Crafting the Brand Crafting the Brand Positioning and Positioning and Dealing with Dealing with CompetitionCompetition

Key ConceptsKey Concepts

What is What is Positioning?Positioning?

The act of designing the company’s The act of designing the company’s offering and image to occupy a offering and image to occupy a distinctive place in the minds of the distinctive place in the minds of the target market.target market.

Result is the creation of a Result is the creation of a customer-customer-focused value proposition:focused value proposition:

A cogent reason why the target market A cogent reason why the target market should buy the product.should buy the product.

Competitive Frame Competitive Frame of Referenceof Reference

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

Need to understand consumer behavior and Need to understand consumer behavior and the consideration sets consumers use in the consideration sets consumers use in making brand choices.making brand choices.

Points-of-Parity Points-of-Parity and Points-of-and Points-of-

DifferenceDifferencePoints-of-difference Points-of-difference

(PODs)(PODs)

Attributes or Attributes or benefits that benefits that consumers strongly consumers strongly associate with a associate with a brand, positively brand, positively evaluate, and evaluate, and believe they believe they couldn’t find to couldn’t find to the same extent the same extent with a competitive with a competitive brand.brand.

Points-of-parity Points-of-parity (POPs)(POPs)

Associations that Associations that aren’t necessarily aren’t necessarily unique to the unique to the brand but may in brand but may in fact be shared fact be shared with other brands.with other brands.

Category points-of-Category points-of-parityparityCompetitive points-Competitive points-of-parityof-parity

Establishing Establishing Category Category MembershipMembership

Announcing category benefitsAnnouncing category benefits

Comparing to exemplarsComparing to exemplars

Relying on the product descriptorRelying on the product descriptor

Key Criteria for Key Criteria for Points-of-Points-of-DifferenceDifference

Desirability Desirability CriteriaCriteria

RelevanceRelevance

DistinctivenessDistinctiveness

BelievabilityBelievability

Deliverability Deliverability CriteriaCriteria

FeasibilityFeasibility

CommunicabilityCommunicability

SustainabilitySustainability

Differentiation Differentiation StrategiesStrategies

Competitive advantage—a company’s ability Competitive advantage—a company’s ability to perform in one or more ways that to perform in one or more ways that competitors can’t or won’t match.competitors can’t or won’t match.

Few are sustainable, but a Few are sustainable, but a leverageable leverageable advantageadvantage can be used as a springboard to can be used as a springboard to new advantages.new advantages.Focus on building competitive advantages as Focus on building competitive advantages as customer advantagescustomer advantages..

Product Product DifferentiationDifferentiationFormForm

FeaturesFeatures

CustomizationCustomization

Performance Performance qualityquality

Conformance Conformance qualityquality

DurabilityDurability

ReliabilityReliability

RepairabilityRepairability

StyleStyle

DesignDesign

Service Service DifferentiationDifferentiationOrdering easeOrdering ease

DeliveryDelivery

InstallationInstallation

Customer trainingCustomer training

Customer consultingCustomer consulting

Maintenance and repairMaintenance and repair

ReturnsReturns

Other Dimensions Other Dimensions of of

DifferentiationDifferentiationPersonnelPersonnel

ChannelChannel

ImageImage

Five Forces that Five Forces that Determine Marketing Determine Marketing

AttractivenessAttractiveness

Industry competitorsIndustry competitors

Potential entrantsPotential entrants

SubstitutesSubstitutes

BuyersBuyers

SuppliersSuppliers

Threats Posed By Threats Posed By These ForcesThese Forces

Threat of intense segment rivalry.Threat of intense segment rivalry.

Threat of new entrants.Threat of new entrants.

Threat of substitute products.Threat of substitute products.

Threat of buyers’ growing bargaining Threat of buyers’ growing bargaining power.power.

Threat of suppliers’ growing bargaining Threat of suppliers’ growing bargaining power.power.

Industry and Industry and Market Views of Market Views of CompetitionCompetition

Industry—a group of firms that offers a product Industry—a group of firms that offers a product or class of products that are close substitutes or class of products that are close substitutes for each other.for each other.

