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Synopsis
In todays globalizing and continuously developing economies, the competition among enterprises grows quickly, the market share gets narrower; and in order to gain new markets, companies are trying to create superiority over their rivals by positioning new products aimed at consumer behaviors and perceptions. In this sense, product positioning strategy in marketing management has emerged and now companies conduct studies on this strategy. In this research, product positioning strategy is emphasized and related examples are given on the basis of Safe Software and Integrated Solutions Pvt Ltd, Palakkad, Kerala. Opens by exploring the changing relationship between customer value and how it has been traditionally interpreted within the organisation. Business leaders today acknowledge that the traditional 4Ps approach to brand marketing needs to be transformed in order to realise a broader vision of customer value across the organisation. Argues that it is the business leader who should be leading this transformation, as manager of the organisations brand and its values, as well as challenging the marketing department to redefine its role as brand custodians. Outlines a framework which enables senior management to develop superior customer value through branding and positioning their organisation and to deliver this value through its business processes. Uses practical examples to illustrate the use of this framework and concludes by considering whether or not the traditional marketing department is acting as a barrier when it comes to positioning and branding their organisation.
In India, "Xerox" is what comes to mind when people think of "photo-copying". "Colgate" comes to the mind of people when they think toothpaste. However, now with intensive competition things are changing. Positioning a product in the minds of the consumer is becoming harder. However, positioning is going to play a very important role in marketing in an overly competitive environment. Product positioning is closely related to market segment focus. Product positioning involves creating a unique, consistent, and recognized customer perception about a firms offering and image. A product or service may be positioned on the basis of an attitude or benefit, use or application, user, class, price, or level of quality. It targets a product for specific market segments and product needs at specific prices. The same product can be positioned in many different ways. The figure below is taken from Philip Kotlers book, Marketing Management published by Prentice Hall. This two-dimensional perception map shows how Kotler analyses the positioning of an instant breakfast drink relative to variables of the price of the product and the speed of preparation. Another common framework for product positioning is taken from a series of questions. You can position a product using a positioning statement that answers these important questions:
For whom is the product designed? What kind of product is it? What is the single most important benefit it offers? Who is its most important competitor? How is your product different from that competitor? What is the significant customer benefit of that difference?
Positioning sins by Microsoft During the Vista rollout, Microsoft committed several positioning sins. Redmond's mistakes begin with the deadly transgression of creating a positioning conflict within its own product lines. It's a surprising mistake. During the history of the Windows 9.X vs. NT product lines, Microsoft was frequently tormented by customers confused by which product to buy, a mistake highlighted by the firm's creation of one of high-tech's dumbest ads, the two nags racing piece which you can see preserved on www.insearchofstupidity.com in the Museum of Stupid HighTech Marketing. While 9.X and NT both existed, Microsoft frequently had to explain why a customer should buy one product over the other when both were called Windows, looked very much the same, did very much the same thing, and cost pretty much the same. But Microsoft was lucky in that during this period its chief jousting opponent was IBM and OS/2. But with Vista Microsoft pointed the lance at its own foot, kicked its marketing war horse into action, and firmly pinned its toes to the ground. There are no less than six (actually seven, counting the OEM version. Wait, isn't that eight if you count academic packages? Are we missing some other variants? Probably. Does Windows CE count?) versions of Vista currently available for sale:
Vista Starter (which you can't buy unless you live in the Third World, apparently.) Vista Home Basic (which, amazingly, does not include the new UI.) Vista Home Premium Vista Business Vista Enterprise Vista Ultimate
This plethora of choices leads customers to naturally ask a deadly question: Which one do I buy? Before, a consumer only had to compare between Windows XP Home and Professional (Windows Media Edition came along too late in the life cycle of the product to become wellknown enough to confuse anyone).
Functional positions o Solve problems. o Provide benefits to customers. o Get favorable perception by customers and lenders. Symbolic positions o Self-image enhancement. o Ego identification. o Belongingness and social meaningfulness. o Affective fulfillment. Experiential positions o Provide sensory stimulation. o Provide cognitive stimulation.
APPROACHES OF POSITIONING :-
The main positioning strategy is to either developing or reinforcing a particular image for the brand in the mind of the customer. The main approaches to positioning strategy are:
Customer benefits approach. The price-quality approach. The use or application approach. The product user approach. The product class approach. The cultural symbol approach. The competitor approach.
