MM C10

Segmentation and targeting were discussed in chapter 8. Companies seek to discover different needs and groups in the market (Segmentation), target those they can satisfy better than competitors, and then position their offerings so the target market is aware of the distinctive differences.

The goal of positioning is to locate the brand in the minds of consumers to maximize the potential benefit to the firm. A good brand positioning helps guide marketing strategy by clarifying the brand’s essence, identifying the goals it helps the consumer achieve, and showing how it does so in a unique way. 

To create a well-differentiated brand position marketers must have a keen understanding of customer wants and needs, company capabilities, and competitive actions.

A customer-focused value proposition gives customers a persuasive reason to buy your product.

Table 10.1 – Examples of value propositions. These propositions have been developed over the years based on their target customers, benefits, and prices.

Positioning requires that marketers define and communicate similarities and differences between their brand and its competitors:

1.Determine a frame of reference by identifying the target market and relevant competition

2.Identify the optimal points of parity and points of difference brand associations given that frame of reference

3.Create a brand mantra to summarize the positioning and essence of the brand

A frame of reference begins by determining the category to which the product belongs, which includes all products that a brand competes with, or can serve as a substitute. Competitors can then be analyzed and more narrowly defined. For example, even though a new brand in the premium bottled water space is in the same category as Coke’s Dasani, it must focus more on other premium priced brands such as Fiji.

POP: attribute or benefit associations that are not necessarily unique to the brand but may in fact be shared with other brands. These include category POP that are essential to a legitimate and credible offering within a certain product or service category and competitive POP that are associations designed to overcome perceived weaknesses of the brand.

POD: attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand.  These attribute or benefit should be sufficiently desirable, deliverable, and differentiating.

Often, the key to positioning is not so much achieving a POD as achieving POD. The brand does not literally need to be seen as equal to competitors, but consumers must feel it does well enough on that particular attribute or benefit.  A light beer presumably would never taste as good as a full-strength beer, but it would need to taste close enough to be able to effectively compete.

Marketers typically focus on brand benefits in choosing PODs and POPs.  Attributes typically serve a supporting role so the brand can credibly claim the benefits it offers. In selecting brand benefits to focus on, marketers use perceptual maps shown in Exhibit 10.1 (a) and (b).

This hypothetical perceptual map for a beverage category shows how consumer view the brands (A, B, C, and D) on a taste profile (light versus strong) and personality and imagery (contemporary versus modern). The ideal points for three market segments (1, 2, and 3) are also shown. Ideal points represent each segment’s most preferred (“ideal”) combination of taste and imagery.

Brand A is viewed as balanced between taste and imagery. However, this does not appeal to any specific market segment.

Exhibit 10.1 (b) outlines the strategic options that Brand A may take. It could alter it’s image to be more contemporary, (move closer to Segment 1) or it could change its taste profile to make it lighter, thus appealing more to Segment 2.

A brand mantra is the articulation of the heard and soul of the brand. They are short, three- to five-word phrases that capture the essence or spirit of the brand positioning. Brand mantras can provide guidance about what products to introduce under a brand, what ad campaigns to use, where, and how to sell the brand.

Three key criteria for establishing a brand mantra are:

1.Communicate – It should define the category of business for the brand and set the boundaries. Should state what is unique about the brand.

2.Simplify – It should be memorable; short, crisp, and vivid in meaning.

3.Inspire – It should be personally meaningful and relevant to as many employees as possible.

Establishing the brand positioning in the marketplace requires that consumers understand in which category or categories the brand competes and its POP and POD with respect to those competitors.

“Marketing Memo: Constructing a Brand Positioning Bull’s-eye” outlines a helpful schematic way marketers can formally express brand positioning.

A competitive advantage is a company’s ability to perform in one or more ways that competitors cannot or will not match.

While strategist, such as Michael Porter, urge companies to build sustainable competitive advantages, few CA’s are sustainable. But they can be Leverageable, which mean the advantage can be used as a source of new advantages.

For a brand to be effectively positioned, customers must see any competitive advantage as a customer advantage. Meaning that the product has an advantage over competitive products.

Employee differentiation: train employees to provide superior customer service. Singapore Airlines is well regarded in large part because of its flight attendants.

Channel differentiation: design distribution channels’ coverage, expertise, and performance to make buying the product easier and more enjoyable and rewarding. Dayton, Ohio–based Iams  found success selling premium pet food through regional veterinarians, breeders, and pet stores.

Image differentiation: craft powerful, compelling images that appeal to consumers’ social and psychological needs. E.g., Marlboro’s

Services differentiation: design a better and faster delivery system that provides more effective and efficient solutions to consumers.

A good positioning should contain POD and POP that appeal both to the head and to the heart. Brands that are lovemarks command both respect and love and result from a brand’s ability to achieve mystery, sensuality, nd intimacy:

Firm should monitor three variables when analyzing potential threats posed by competitors:

Share of market—The competitor’s share of the target market.

Share of mind—The percentage of customers who named the competitor in responding to the statement,“Name the first company that comes to mind in this industry.”

Share of heart—The percentage of customers who named the competitor in responding to the statement,“Name the company from which you would prefer to buy the product.”

Table 10.3 show the relationship between share of - market, - mind, and - heart. Although Competitor A is the market share leader in 2011, it is slipping. The firms mind and heart share are also slipping, while Competitor B is gaining ground in each category.

Position a brand as telling a narrative or story based on deep metaphors that connect to people’s memories, associations, and stories.

Communicate different messages to different market segments, as long as they at least broadly fit within the basic broad image of the brand.

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