Crafting A Customer Value Proposition and Positioning

12/7/2023
Discussion Questions
1 1. Explain how a company should develop a
7
value proposition and a positioning strategy.
2. Describe how a company chooses a frame
Crafting a Customer of reference.
Value Proposition 3. Discuss how a company identifies points

of parity and points of difference.
and Positioning 4. Define the key strategies for creating a
sustainable competitive advantage.
5. Identify alternative strategies to communicate
the positioning of a company‘s offerings.
16/e Copyright © 2023 Pearson Education, Inc. Publishing as Prentice Hall 7-2
Positioning Positioning
• What comes to your mind? Positioning maps show consumer perceptions of
• What you expect from a shampoo? marketer‘s brands vs. competing products on
important buying dimensions
Copyright © 2023 Pearson Education, Inc. Publishing as Prentice Hall 7-3 Copyright © 2023 Pearson Education, Inc. Publishing as Prentice Hall 7-4
Develop a Value Proposition and

Positioning Develop a Value Proposition
Develop a Value Proposition

• The value proposition consists of the whole
cluster of benefits the company promises to
Develop a Propositioning Strategy
deliver
̶ It is more than the core positioning of the offering
Choose a Frame of Reference
• An offering creates value across 3 domains
Identify the Potential PODs and POPs ̶ Functional
̶ Psychological
Create Sustainable Competitive Advantage ̶ Monetary
Communicate the Offering‘s Positioning

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Conduct a Customer Value Analysis Develop a Positioning Strategy
• Positioning the act of designing a

• The steps are:
company‘s offering & image to occupy a
1) Identify the relevant attributes & benefits that distinctive place in the minds of the target
customers value market
2) Assess the relative importance of these
attributes & benefits • Effective positioning guide MKT strategy by
3) Assess the company‘s and competitors‘ ̶ clarifying the brand‘s essence & its goals
performance on the key attributes/benefits ̶ showing the approach in addressing these goals
4) Monitor customer value over time
• Everyone in the org uses it as the context for
making decisions
Develop a Positioning Strategy Develop a Positioning Strategy
• Include both rational & emotional

components
• Positioning requires that marketers
• Use the brand substitution test to measure
a) Choose a FOR
the org‘s positioning effectiveness
b) Identify the optimal POPs & PODs given that
• A well-positioned brand should be distinctive FOR
in its meaning & execution
• Ensure it has one foot in the present & one in
the future
Choose a Frame of Reference Identify Competitors
• A frame of reference defines: • Determine CM: Gatorade vs. Pepsi

– Which other brands a brand
competes with
• Examine competitors:
– An industry point of view— firms offering a
– Which brands should be the focus
product or class of products that are close
of competitive analysis
substitutes for one another
• Identify Competitors – A market point of view— firms satisfying the
same customer needs
• Analyze Competitors
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Analyze Competitors Table 10.2 Customer Ratings of Competitors
• Make SWOT analysis

• Know each competitor‘s real & perceived
S/W, objectives, and strategies
• Then ask:
– What each competitor seeks in the marketplace?
– What drives each competitor‘s behavior?
– If it is a division, why is the parent company
running it?
Identify Potential PODs Identify Potential PODs

• PODs are unique attributes that give your
product a CA over the competition Criteria to Determine PODs
– Attributes that consumers strongly associate with a Relevant
brand, positively evaluate, and believe that they
Desirable to consumers
cannot find to the same extent with a competitive Believable
brand
Feasible
• Strong brands often have multiple PODs Profitable
Deliverable by the company
– Nike (performance, innovative tech, & winning) Communicable
Distinctive
Differentiating from competitors
Superior
Identify Potential POPs POD vs. POP Example
• POPs are the attributes (benefits) that

closely match what the competition is
American
offering Express‘s POD:
– Attributes are not necessarily unique to the brand ―the prestige
but may be shared with other brands associated with
the use of its
card.‖
• 3 forms of POPs
– Category POPs
– Competitive POPs
– Correlational POPs Visa‘s POD: ―the most widely available card,
which underscores the category‘s main benefit of
convenience.‖
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Aligning Multiple FOR, POPs, & PODs Straddle (Dual) Positioning
• A brand may consider multiple FOR, if • The company positions its brand in 2 distinct
competition grows or the company expands categories simultaneously with one set of
into new categories PODs & POPs
– SP allows brands to expand their market coverage
– Starbucks defines distinct set of competitors and
& potential customer base
uses different possible POPs & PODs as a result
– The PODs for one category become POPs for the
– Quick-serve restaurants (McDonald‘s) and
other and vice versa
convenience shops (Dunkin‘ Donuts)— intended
PODs: quality, image, experience, & variety; – Often a good positioning will have several PODs &
intended POPs: convenience & value POPs
Straddle (Dual) Positioning: Example Create a Sustainable CA
• To build a strong brand & avoid the