1. Customer benefit approach: This is an important positioning strategy. It involves putting the brand above competitors, based on specific brand attributes and customer benefit. In the automobiles sector we can see many car manufacturer give emphasis on different technical aspects such as fuel efficiency, safety, engine performance, power windows etc. Generally marketers identify positioning in respect of product characteristics that have been ignored by the competitor. Often we can see that firms attempts to position their brands along with two or more characteristic simultaneously, this is done to give an extra edge to the product from its rival and also helps increase the products life cycle. Thus a single product can solve many problem is the main theme behind the product. Example:
Procter & Gambles Head & shoulder shampoo functions as anti dandruff and anti hairfall shampoo.
Head & Shoulder positioned as both anti-dandruff & anti-hairfall shampoo 2. Price quality approach: Sometimes brands attempts to offer more in term of service, feature, quality, or performance. Manufacturer of such brands charge higher prices partly to cover the cost and partly to communicate the fact that they are of high quality. In fact in the same product category there are brands, through comparable in qualities, which appeal on the basis of price. For example brands like Rado and Timex use quality and price positioning technique respectively. Rado competes for quality and Timex competes for price. It is difficult to use both quality and price positioning together because there is a risk that high quality-low price positioning technique may infer the image of the product in the mind of the consumer.
Example of price quality approach 3. The use and application approach: - In this strategy the product is positioned with a use or application approach. For example: - Largest Mobile manufacturer in the world Nokia positioned its few variant of Nseries mobiles as music phones with enhanced memory and multimedia capabilities.
4. The product user approach:- In this approach, the brand identifies and determines the target segement for which the product will be positioned. Many brand uses a model or a celebrity to position their product. The expectation are that a model or a celebrity is likely to influence the products image by reflecting their own image to it. For example:Dabur Chyvanprash is positioned for all age groups.
5. The product class approach:- This approach is use so that the brand is associated with a particular product category. This is generally used when a category is too crowded. For example:- HLL has positioned Dove toilet soap as a cleansing cream product for young womwn with dry skin and its is positioned as a premium segment toilet soap.
6. The cultural symbol approach:- The positioning strategy is based on deeply entrenched cultural symbol. The use of cultural symbol can help to differentiate the brand from competitors brands. For example:- The positioning technique of Marlboro cigarettes use the image of typical American cowboy .
Marlboro gives its cigarette brand a American cowboy image Example of cultural symbol approach 7. The competitor approach:- Many brands use competitor as a dominant plank in their campaign. These brands are positioned following its competitor. This is an offensive strategy.
DIFFERENT POSITIONING PLANKS / BASES:- Different types of positioning planks /bases are used by the marketers are:1. Economy:- Product positioned toward a particular segment keeping in mind it economy.Example-Maruti 800, Tata Nano, Nirma detergent powder etc are positioned for the economy segment 2. Benefit:- Product positioned with some beneficial features. Example-Colgate total, Clinic plus etc. 3. Gender:- Product positioned for a particular segment. ExampleScooty Pep, Titan Raga. 4. Luxury and exclusiveness:- Product or services positioned toward luxury segment. Example-Taj group of hotel, Mercedes Benz E-class etc.
Mercedes Car - symbol of luxury and exclusiveness 5. Fashion for elite class:- Product positioned for fashionable elite class or member of the society, who always want to stay ahead in term of fashion and demands exclusive products only. Example Peter England, Van Heusen, Raymond etc.
6. Technology and value added features:- Positioning of a product according to its technological advancement and value added features. Example:- Microsofts positioning of its recent operating system Windows Vista as the advanced operating system, Sony with various elecronic goods, LG etc
Positions are described by variables and within parameters that are important to the customers. Common examples are price, supporting services, quality, reliability, and value for money. Often, customers position a product in relation to a brand or product that is especially visible to them. This could be the market leader or any other offer with a high media exposure and an above average marketing budget. Therefore, it is advisable to use in-depth market research to determine relevant parameters in order to understand how customers rate different products and marketing variables. The number of relevant parameters is normally low. Most often, they can be described with a two- or three-dimensional matrix. This tool to visually depict customers perceptions of a product and its position is called perceptual mapping.
