategic position compares to competitors’ positions:
Students should develop a two-dimensional perceptual map.

Aggressive/threatening versus passive/accommodating could be one dimension and
caffeine or calories or grams of sugar could be the other dimension. It would most likely
be that the new product would be in a quadrant by itself, with possibly Red Bull being the
closest competitor.
Position 3:
Sketch distribution (wide or exclusive) and promotion plans (mass, light):
Students would likely comment that wide distribution would mimic a distribution
strategy similar to Red Bull, utilizing convenience outlets, grocery stores, and large
multi-format stores like Target and Walmart in which multi-packs and single cans would
be available. Conversely, an exclusive distribution strategy would focus on a single style
of outlet, mainly health clubs, boutique grocery stores, or convenience stores only (such
as your local gas-n-go). Mass promotion plans would simply entail a media blitz of most
outlets available, including TV, print, Web, event sponsorship, product placement, and
the like. A light promotion plan would quite possibly focus on print (magazine) only to
niche vehicles (Self or More magazines).
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
1. If you were to create a perceptual map for the product category of watches, what
attributes should you include to illustrate both the similarities and differences
among the brands?
Answer:
Brand, price point, watches for men (high-tech looking and lots of gadgets) or
women (looking like jewelry).
BUSPROG: Reflective Thinking
Tier II: DISC: Strategy
Tier III: MBA: Generative Thinking
Bloom’s: Analysis
Topic: Positioning via Perceptual Maps
Difficulty: Moderate
8
2. Find a company that is struggling. Where is it in the positioning matrix? Could

