ch-10-crafting the brand positioning
DESCRIPTION
Marketing ManagementTRANSCRIPT
Marketing Management
1
Marketing Management
Chapter-10
Crafting the Brand Positioning
Part : 04
Building StrongBrands
Marketing Management
2
MARKETING MANAGEMENT12th edition
10 Crafting the Brand
Positioning
Kotler Keller
Marketing Management
3
Chapter Questions
How can a firm choose and communicate an effective positioning in the market?
How are brands differentiated?
What marketing strategies are appropriate at each stage of the product life cycle?
What are the implications of market evolution for marketing strategies?
Marketing Management
4
Marketing Strategy
SegmentationSegmentation
TargetingTargeting
PositioningPositioning
Marketing Management
5
Positioning
All marketing strategy is built on STP (Segmentation, Targeting and Positioning). A company discovers different needs and groups in the marketplace, targets those needs and groups that it can satisfy in a superior way, and then positions its offering so that the target market recognizes the company’s distinctive offering and image.
Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market.
The goal is to locate the brand in the minds of consumers to maximize the potential benefit to the firm.
Marketing Management
6
Positioning
When positioning a product, the marketer wants to convey the benefit(s) most desired by the target market.
A classic example of successful positioning is the original Head & Shoulders shampoo. As the first shampoo positioned as a ‘dandruff’ remedy, the product’s name implied the benefit, the medicinal fragrance suggested its potency, and the colour (blue-green) and consistency (a paste rather than a liquid) indicated that it was not an ordinary shampoo.
Marketing Management
7
Positioning
Head & Shoulders An example of successful Positioning
Marketing Management
8
Positioning Strategy
There are three steps in a Positioning Strategy.
1. Select the Positioning Concept
2. Design the dimension/feature that most effectively conveys the position.
3. Coordinate the marketing mix components to convey a consistent position.
Marketing Management
9
Positioning StrategyStep-01
1. Select the Positioning Concept : To position a product/service, a marketer needs to first determine what is important to the target market.
Marketer can then conduct positioning studies to see how members of a target market view competing products on the important dimensions.
The results of this research can be portrayed in a ‘Positioning Map’ or ‘Perceptual Map’. (See Next Slide)
Marketing Management
10
Positioning StrategyPositioning/Perceptual Map for Tea
* Luzianne
* Lipton * Tapal * Tetley
* Nestea* Lipton Flavored Teas
TraditionalFlavor
UniqueFlavor
Iced Hot
Marketing Management
11
Positioning StrategyStep-02
2. Design the dimension/feature that most effectively conveys the position : A position can be communicated with a brand name, a slogan, the appearance or other features of the product, the place it is sold, the appearance of employees, and in many other ways.
Marketing Management
12
Positioning StrategyStep-03
3. Coordinate the marketing mix components to convey a consistent position : Even though one or two dimensions may be the primary position communicators, all the elements of the marketing mix –product, price, place and promotion-should complement the intended position.
Marketing Management
13
Repositioning
Many product failures are the result of inconsistent positioning that confuses consumers. For example, Tetley instant Iced Tea in Britain flopped because the British take pride in brewing tea.
Over time a position may erode because of lack of attention, become less attractive to the market as needs or testes change, or be usurped by a competitor; hence the positioned must be regularly monitored and sometimes adjusted.
The change in position of a product is called “Repositioning”.
Marketing Management
14
Product Life-Cycle (PLC) PLC is a graphic representation of a product’s sales history
over time. A company’s positioning and differentiation strategy must change as the product, market, and competitors change over the Product Life Cycle (PLC).
To say that a product has a life-cycle is to assert four things.
a. Products have a limited life. b. Product sales pass through distinct stages.c. Profits rise and fall at different stages of the product life
cycle.d. Products require different marketing, financial,
manufacturing, purchasing, and human resource strategies in each life cycle stage.
Marketing Management
15
Product Life Cycles (PLC) Patterns Most PLC curves are bell-shaped. This curve is
typically divided into 4 stages.
a. Introductionb. Growthc. Maturityd. Decline
Three common alternate patterns are
Growth-Slump-Maturity Pattern (e.g. with home appliances)
The Cycle-Recycle Pattern (e.g. with new drugs) Scalloped Pattern (e.g. with nylon when new uses are
discovered)
Marketing Management
16
Product Life CycleBell-Shaped Pattern
Time
Sales
Marketing Management
17
Product Life CycleGrowth-Slump-Maturity Pattern
Time
Sales
Marketing Management
18
Product Life CycleCycle-Recycle Pattern
Time
Sales
Marketing Management
19
Product Life CycleScalloped Pattern
Time
Sales
Marketing Management
20
Style, Fashion, and Fad Life Cycles
Marketing Management
21
Marketing Strategies a. Introductory Stage
Sales growth tends to be slow at this stage.