Normally, most suppliers in a market or in a market segment will be positioned along the diagonal. This diagonal is called the Value-Equivalence-Line (VEL), since value and price are balanced there.
In our example, product A is positioned unfavourably. It is too expensive for the mass market and its quality is not good enough for the premium segment. In general, there are the following strategies for repositioning; however, their feasibility will depend on the particular situation.
Change the relation of price and quality for the existing brand; e.g. product relaunch with improved characteristics Change the relation of price and quality by introducing a new brand; e.g. introduction of clone under a cheap brand or a retailers own brand Alter believes about the brand; e.g. image campaign, creation of a hype Alter believes about competitive brands; e.g. comparing advertisements Alter customers rankings of important factors; e.g. focus on additional features and characteristics (example: car manufacturers focus on very different product characteristics in their commercials, for instance security, fuel consumption, image, luxury interior, fun) Introduction of new or neglected attributes; e.g. product relaunch with new features that are new for the whole market segment.
When planning such activities it is critical to think about possible reactions of competitors. A shift of a product into a more favourable position in the price-quality-map above the diagonal (e.g. into position B) will normally lead to in shift of market shares in favour of this product. Competitors could react with a reduction of general price level, thus moving the VEL to the left. Product B would lose its superior position. Moreover, it is advisable to keep in mind that customer and their individual preferences of a price-quality-combination are not distributed equally along the VEL. Neglecting the distribution of customers could lead to the following problems:
Positioning in a segment with very few potential customers (e.g. positioning in a middlesegment in a market where customers prefer either the budget-product or the premium product) Positioning in a too low or too high price-value-combination (segments a and b in our example). This product does not appeal to a large proportion of the market, since customers either expect a higher quality (a) or are not willing to pay that high price.
Dibb et al recommend the following steps for determining and implementing the positioning of
a product. Although they focus on new product development, these steps are applicable to a relaunch with new features or for a repositioning of an existing product too.
1. Define the segments in a particular market. 2. Decide which segments to target. 3. Understand what the target consumers expect and believe to be the most important considerations when deciding on the purchase.
4. Develop a product (or products) that cater specifically for these expectations.
needs and
5. Evaluate the positioning and images, as perceived by the target customers, of competing products in the selected market segments. 6. Evaluate the market leaders position; leading brand that occupies a special position in the consumers mind (cadburys in chocolates); other brands have to necessary relate themselves in some wayto the leaders position; they cannot ignore the position of the leader, nor wish it away. 7. Select an image that sets the product apart from the competing products, thus ensuring that the chosen image matches the aspirations of the target customers. 8. Inform target customers about the product (promotion).
It is essential to understand the relationship between product positioning and brand positioning. The two terms are synonymously and interchangeably used, technically they are different. Product positioning denotes the specific product category / product class in which the given product is opting to compete. And brand positioning denotes the positioning of the brand viz-aviz the competing brands in the chosen product category.
The issues in brand positioning are:1. Which are the competing brands in the chosen product category? 2. What are the unique claims/strength of the various brands? 3. What position do they enjoy in consumers evaluation and perception? 4. According to the consumer rating of the brands, is there a wide gap in expectation performance? What kind of a product/new attribute/new functions will attract the consumer? 5. What is the most favoured position and yet vacant? 6. Can the new brand claim the needed distinction and take the position and satisfy that need?
a. Clarity: - While positioning its brand the firm must be able to position itself in both distinct value, proposition, and to its target audience. b. Consistency: - Consistency in positioning means keeping the positioning plank/bases intact for longtime. Planks should be carefully chosen while positioning. But it does not mean that the firm must change its positioning bases even though its survival is at stake. The firm must be flexible to the changing environment. c. Credibility: - The firm must deliver trustworthy and believable value proposition. There should be perfect match between promise and action. d. Competitiveness: - For surviving in this competitive and changing environment innovative resources, talent pool, competitive advantage, strong financial backup etc are very important.
