MCM -116 MARKETING MANAGEMENT SESSION - 6

Prof.Rajiv Gupta

“Positioning is not what you do to a product. Positioning is what you do the mind of the
prospect. That is, you position the product in the mind of the prospect.”
…Al Ries and Jack Trout
Authors, Positioning Gurus & Consultants

TOPICS, Nature & Impact of competition on marketing strategy:-

 Preference Segments
 Market Targeting
 Differentiation
 Product Positioning

PREFERENCE SEGMENTS
Market Segments also emerge based on the product attributes preferred by
potential buyers. These are:
- Homogenous Preferences
- Diffused Preferences
- Clustered Preferences

Homogenous Preferences This is a market segment where all the consumers

have roughly the same preferences. The market shows no natural segments. It
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can be predicted that existing brands would be similar and cluster around the
middle of the scale.

Diffused Preferences Consumer preferences appear scattered throughout the

space, indicating that consumers vary greatly in their preferences. Usually the
first brand to enter is likely to position itself in the centre to appeal to most
people. If several brands are in the market they are likely to position
throughout the space and show real differences to match consumer differences.

Clustered Preferences Distinct preference clusters emerge, called natural

market segments. Usually first mover firm has three options;
a) Position itself in the centre – hoping to appeal to all groups.
b) Position itself in the largest market segment (concentrated marketing).
c) Develop brands, each positioned in a different segment to pre-empt
competition.

Segment Sales Potential is the Sales potential within a market segment. It is

directly related to the brand’s proximity to the segment’s preferences on
important dimensions.

Market Targeting- After identifying market segment opportunities a company

has to decide how many and which ones to target. Five patterns of target
selection emerge:
a) Single Segment Concentration
b) Selective Specialization
c) Product Specialization
d) Market Specialization
e) Full Market Coverage

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 DIFFERENTIATION Companies are constantly trying to differentiate their
market offering from competitors’. They dream up new services and
guarantees, special rewards for loyal users, new conveniences and enjoyments.
Differentiation is the act of designing a set of meaningful differences to
distinguish the company’s offerings from competitors’ offerings.

Dimensions of Differentiation A company can differentiate its market

offering along five dimensions:
1) Product
2) Services
3) Personnel
4) Channel
5) Image

Product Differentiation can be made on the basis of:-

 Form
 Features
 Performance
 Conformance
 Durability
 Reliability
 Reparability
 Style
 Design

Service Differentiation: when the physical product cannot easily be

differentiated, the key to competitive success may lie in adding value added
services and improving their quality. The main service differentiators are:
 Ordering ease
 Delivery
 Installation
 Customer training
 Customer consulting
 Maintenance and Repair

Personnel Differentiation: Companies can gain strong competitive advantage

through having better trained people. Better-trained personnel exhibit six
characteristics:
 Courtesy: Respectful, friendly and considerate
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 Competence: Skill and knowledge
 Credibility: Trustworthy
 Reliability: perform service consistently and accurately.
 Responsiveness: Quick response to customer problems.
 Communication: Make an effort to understand the customer and communicate
clearly.

Channel Differentiation: Companies can gain competitive advantage through

the way they design their distribution channels’ coverage, expertise and
performance.

Image Differentiation: Buyers respond differently to company and brand

images. Identity and Image need to be distinguished. Identity is the way the
company aims to identify or position itself or its product. Image is the way the
public perceives the company and its products. What is an Effective Image?
An effective image does 3 things:
 Establishes product character and value proposition.
 Conveys the character in distinctive way so as not to confuse it with
competitors’.
 Delivers an emotional power beyond mental image.

Communicating the Image

The image must be communicated for it to work. The communication can be
through:
 Symbols: Logos
 Media: to convey a story, a mood, a claim-something
 distinctive.
 Atmosphere: Physical settings
 Events: By sponsoring of events

Identity and Image

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Product Positioning Vs Differentiation: In product Differentiation the attempt
is to endow the product with certain distinctive attributes, which in turn offer
some value to consumers. In product positioning, the attempt is to lodge or
place the differentiated product in the minds of the target consumers .

Choosing a Positioning Strategy

Step 1. Identifying Possible Competitive Advantages
Step 2. Selecting the Right Competitive Advantage
Step 3. Communicating and Delivering the Chosen Position

Product Positioning: A product’s position is the way the product is defined by

consumers on important attributes. It is the place the product occupies in
consumer’s minds relative to competing products. Marketers should plan
positions that will give their products the greatest advantage in selected target
markets and they must design market mixes to create these planned positions.
To create these planned positions Perceptual positioning maps are used and
products/brands are positioned on two attributes at a time.

Perceptual Map: It shows how target consumers perceive brands in a product

category. It shows positions occupied by rival brands. It suggests where new
brands might be positioned.

Positioning of Different
High
Bar Soaps
moisturizing
• Tone • Zest
7
4 • Lever 2000
• Dove
2
5
• Safeguard
• Lux 8
Nondeodorant 3 Deodorant

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• Lava • Dial
“Product Space”
Representing Consumers’ Perception for • Lifebuoy
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Different Brands of Bar Soap
Low
moisturizing

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How many Differences should we Promote? Each company must decide on
how many differences (eg., benefit, features) to promote to its target customers.
Many marketers advocate promoting only one central benefit – a company
should develop a unique selling proposition(USP) for each brand and stick to it.
Each brand should select an attribute and tout itself as “number one” on that
attribute. Number-one positioning includes:- Best quality, Best service, Lowest
price, Best value, Safest, Fastest, Most customized, Most convenient, Most
advanced technology etc. However, not everyone agrees that single-benefit
positioning is always best. So then, can we promote more than one benefit?
Double-benefit positioning may be necessary if two or more firms claim to be
best on the same attribute. There are even cases of successful triple-benefit
positioning.

Four Major Positioning Errors

1) Under Positioning: some companies discover that buyers have only a vague
idea of the brand. The brand is seen as just another entry in a crowded
marketplace.
2) Over Positioning: buyers have too narrow an image of the brand.

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 3) Confused Positioning: confused image of the brand resulting from the
company making too many claims or changing the brand’s positioning too
frequently.
4) Doubtful Positioning: buyers may find it hard to believe claims in view of the
product’s features, price or manufacture.

Positioning Strategies
 Attribute positioning: Company positions itself on attribute, such as size or
number of years in existence.
 Benefit positioning: - The product is positioned as a leader in a certain benefit.
 Use or application positioning: - Positioning the product as best for some use or
application.
 User positioning: - Positioning the product as best for some user group.
 Competitor positioning: - The product claims to be better than the competitor.
 Product category positioning: - The product is positioned as the leader in a
certain product category.
 Quality or price positioning: - The product is positioned as offering the best
value.
The end result of positioning is the successful creation of a market-focused value
proposition, a cogent reason why the target market should buy the product.

Defining Associations
Points-of-difference Points-of-parity (POPs)
(PODs)  Associations that are not
 Attributes or benefits necessarily unique to the
consumers strongly brand but may be
associate with a brand, shared with other
positively evaluate, and brands
believe they could not
find to the same extent
with a competitive brand