Classified by:Classified by:Number of sellersNumber of sellersDegree of product differentiationDegree of product differentiationPresence or absence of entry, mobility, and exit Presence or absence of entry, mobility, and exit barriersbarriersCost structureCost structureDegree of vertical integrationDegree of vertical integrationDegree of globalizationDegree of globalization

Analyzing Analyzing CompetitorsCompetitors

StrategiesStrategies

ObjectivesObjectives

StrengthsStrengths

WeaknessesWeaknesses

Competitor Competitor Strengths and Strengths and WeaknessesWeaknesses

Share of marketShare of market

Share of mindShare of mind

Share of heartShare of heart

Selecting Selecting CompetitorsCompetitors

Strong vs. weakStrong vs. weak—most companies aim at weak —most companies aim at weak competitors.competitors.

Close vs. distantClose vs. distant—most companies compete —most companies compete with the rivals that resemble them the most.with the rivals that resemble them the most.

““Good” vs. “bad”Good” vs. “bad”—good competitors play by —good competitors play by industry rules, make realistic assumptions, industry rules, make realistic assumptions, set reasonable prices, and favor a healthy set reasonable prices, and favor a healthy industry.industry.

Competitive Competitive StrategiesStrategies

LeaderLeader

ChallengerChallenger

FollowerFollower

NicherNicher

If you are a Market If you are a Market Leader, you will Leader, you will

want towant toExpand the total marketExpand the total market

Defend market shareDefend market share

Expand market shareExpand market share

If you are a Market If you are a Market Leader, how to expand Leader, how to expand

total market?total market?

Market-penetration strategyMarket-penetration strategy

New-market segment strategyNew-market segment strategy

Geographical-expansion strategyGeographical-expansion strategy

If you are a Market If you are a Market Leader, how to defend Leader, how to defend

your market shareyour market share

• Position defensePosition defense

• Flank defenseFlank defense

• Preemptive defensePreemptive defense

• Counteroffensive defenseCounteroffensive defense

• Mobile defenseMobile defense

• Contraction defenseContraction defense

If you are a Market If you are a Market Leader, how to expand Leader, how to expand your market shareyour market share

• Factors to consider before pursuing:Factors to consider before pursuing:

– The possibility of provoking antitrust The possibility of provoking antitrust actionaction

– Economic costEconomic cost– Pursuing the wrong marketing activitiesPursuing the wrong marketing activities– The effect of increased market share on The effect of increased market share on

actual and perceived qualityactual and perceived quality

Other Competitive Other Competitive StrategiesStrategies

• Market-challenger strategiesMarket-challenger strategies

• Market-follower strategiesMarket-follower strategies

• Market-nicher strategiesMarket-nicher strategies

Market-Market-Challenger’s Challenger’s StrategiesStrategies

• Define the strategic objective and Define the strategic objective and opponents.opponents.

• Decide who to attack:Decide who to attack:– Market leaderMarket leader– Market equals that are underperformingMarket equals that are underperforming– Small local and regional firmsSmall local and regional firms

Market Market Challenger’s Challenger’s

Attack StrategiesAttack Strategies• Frontal attackFrontal attack

• Flank attackFlank attack

• Encirclement attackEncirclement attack

• Bypass attackBypass attack

• Guerilla warfareGuerilla warfare

Market-Follower’s Market-Follower’s StrategiesStrategies

• CounterfeiterCounterfeiter

• Cloner Cloner

• Imitator Imitator

• AdapterAdapter

Specialized Niche Specialized Niche Roles Roles

• End-user End-user

• Vertical-levelVertical-level

• Customer-sizeCustomer-size

• Specific-customerSpecific-customer

• GeographicalGeographical

• Product or product-Product or product-lineline

• Product-featureProduct-feature

• Job-shopJob-shop

• Quality-priceQuality-price

• ServiceService

• ChannelChannel

Balancing Customer Balancing Customer and Competitor and Competitor OrientationsOrientations

Competitor-centered Competitor-centered companycompany

• Looks at what Looks at what competitors are competitors are doing and then doing and then formulates formulates competitive competitive reactions.reactions.

Customer-centered Customer-centered companycompany

• Focuses more on Focuses more on customer customer developments in developments in formulating its formulating its strategies.strategies.