The real price includes everything the customer has to do to realise its value: time and money spent searching for the right product and sales outlet, travel and purchasing costs, consumption and disposal costs (Mitchell, 1998). If you have a particular product or service, then you want people to think of you when they think of buying the kind of product or service you sell. In India there are few stores that hold a strong positioning in the mind of the consumers. In other countries, there are special stores where you can go only to go to do your laundry. There are special stores where you can go only to "Xerox". There are special stores that are dedicated only for the buying of candles, perfumes etc. These stores have a strong positioning in the minds of the consumers. When the consumer thinks candles he goes to the candles store. When the consumer thinks "Xerox" he goes to the copying stores. Positioning has to be specific. The more specific, the better will the positioning be. For example, consider three stores:
A huge shopping complex that also has a foot ware department A store specially dedicated to foot ware A store specially dedicated to womens foot ware.
If a woman was to think about buying new shoes and she knew about these above stated options, then she would most likely go to the third store. That is the store that will come to her mind when she thinks about buying shoes. People are more likely to trust specialists than generalists. If you are to have an open heart surgery, who would you trust, a general surgeon or a specialist heart surgeon? This is what positioning is all about. Its about finding a place in the minds of the consumers. Making the consumers think of you when they want something you are selling. The best way to achieve this is to clearly differentiate yourself from you competition in what you are offering and clearly tell the consumer exactly what you are offering.
To get a complete idea consider this, suppose that there is a store selling pizza. However, the store is not doing that well in comparison to the pizza selling giants. So the store identifies who its target market is. It sees that maybe its target market might find it convenient to have the pizza home delivered quickly. So it decides to position itself in the minds of the consumers as the "quick home delivery of pizza" store. Next the store changes its pizza and the packaging, labeling, brand name, price , distribution policy etc. to represent its home delivery of pizza positioning. Finally it launches an advertising campaign to tell the people about its unique offer and position its self in the minds of the consumers. Sales go up and the store grows. This is more or less the story of how Dominoes came to be.
TEN MAJOR RULES IN PRODUCT POSITIONING a. Establish a definition of positioning, b. Keep it simple, c. Make it unique, d. Excavate product benefits and market needs, e. Construct a credible position, f. Ensure strong support by starting early, g. Follow the market dynamics, h. Make positioning visible in all communications, i. Quantitavely test alternative positioning options, j. Do not test the positioning statement itself.
With increased communication volume, consumers took a defensive-mind position. Lots of information presented are being denied by customers which makes communication ineffective. In general, the consumer mind uses the information which match previous knowledge and experience. Positioning, as a new approach, creates a full change of the mind of consumers, so that it brings the acception of what is configured in the consumer's mind and work on this stuff. The factual expression in advertising text strategy has lost validity. In 70s, this sense of creativity had no meaning. A basic positioning description must be defined clearly with a poetic and artistic style. 'In positioning period, the key to success is avoiding the wrath of creativity for simple and clear positioning statements. ' In positioning phase, the importance of the company's and its products name (brand) will increase even more. The ensured position for the brand is to be protected. To determine the positioning strategy, first, it is necessary to identify the properties and the images of each of the major rivals completely and correctly. Then, the business will determine its position for its products, at this point, it must put forward the combination of the benefits of customers that are not offered by competitors but are desired by the target market. So, customers will be affected by emphasizing the advantage of buying their companys products, not the opponents. of them the that why opponents of the customers, not products, to buy their products that are highlighted for their benefit, they will be affected. In other words, in the beginning, for the goods or services to be presented to the market, it must be determined by the management that what kind of differences and superiorities they would have, 'why they should be preferred against competitors, systematically and as a strategy planning. Ries and Trout's positioning approach, explains the role of competitors with resembling marketing and war each other. Ries and Trout indicate that without taking competitors into consideration the war of marketing cannot be won. They developed this concept in books ('Marketing Warfare', 'Battle of Your Mind'), and recommended marketers to read war history and famous commanders. Another important assumption of the positioning approach is that many products are perceived/evaluated with others-competitors. At the same time as a result of developing communication, the impact of communication is reduced for the consumers under the bombardment of messages. Additionally, it will not be realistic to tend to consumers who do not demand much information. As a result of all these assumptions, real differences of a product will be revealed with positioning. The concept of positioning, with its emergence has been a great interest. Today, in marketing communication applications and in academic circles it still has a an importance maintaining its freshness. Ries and Trouts basic approach to positioning has been basis for later developed definitions and approaches and has changed very little.