the company be more successful if it changed any of its Ps (e.g., to head to the lo-
lo-lo-lo or hi-hi-hi-hi cells)?
Answer:
Take one of the big American car companies (what a sad story!). Within that, take
one of its car lines. Is the car high quality or low? Reasonably priced or too high?
etc. Post-bailout, see if the students can recognize that it’s still salvageable, if the
Ps were modified.
BUSPROG: Reflective Thinking
Bloom’s: Analysis
Topic: The Positioning Matrix
3. Write a position statement for yourself to convince your favorite company to hire
you.
Answer:
This will obviously depend on the student, but should include the target audience
(that company, or that industry, or that kind of job regardless of company or
industry) and the student’s particular strengths.
BUSPROG: Communication
Tier II: DISC: Creativity
Bloom’s: Application
Topic: Writing a Positioning Statement
VIDEO EXERCISE & DISCUSSION QUESTIONS
Numi Organic Tea
Numi Tea founders, siblings Ahmed and Reem Rahim, immigrated to the United States
when they were young children and grew up in Cleveland, Ohio. Reem became a
biomedical engineer. Ahmed traveled the world as a photographer and settled for a time
in Prague where he opened two tea shops. Reem eventually left her career to pursue life
as an artist. In 1999, the two reconnected in Oakland, California, and started Numi Tea in
Reem’s apartment.
“I think in the positioning of our brand, we wanted to target a certain type of customer
base, from the natural health food stores, to fine dining and hotels, to universities and
coffee shops, gourmet stores,” says Ahmed. “What I’ve been most surprised about in our
growth is the mass market consumer.” In recent years, demand by the average American
consumer for organic and ethically produced products has exploded. At the same time,
economic influences have driven the more affluent and natural foods consumers to large
9
discounters such as Target, super-size grocery chains, warehouse clubs, and online
shopping.
Today, explains Jennifer Mullin, vice president of marketing for Numi Tea, the average
Numi consumer is female, is college educated, and buys two to three boxes of tea per
month, usually green tea. She also buys organic products whenever possible. All of these
details, while not surprising, are fairly new. Until Mullin joined the team and formalized
its marketing department, Numi assumed its customers fit the same profile as the staff—
young, cool, and urban. While many Numi tea drinkers are all these things, Mullin’s
findings proved that the company needed to put some additional energy toward targeting
the younger, college market. It launched an initiative to raise awareness of the product on
campuses where people are more inclined to be interested in issues of sustainability, fair
trade, and organics. Because Numi teas are considered a premium product, they do have
an affordable, but still higher price point than conventionally produced teas. College
students in general have less money to spend, so Numi approached the food service
departments of universities such as Stanford to serve the tea as part of their prepaid meal
plans. Not only does the food service contract represent a giant account, but it also
encourages trial. Sampling is Numi’s most successful marketing activity for attracting
new users. Students can learn to love the product, essentially for free.
The most compelling reason for drinking Numi tea is its health benefits. The company
found that it doesn’t need to spend much time talking up the organic aspect of its product.
In the premium and natural foods space where Numi operates, organic is expected. There
is the threat that as the terms “organic” and “natural” invade the mainstream marketplace,
a lack of trust or cynicism may arise as some products will inevitably fail to live up to
their labels’ claims. This is why Numi relies heavily on educating its consumers about the
product. When targeting women, its most valued consumer, says Jennifer, “we have an
in-house PR team that works a lot with editors [of women’s magazines] to educate them
on tea and make sure they understand the healthy properties of tea.” They follow up with
sampling at Whole Foods or events targeted toward environmentally conscious moms.
Numi rounds out the education efforts on its website with more health information as
well as in-depth articles on the benefits of specific teas.
Although still young, the Numi brand is expanding rapidly and has enjoyed success
overseas as well. Whatever the marketing and PR teams do—store sampling,
environmental events, or partnerships with like-minded companies such as Clif Bar—
they continue to survey and assess the demographic and psychographic profiles of their
consumer.
1. Describe Numi’s product line in terms of the four Ps of marketing: product, price,
place, and promotion.
Answer:
The product component of the marketing mix is a high-quality tea that is
formulated using premium, organically grown ingredients. The price component
reflects Numi’s organic tea being priced as a premium or upscale product. The
place component has focused primarily on upscale outlets⎯namely, natural and
10
health food stores, fine dining restaurants and hotels, universities, and coffee
shops. Recently, however, Numi has broadened the place component by
distributing its teas through grocery stores, club stores, and website sales. The
promotion component focuses on providing product samples and participating in
events that promote various kinds of organic and fair-trade products; this helps in
positioning Numi organic teas as a premium tasting, premium quality product.
BUSPROG: Analytic
Tier III: MBA: Strategic and systems skills
Bloom’s: Analysis
Topic: What Is Positioning and Why Is It Probably the Most Important Aspect of
Marketing?
2. Incorporating product, price, place, and promotion into the strategic marketing
management framework, describe the strategic positioning of Numi’s product
line.
Answer:
The product by price by place by promotion matrix is an analytical tool for
determining viable strategic marketing strategies. Given that Numi organic teas
are high-quality, premium teas (i.e., product) sold at a premium price, any
strategy involving either low quality or low price would not be a viable marketing
strategy. Therefore, in the following positioning matrix, the cells marked with X
are not viable strategies. This eliminates 12 possible strategies, leaving four
strategies that Numi can pursue. These four strategies differ in terms of
distribution (i.e., place) and promotion. Numi is not a heavily promoted product
because it is promoted by providing product samples and participating in events
that promote various kinds of organic and fair-trade products; therefore, the cells
containing YY can be eliminated. This leaves distribution (i.e., place) as the
determining marketing mix variable. Numi had been pursuing the strategy of
exclusive distribution of a lightly promoted, high-priced, high-quality product
(see the cell labeled AAA). More recently, surprising growth in the mass
marketing of Numi organic teas has occurred at grocery stores and club stores in
the United States and on websites. This strategy reflects the wide distribution of a
lightly promoted, high-priced, high-quality product (see the cell labeled BBB).
Wide Distribution Exclusive Distribution

Low High Low High
Quality Quality Quality Quality
Heavy Low Price X X X X
Promotion High Price X YY X YY
Light Low Price X X X X
Promotion High Price X BBB X AAA
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BUSPROG: Analytic
Tier III: MBA: Strategic and Systems skills
Bloom’s: Synthesis
Marketing?
Difficulty: Challenging
3. Does this strategic positioning make good marketing management sense or not?
Explain your answer.
Answer:
The dual strategy makes sense because this enables Numi to significantly grow its
sales volume by expanding distribution. Although wide versus exclusive
distribution is in conflict, according to Numi’s managers, the key to dealing with
this conflict lies in knowing who the company’s customers are and where they are
shopping. In short, customers who want premium teas are willing to pay a
premium price, do not need to be solicited through heavy promotion, do indeed
shop at grocery stores and club stores as well as online. Most of these people do
not shop only at exclusive outlets.
BUSPROG: Analytic
Tier III: MBA: Strategic and Systems Skills
Bloom’s: Evaluation
Marketing?
From BOONE/KURTZ. Contemporary Marketing, 14E. © 2010 South-Western, a part of Cengage

