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Crafting the brand positioning

Positioning: designing the company’s offering and image in order to occupy a distinctive
place in the minds of the target market.

Category membership: the products or sets of products with which a brand competes and
which function as close substitutes.

Points-of-difference (POD’s): attributes or benefits can help consumers strongly associate

with a brand, especially when they believe they cannot find this in a competitive brand.

Points-of-parity (POP’s): attributes shared with other brands.

Category point-of-parity associations are associations consumers view as being necessary to

a credible product offering within a certain category. Competitive point-of-parity associations
are those associations designed to negate competitors points-of-difference.

Dimensions through which a company can differentiate its market offering to gain a strong
competitive advantage:

Service Differentiation – Service differentiators: ordering ease, delivery, installation,

customer training, customer consulting, maintenance and repair, and miscellaneous services
(e.g. product warranty/maintenance contract).

Product Differentiation – Products can be differentiated in many ways: Form, Features,

Conformance quality (degree to which all the produced units are identical and meet the
promised specifications), Performance quality, Reliability, Durability, Reparability, Style,
Design.

Channel Differentiation – Refers differentiating in ways of design of distribution channels’

coverage, expertise, and performance.

Personnel Differentiation – Gaining a competitive advantage through better-trained people;

whose characteristics are: competence, reliability, courtesy, responsiveness, credibility, and
communication.

Image Differentiation

Image – the way the public perceives the company or its products.

Identity – comprises the way that a company aims to identify or position itself or its product.

Image and identity can be differentiated through using symbols, colours, slogans, generate
image through their physical plant space, special attributes, engaging in events and
sponsorships, and using multiple image-building techniques.
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Product Life-Cycle Marketing Strategies

Because the product, market, and competitors change over time, firm’s positioning and
differentiation strategy should change as well.

Stages of the Product life cycle: introduction, growth, maturity, decline > bell shaped.

Other products, those without bell shaped PLC, exhibit alternative patterns:

growth-slump-maturity pattern – e.g. Kitchen knives, purchased a lot until reaching a

petrified level, later sustained by late adopters.

Cycle-Recycle pattern – e.g. drugs temporarily promoted that remain on the market.

Style – a basic and distinctive mode of expression appearing in a field of human endeavour.

Scalloped Patter – e.g. Velcro

Fads – temporary fashions, that come on strong, then decline quickly.

Fashion – a currently accepted or popular style in a given field.

Introduction Stage

 Tendencies: Costs: high; Prices high, highest promotional expenditures, focus on high-
earners.
 The time of entering a market is important: too early is risky but can be highly
rewarding. Most studies indicate that the market pioneer gains the most advantage.

Pioneer advantage (Golder and Tellis): inventor (first in developing the patents), product
pioneer (being first to develop the product), market pioneer (selling first in new product
category).

Growth Stage

Tendencies: prices: remain unchanged or slightly fall, sales rise faster than
promotional expenditures, profits increase, costs fall faster than price declines.

 By spending money on product promotion, improvement, and distribution, the firm can
capture a dominant position.
 To strengthen competitive position the firm should engage in market expansion
strategies:

- lower prices, attract next layer of price sensitive buyers.

- enter new market segments

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- add new models and flanker products

- improve product quality and add new product features and improved styling.

- increase distribution coverage, enter new distribution channels

- shifts from product awareness advertising to product-preference adv.

Maturity Stage

 Stages of the Maturity stage– Tendencies: Growth – Declining sales growth, no new
distribution channels. Stable – Sales flatten (market saturation).
Decaying maturity – Absolute level of sales starts to decline, customers switch
 Intensified competition leads to companies that are:
 niching: reactions: advertising, promotion, increase R&D budgets.

- or market leaders: low cost, high volume

Market modification – and attempt to expand the market for its mature brand using:

Volume = Number of Brand Users X Usage rate per user

To expand number of brand users:

 Enter new market segments

 Convert non users
 Win competitors’ customers
 To increase volume (usage rate):
 Use more of the product on each occasion.
 Use the product in new ways.
 Use the product on more occasions.

Product modification – Attempting to stimulate sales by modifying the product’s

characteristics through feature improvement, style improvement (e.g. new car models), or
quality improvement.

Marketing-mix modification – Attempting to stimulate sales by modifying other marketing mix

elements: distribution, prices, sales promotion, advertising, personal selling, services.

Decline Stage

A firms’ task is to identify the truly weak products; to develop a strategy for each one; and
finally to phase out weak products in a way that minimizes the hardship to company profits,
employees, and customers.
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Harvesting – calls for gradually decreasing a product or business’s costs while trying to
maintain its sales. This is done by cutting R&D costs and plant and equipment investment,
and reducing product quality, sales force size, marginal services, and advertising
expenditures.

Divesting – deciding to stop producing a product. Possibilities include selling the product,
liquidating slowly or quickly.

Market Evolution

In order to have a more market-oriented picture, one should follow the evolution of the market
to focus also on what is happening to the overall market.

When making decisions, strategies considered include single-niche strategy, multiple-niche

strategy, or a mass-market strategy.

i. Emergence

 Diffused Preference market – Buyer preferences scatter evenly.

 Emergence begins when launching the product after the strategy is chosen for
designing an optimal product for the market.

ii. Growth

 Growth stage happens when second firms start to enter the market.

iii. Maturity

 The maturity stage is entered when competitors cover and serve all the major market
segments.
 Market fragmentation - when the market splits into multiple finer segments as market
growth slows down.
 Market consolidation – Caused by the emergence of a new attribute that has a strong
appeal.

iv. Decline – Demand for the product begins to decrease.

Four ways of dealing with attribute anticipation and discovering: Attribute Competition

1. Customer-survey process: Discover customers’ desired benefits, and costs of

developing each new attribute.
2. An intuitive process: goes without using much marketing research.
3. A dialectical process: unidirectional movement
4. A needs-hierarchy process – Maslows Theory (see chapter 7).
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1.What is a brand and how does branding work?

Brand is name, term, sign, symbol, or design, or a combination of them, intended to identify
the goods or services of one seller or group of sellers and to differentiate them from those of
competitors.
The purpose of branding is to create demand for the product that a particular firm is offering
or marketing or selling. A satisfied buyer can repurchase the same product only when it is
identified uniquely and branding provides the means through firms provide unique
identification to their products targeted at various segments in the product or need market.
2. What is brand equity?
Brand equity brand value is associate with the customers. If more customers recognize the
brand and show preference for the brand, the brand has more value. Customer-based brand
equity is the differential effect brand has on consumer response to the marketing activities of
that brand. A brand has positive customer-based brand equity or value when consumers react
more favorably to a product's marketing activity conducted with the brand name in
comparison to marketing activity conducted without disclosing the brand name.
3. How is brand equity measured and managed?
BrandAsset Valuator
Brandz
Brand Resonance Model
Brand audit
Brand tracking studies
Brand reinforcement
Brand revitalization
4. What are the important brand architecture decisions involved in developing a branding
strategy?
Choosing Brand elements
Developing brand elements
Decisions to use either or combinations of - Corporate umbrella brand name - Separate
product family brand names - Target offer brand name.