This general framework of positioning approach is also the messenger of the important position of the brand today. Positioning as a process making marketing functions easy, is a strategic tool that can be applied at macro and micro levels. Positioning is a process that tries to identify consumers' perceptions, attitudes and product use patterns in order to determine the best place for product or organization from the point of ompetitive conditions and company opportunities. Because product or market positioning is dependent on the attitudes of the target market, marketing management, either tries to change product specifications according to that attitudes, or tries to change the attitudes of the market. In general, changing goods is easier and cheaper than changing consumers. But sometimes the attitude of the market is so negative that the product may be required to re-position. For example, for Czech "Skoda" brand cars, it was hard to break the impression that they have former Eastern European origin, the company did not want the bad workmanship and unreliable perception of 'Yugo', 'Lada', and 'Poliski Fiat' cars. Skoda makes so much effort for its customers to realize that Volkswagen bought its company and its cars are very much like of Volkswagen's. Positioning, especially with the market segment of products, can be defined as placing the product into the consumers reference frame of product category. Ideally, it is accepted that all marketing / communication plans should include a positioning strategy.
This strategy includes, (a) Positioning objectives, (b) The product's positioning statement (c) The positioning of any featured benefit on the target consumers, (d) An understanding of this position in the market. Positioning tries to obtain new positions in the minds of consumers and to move the products into new positions. Thus, developing a superiority over competitors is intended. This is especially important in high competitive conditions and in markets with mobility barriers. In 1983, when Swatch company of Switzerland produced very colorful, and everyone can buy watches, it changed the concept of what the customers see when they look at watches. The company positioned watches as "fashion accessory and brought up an innovation in the distribution through segmented and high in quality strores. Swatch's success led Timex, Seiko and other firms search on consumer preferences more. For example, in 1996, Timex launched Indiglo watches which have lighted dials in Turkey.
Company profile
3. Study the problem - What is the problem safe need to solve 4. Define the secondary problem or other symptoms of the problem 5. Emotions - List the emotions of the customer as they think about the problem. What is the primary emotion associated with the pain? 6. Market characteristics - Breakdown the characteristics of your primary customer. What do they buy? How do they buy it? What are their hot buttons? What do they worry about when they think of their competition? 7. Channels - Describe the other companies that the customer works with in solving similar problems. Decide if these companies are good partners for you. What is their primary business? How are their sales people compensated? What is their biggest pain at this moment. What can your product offer them? 8. Elevator pitch - Describe the customer, their pain, and how you solve it differently then anything else on the market. Provide just enough information for the listener to want to know more. Target the message to your primary customer and bring their emotions into the pitch. 9. Competitors - List your competitors and their strengths and weaknesses in comparison to your offering.
Research methodology
A variety of methods of study have been adopted by the researcher to fulfill the objectives of the study.
o
In order to have a better grasp of the study, the researcher chose to become a keen observer, studying the various aspects of the organization.
With a view to understand the crunch of the matter and to find out the ground realities, the researcher formed a schedule specifically for the set of respondents. The researcher met the respondents personally, interviewed them and made them to fill the questionnaire.
Primary Data:
Here first hand information is obtained by distributing printed questionnaire to the marketing executives of the company. Data was also obtained from the observation and interview technique adopted by the researcher. Moreover, information was disseminated by the departmental heads.
Secondary Data:
Here the information is obtained from the office , books, websites, newsletter, journals, magazines, newspapers, etc.
SOURCES OF DATA
Primary Data
Secondary Data
Websites
Years of Experience : 15 years. Main Solutions : SIBS Safes integrated Banking Software Total Number of Customers : 550
Describe SAFEs business? Software development & maintenance, Hardware installation & maintenance and Consultancy. 30 % growth yearly.
Where is the brand going? What is the 5 year vision for the
company and its products? SAFEs Vision is to become reliable and cost effective IT solution providers and IT enabled service providers in India. Our Values are beliefs which your company tries to put into practice. These values guide your employees throughout their daily tasks. You should ask, "What are the basic beliefs that we share as a company?" Safe Core Values
o o o
Valued, empowered and informed people make it happen Honesty and integrity guide all our actions and relationships We value, support and contribute to the growth of our communities
Valued, empowered and informed people make it happen The market and our customers drive our business Customer satisfaction is the measure of our success
Safe currently have a marketing plan? Yes : extended over one year Yes
What does safes marketing plan cover? Internet, Advertising, Sales Promotion, Direct Mail Marketing, Public Relations/Publicity
Merits
Percentage 45 15 40
Merits
Respondents 10 30 20 40
Percentage 10 30 20 40
Merits
Respondents 25 28 30 17
Percentage 25 28 30 17
Merits
Respondents 26 24 20
Percentage 26 24 20
Security
30
30
What specifics are they looking for when they look for your type of product?