Learning, Inc. Reproduced by permission. www.cengage.com/permissions
SUGGESTED ANSWERS TO MINI-CASE: POSITIONING FAST FOOD
1. Chipotle is more in the high-quality, high-cost, exclusive distribution, and low

promotion cell of the positioning matrix. McDonald’s would be happy to be seen as
relatively low price, wider distribution, and higher promotion, but it might not wish to
“own” a position of lower quality.
BUSPROG: Analytic
Bloom’s: Analysis
12
2. The foodstuffs Chipotle sells might be a little different from McDonald’s and it does
not have a drive-through so they might not consider each other intensely proximal
competition. On the other hand, defining competition more generally, such as the
answer to the “so where do you want to go for lunch?” question, they do coexist in a
competitive set.
BUSPROG: Analytic
Bloom’s: Analysis
3. McDonald’s could not, nor would it wish to, become more exclusive (close some
franchises?), so it has product, price, and promotion to modify. It frequently tries to
offer healthier fare, but perhaps it might want to just “own” its convenient,
inexpensive, family position. Chipotle might need help on operations, given that any
shop that customizes will be slower. In addition, its sit-down environment might be
modified to appear somewhat more upscale if that is the positioning it seeks or, if you
believe it already owns it, seek to maintain it.
BUSPROG: Analytic
Bloom’s: Analysis
13

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MM – Instructor Manual

Marketing Management 5th

Solution Manual: https://testbankpack.com/p/solution-

Test Bank: https://testbankpack.com/p/test-bank-for-

1. Understand the concept of positioning and its importance.

▪ What is Positioning and Why is It Probably the Most Important Aspect of

This section relates to knowledge objective #1.

Positioning is about identity—who your brand or company is in the marketplace, vis-à-

5-1a. Positioning via Perceptual Maps

This section relates to knowledge objective #2.

Figure 5.1: Competition in Perceptual Maps

Figure 5.2: Positioning via Perceptual Maps

Figure 5.3: Perceptual Map: Strengths and Weaknesses of a Yoga Studio

Figure 5.4: Perceptual Map: Competition

Figure 5.5: Competitor Analysis

5-1b. The Positioning Matrix

This section relates to knowledge objective #3.

Figure 5.6: Marketing Management Framework Product Quality by Price

Figure 5.7: Marketing Management Framework Promotion by Distribution

This figure shows all 16 combinations of the 4Ps.

Figure 5.9: Some Strategies Don’t Make Sense

Figure 5.10: Some Strategies Don’t Make Sense

Figure 5.11: Some Strategies Don’t Make Sense

Figure 5.12: Some Strategies Are Hard to Sustain

Figure 5.13: Some Strategies Are Hard to Sustain

TEACHING NOTE: Students could be asked to identify 10 FMCG companies, and,

Figure 5.16: Two Strategies Make Perfect Sense

This figure depicts the following two strategies:

Figure 5.17: Example Brands in the Framework

5-2. Writing a Positioning Statement

This section relates to knowledge objective #4.

A positioning statement includes the specification of the target segment(s). Another

Positioning is central to the marketing manager’s activities. Perceptual maps facilitate an

SUGGESTED ANSWERS TO MARKETING PLAN QUESTIONS

Encourage students to download an Excel® spreadsheet on the book’s website at

Positioning: Fill in descriptions here:

Students should develop a two-dimensional perceptual map.

SUGGESTED ANSWERS TO DISCUSSION QUESTIONS

2. Find a company that is struggling. Where is it in the positioning matrix? Could

VIDEO EXERCISE & DISCUSSION QUESTIONS

Numi Organic Tea

Wide Distribution Exclusive Distribution

From BOONE/KURTZ. Contemporary Marketing, 14E. © 2010 South-Western, a part of Cengage

SUGGESTED ANSWERS TO MINI-CASE: POSITIONING FAST FOOD

1. Chipotle is more in the high-quality, high-cost, exclusive distribution, and low

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