• Subway positions its brand as healthy, good- commodity trap, differentiate an offering by
tasting sandwiches creating a SCA
– A POP on taste and a POD on health with respect – CA is a company‘s ability to perform in one or more
to quick-serve restaurants ways that competitors cannot or will not match
– A POP on health and a POD on taste with respect – Most CAs are replicable
to health food restaurants
– BMW‘s positioning: Luxury and performance
• Porter urged to build ‗SCA‘
The Concept of Sustainable CA Strategies for Creating a SAB
• A SCA is difficult to replicate and should be 1. Differentiate on an existing attribute

leveragable – Gillette has differentiated by stressing the
quality of its shave
• A leverageable advantage is a foundation
for building further advantages 2. Introduce a new attribute
– Microsoft uses of its operating system to develop – Introduce a new attribute
MS Office & then, networking applications
3. Build a strong brand
– Powerful brand uses the sources of SCA
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Communicate the Offering’s

Craft a Positioning Statement
Positioning
• Positioning statement For busy

• After creating the brand positioning clearly articulates the professionals (target
strategy, marketers should share it with offering‘s target customers), Hertz
the entire org to align everyone's words customers and the key offers a fast,
convenient way to
& actions benefit that will provide
rent the right type of
customers with a reason car at an airport
to choose the offering (value proposition)
Craft a Positioning Statement Communicate Category Membership
• When a product is new, inform consumers

• Decide whether to promote the specific
of the brand‘s CM
attributes or ultimate benefits
– Attributes generally play more of a supporting • Consumers must believe that brand is a
role valid member of the category
– Multiple attributes may support a certain benefit, – Highlight a brand‘s POD, if consumers do not hold
& they may change over time membership in the category
– Attributes provide ―reasons to believe‖ or ―proof – Inform consumers of a brand‘s membership before
points‖ stating its POD
Communicate Category Membership Communicate Conflicting Benefits
• Three main ways to convey a brand‘s CM • One common challenge in positioning is that
many of the benefits (POPs & PODs) are
a) Announcing category benefits
negatively correlated
b) Comparing to exemplars
– The challenge is that consumers typically want to
c) Relying on the product descriptor that follows maximize both of the negatively correlated
the brand name (US Air to US Airways) attributes
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Communicate Conflicting Benefits Positioning as Storytelling
• Approach to communicating: • Positioning is like crafting a narrative story

1. Develop a product that performs well on both about your brand
dimensions
– Tell your brand‘s unique story in a way that
2. Launch 2 different MKT campaigns, each resonates with your target audience
devoted to a different brand benefits
– Your story should highlight what makes your
3. Convince consumers that the negative brand different and why it matters to
relationship between benefits, if they consider it consumers
differently, is in fact positive (Apple: ―powerful
and user friendly‖
Positioning According to Al Ries Positioning According to Michael

& Jack Trout Treacy & Fred Wiersema
Value disciplines
A competitor has four strategic alternatives
regarding positioning: 1. Product leader
1. Strengthen own current position 2. Operationally excellent firm
2. Grab an unoccupied position 3. Customer intimate firm
3. De-position or re-position ―The ultimate sitting machine vs.
the ultimate driving machine.‖ Four rules for success
4. Exclusive-club strategy 1. Become best at one of the 3 value disciplines.
―It‘s one of the Big Three.‖
2. Achieve an adequate performance level in the other 2 disciplines.
3. Keep improving one‘s superior position in the chosen discipline.
4. Keep becoming more adequate in the other 2 disciplines.
Any Question?
Copyright © 2023 Pearson Education, Inc. Publishing as Prentice Hall 7-35

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12/7/2023

1 1. Explain how a company should develop a

Value Proposition 3. Discuss how a company identifies points

Develop a Value Proposition and

Develop a Value Proposition

Communicate the Offering‘s Positioning

Conduct a Customer Value Analysis Develop a Positioning Strategy

• Positioning the act of designing a

Develop a Positioning Strategy Develop a Positioning Strategy

• Include both rational & emotional

Choose a Frame of Reference Identify Competitors

• A frame of reference defines: • Determine CM: Gatorade vs. Pepsi

Analyze Competitors Table 10.2 Customer Ratings of Competitors

• Make SWOT analysis

Identify Potential PODs Identify Potential PODs

Identify Potential POPs POD vs. POP Example

• POPs are the attributes (benefits) that

Aligning Multiple FOR, POPs, & PODs Straddle (Dual) Positioning

Straddle (Dual) Positioning: Example Create a Sustainable CA

• To build a strong brand & avoid the

The Concept of Sustainable CA Strategies for Creating a SAB

• A SCA is difficult to replicate and should be 1. Differentiate on an existing attribute

Communicate the Offering’s

• Positioning statement For busy

Craft a Positioning Statement Communicate Category Membership

• When a product is new, inform consumers

Communicate Category Membership Communicate Conflicting Benefits

Communicate Conflicting Benefits Positioning as Storytelling

• Approach to communicating: • Positioning is like crafting a narrative story

Positioning According to Al Ries Positioning According to Michael

Copyright © 2023 Pearson Education, Inc. Publishing as Prentice Hall 7-35

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