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Objectives of the Session To understand: 1. positioning and why it is important 2. the differences between physical and perceptual product positioning 3. the steps involved in the positioning process 4. market positioning strategies
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What do we mean by positioning? • Creating distinct and valued physical and perceptual differences between one’s product and its competitors, as perceived by the target customer. • Positioning (or repositioning) refers to both the place a product or brand occupies in customers’ minds relative to their needs and competing products or brands and to the marketer’s decision making intended to create such a position. • Positioning notion comprises both competitive and customer need considerations.
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Positioning Positioning is the choice of: • Where we want to compete (Target Market) • How we wish to compete (Differential Advantage) Objective of Positioning: • To create & maintain a distinctive place in the market for a company & its products.
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Generic competitive Strategies • Differentiation lies at the heart of marketing (i.e. products that are superior on some important dimensions) represent distinctly different ways in which companies can compete for the minds and wallets of customers in their target markets.
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Dimensions on which Consumers Perceive Competitive Offerings • Simple physically based attributes e.g. price/quality/size/power • Complex physically based attributes (subjective) • Essentially abstract attributes e.g. mystery of a perfume or prestige of a car
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Comparisons of Physical and Perceptual Positioning Analysis Perceptual positioning Physical positioning Another way is to assess the percieved benefits One way to assess the current position of a of the product what it does than what it is. product offering relative to competitors is on Here evaluation of many products is the basis of how the various offerings compare subjective because it is influenced by factors on some set of objective physical characteristics other than physical properties, including the (ex: package, brand name, price, and ancillary way products are presented, our services) past experiences , opinions of others. • Consumer orientation • Technical orientation • Perceptual attributes • Physical characteristics • Perceptual measures • Objective measures • Need for marketing research • Data readily available • Perceptual brand positions and • Physical brand properties positioning intensities • Large number of dimensions • Limited number of dimensions • Represents impact of product specs and • Represents impact of product specs price and communication • Direct R&D implications • R&D implications need to be interpreted
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Positioning Process 1. Identify relevant set of competitive products. 2. Identify set of determinant attributes that define ‘product space’ in which positions of current offering are located. 3. Collect information from a sample of customers about perceptions of each product on determinant attributes. 4. Analyse intensity of a products’ current position in customers’ minds. 5. Determine products’ current location in product space (product positioning). 6. Determine customers’ most preferred combination of determinant attributes. 7. Examine fit between preferences of market segmentations and current position of product (market positioning). 8. Select positioning or repositioning strategy.
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The Positioning Statement A Positioning Statement for Volvo in North America • For upscale American families, Volvo is the family automobile that offers maximum safety • Generic format for positioning statements: For (target market), (brand) is the (product category) that (benefit offered).
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Perceptual Map • A useful tool for doing so is the positioning grid, also called a perceptual map. The positioning grid provides a visual representation of the positions of various products or brand in the competitive set in terms of (typically) two determinant attributes. • Where more than two attributes are to be considered in a positioning analysis, multidimensional grids, or multiple grids, are produced.
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Value Proposition • A value proposition is similarly explicit about what the product does for the customer (and sometimes, what it does not do) and typically also includes information about pricing relative to competitors. • It is important that the positioning statement or value proposition states benefits that the user of the product will obtain, rather than features or attributes of the product itself, • Both positioning statements and value propositions should reflect a unique selling proposition that the product embodies. • In this sense, they reflect the basis on which the marketer intends to win sustainable competitive advantage by differentiating the product from others in its competitive space. In its shortest form, a value proposition typically include: • Target market •Benefits offered (and not offered) • Price range (relative to competitors)
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..or a Value Proposition Value Proposition for Volvo in North America • Target market: Upscale American families • Benefits offered: Safety • Relative price: 20% premium to domestic family cars • Generic format for value propositions: • Target market • Benefits offered (and sometimes not offered) • Relative price
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Some Key Questions Concerning Positioning Decisions • For whom are they written? • In what sort of language? • Should they focus on features or benefits? • How many differentiating attributes should anchor them?
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