Profits are negative or low in the introduction stage.
Promotional expenditures are at their highest ratio to sales. Product-Awareness Advertising is done.
Companies that plan to introduce a new product must decide when to enter the market . To be first can be rewarding, but risky and expensive.
Speeding up innovation time is essential in an age of shortening product life cycles.
Most studies indicate that the market pioneer gains the most advantage.
Marketing Management
22
Marketing Strategiesb. Growth Stage
The growth stage is marked by a rapid climb in sales.
Early adopters like the product, and additional consumers start buying it.
New competitors enter, attracted by the opportunities.
Sales rise much faster than promotional expenditures, causing a welcome decline in the promotion-sales ratio.
Profits increase at this stage due to falling promotional and manufacturing costs.
Marketing Management
23
Marketing Strategiesb. Growth Stage
During growth stage, the firm uses several strategies to sustain rapid market growth.
To sustain rapid market growth, firm improves product quality and adds new product features and improved styling.
It adds new models and flanker products.
It enters new market segments.
It increases distribution coverage.
It lowers price to attract next layer of price-sensitive buyers.
Marketing Management
24
Marketing Strategiesc. Maturity Stage
At some point, the rate of sales growth will slow, and the product will enter a stage of relative maturity.
This stage normally lasts longer than the previous stages and poses big challenges to marketing management.
Maturity stages divides into three phases (growth, stable and decaying maturity).
The sales slowdown creates overcapacity in the industry, which leads to intensified competition.
They increase R&D budgets to develop product improvements and line extensions.
Some companies abandon weaker products and concentrate on more profitable products and on new products.
Marketing Management
25
Marketing Strategiesc. Maturity Stage
During maturity stage, the firm can use several strategies to expand the market of its mature brand.
Market Modification (sales volume = no. of users x usage rate per user, entering new market segments, winning competitor’s customers)
Product Modification (Quality Improvements, Feature Improvements)
Marketing Program Modification (Like decisions on Price, Sales Promotion, Personal Selling, Advertising etc.)
Marketing Management
26
Marketing Strategiesd. Declining Stage
Sales decline for a number of reasons including technological advances, shifts in consumer tastes and increased domestic and foreign competition.
As sales and profits decline, some firms withdraw from the market. Those remaining may reduce the number of products they offer.
Unless strong reasons for retention exist, carrying a weak product is very costly to the firm.
Some firms abandon declining markets earlier than others; which depends upon the presence and height of exit barriers in the industry.
Marketing Management
27
Marketing Strategiesd. Declining Stage
The decline might be slow as in the case of sewing machines; or rapid as in the case of 5.25 floppy disks.
Sales may plunge to zero, or they may petrify at a low level.
Marketing Management
28
Marketing Strategiesd. Declining Stage
According to a study of company strategies in declining industries, the following strategies are available to the firm.
Increasing the firm’s investment. Maintaining the firm’s investment level until the
uncertainties are resolved. Decreasing the investment selectively. Divesting the business quickly by disposing of its
assets advantageously.
Marketing Management
29
The PLC ConceptCritique
The PLC concept helps marketers interpret product and market dynamics; it can be used for planning and control, and as forecasting toll; however PLC theory has its share of critics. They claim
i. Life-Cycle Patterns are too variable in shape and duration.
ii. Marketers can seldom tell what stage the product is in.
iii. PLC Pattern is the result of marketing strategies rather than an inevitable course that sales must follow.
Summary of PLC Characteristics, Objectives and Strategies (See Table 10.3)
Marketing Management
30
Market Evolution Stages
Emergence Growth
Maturity Decline
Marketing Management
31
Market EvolutionStages
The PLC yields only a product-oriented picture rather than a market-oriented picture.
Like products, markets evolve through four stages.
a. Emergenceb. Growth (If the new product sells well, new firms will enter
the market leading to market-growth stage)c. Maturity (Eventually, the competitors cover and serve all
the major market segments and the market enters the maturity stage. In fact, they go further and invade each others’ segments reducing everyone’s profit in the process. As market growth slows sown, the market splits into finer segments an high Market Fragmentation occurs. The market fragmentation is often followed by a Market Consolidation caused by the emergence of a new attribute that has strong appeal) (The fragmentation is brought by competition, while consolidation is brought by innovation)
d. Decline
Marketing Management
32
Market Evolution Maturity Strategies
Marketing Management
33
Additional Resource For “Positioning Strategy”, please
refer “Marketing”, 12th Edition, By Michael EtzelBruce WalkerWilliam Stanton
Marketing Management
34
Activity
New Slogan/Logo of Walmart.