Merits
Respondents 25 18 22 15 20
Percentage 25 18 22 15 20
What are the values they look for in products such as yours? What are the top of mind questions when you are first contacted?
Merits
Respondents 31 19 20 18 22
Percentage 31 19 20 18 22
What concerns do they have before purchasing? What problem does the product solve for the consumer?
Merits
Respondents 16 13 25 23 23
Percentage 16 13 25 23 23
What is the decision-making process customers use (rational or not) when they purchase your brand? Product integration Price Quality Service Support . Merits Demo Product integration Price Service Support Respondents 28 22 24 26 Percentage 28 22 24 26
Respondents
40 52 8
Percentage
40 52 8
Respondents
38 30
Percentage
38 30
Standards
32
32
Respondents
26 20 5 49
Percentage
26 20 5 49
Target Market
Who will be buying the product? Banks Finance enterprise
Respondents
85 15
Percentage
85 15
Who will be actually using the product? Cooperative banks District co-operative Banks Others
Respondents
70 5 25
Percentage
70 5 25
promotional systems
Respondents
20 38 42
Percentage
20 38 42
FINDING SUGGESTION AND CONCLUSION Findings The findings indicated that the company SAFE had substantial strengths based on the reliability of its products and the belief that the company develops new and exciting products. Research also indicated a clear gap in the market where safe need to improve its marketing skills . However, the research findings also indicated some weaknesses, in particular: consumers felt that Safe does not lead on innovation professionals felt that SAFE did not have as clear a sense of direction as some of its rivals. The findings therefore presented Safe with the challenge of developing a clear and focused position for its brand. Suggestion
Strong brands begin with strong positioning. And strong positioning begins with powerful market segmentation. Once safe understand the market segments that drive profitability, they should use product positioning in conjunction with market segmentation to maximize your competitive advantage. Strategic Insights helps organizations maintain this customer focus by measuring and tracking customer satisfaction. The study approach combines top-level modeling techniques with carefully developed, standardized measures of satisfaction and its drivers. The study analysis explores the roots of satisfaction and dissatisfaction, including the preferences and drivers that influence the behavior of your current customers, your former customers and your competitors' customers.
Conclusion
Companies developing their positioning strategies should first determine attributes and images of competitor companies exactly and accurately. Then they must designate a positioning strategy for their own produced product. The main purpose is to head towards products that are not produced by competitor companies but are desired by consumers and carry out a positioning strategy in this way. What kind of differences products and services offered to target market have from rival products, their superiorities and preference reasons must be planned thoroughly in the beginning. Because the market share is too narrow and products are abundantly offered to target market, it should be always kept in mind that an arduous competition ambiance would arise and a strategic plan should be put in force accordingly and also brands which had lost their market share must be repositioned. In further studies, it is thought that it will be proper to make research on brand positioning strategies and example applications.
BIBLIOGRAPHY
Philip Kotler and Gary Armstorng Principle of Marketing Prentice Hall India Eleventh edition/ 2005 www.google.com www.quickmba.com
APPENDIX
What is the history of the Company? Describe SAFEs business? Where is the brand going? What is the 5 year vision for the
Safe currently have a marketing plan? What does safes marketing plan cover?
generating business?
generating business?
What specifics are they looking for when they look for your type of product?
What are the values they look for in products such as yours? What are the top of mind questions when you are first contacted?
What concerns do they have before purchasing? What problem does the product solve for the consumer?
Firm Experience Turn over Service Support Prize Other installation What is the decision-making process customers use (rational or not) when they purchase your brand? Product integration Price Quality Service Support What does your brand stand for in the customers mind? Excellent Average Not satisfied What are your key differentiators? Product integration Price Standards
Target Market
Who will be buying the product? Banks Finance enterprise Who will be actually using the product? Cooperative banks District co-operative Banks Others Why wouldnt someone buy the product?