MM: Chapter 11

PositioningPositioning and differentiating differentiating the

Market OfferingThrough the

Product Life Cycle

Positioning

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

4 major positioning errors

underpositioining

doubtful positioning

overpositioning

confused positioning

Underpositioning:Underpositioning: a vague idea of the brand e.g., Siam University

Overpositioning:Overpositioning: a too narrow image of the brand e.g., ABAC

Confused positioning:Confused positioning: a confused image of the brand ‘coz of too many claims

Doubtful positioning:Doubtful positioning: a hard-to-believe claim of the brand e.g., ABAC’s medicine faculty

4 major positioning errors

Different Positioning Strategies

AttributeAttributePositioningPositioning(Biyok Tower)(Biyok Tower)

BenefitBenefitPositioningPositioning(Smooth E)(Smooth E)

Use or Use or ApplicationApplicationPositioningPositioning

(Aspirin)(Aspirin) UserUserPositioningPositioning(Vermicelli)(Vermicelli)

CompetitorCompetitorPositioningPositioning

(DTAC)(DTAC)

ProductProduct categorycategory

PositioningPositioning(Mistine)(Mistine)

Quality/PriceQuality/PricePositioningPositioning

(Rejoice)(Rejoice)

What is Differentiation?What is Differentiation? A process of adding a set of A process of adding a set of

meaningful and valued differences to meaningful and valued differences to distinguish a company’s offering from distinguish a company’s offering from competitors’ offerings.competitors’ offerings.

How to DifferentiateHow to Differentiate 3 steps:3 steps:

Defining the customer value model:Defining the customer value model: listing all pdt or service factorslisting all pdt or service factors

Building customer value hierarchyBuilding customer value hierarchy Deciding on the customer value Deciding on the customer value

package: package: combining important factors combining important factors to make your product outperform to make your product outperform competitors competitors

Differentiation Tools 1 As differentiation opportunities varies

with the type of industry, we need to identify type of industry. Volume industry Stalemated (commodity-type) industry Fragmented industry Specialized industry

Differentiation tools 2

Product-Form-Features-Performance-Conformance-Durability-Reliability-Reparability-Style-Design

Image-Symbols-Media-Atmosphere-Events

Channel-Coverage-Expertise-Performance

Personnel-competence-Courtesy-Credibility-Reliability-Responsiveness-Communication

Services- Ordering ease- Delivery- Installation- Customer Training- Customer Consulting- Maintenance and Repair-Miscell.

Product Life Cycle Products have a limited life. Product sales pass through different

stages, posing different challenges. Profits rise and fall at different

stages. Products require different marketing,

financial, manufacturing, purchasing and HR mgmt in each stage.

Stages of Product Life Cycle

Introduction Growth Maturity Decline

Types of PLCTypes of PLC Product categories:Product categories: carbonated carbonated

drinksdrinks Product forms:Product forms: soft drinkssoft drinks Product:Product: colacola Branded products:Branded products: CokeCoke

Shapes of PLCShapes of PLC Growth-slump-maturity pattern:Growth-slump-maturity pattern:

MicrowaveMicrowave Cycle-recycle pattern:Cycle-recycle pattern: TV, drugsTV, drugs Scalloped pattern:Scalloped pattern: Baking SodaBaking Soda

Strategies for each Stage of PLCStrategies for each Stage of PLC

Introduction Introduction StageStage

DecliningDecliningStageStage

MaturityMaturityStageStage

Growth Growth StageStage

Introduction Stage Slow sales growth Heavy distribution and promotion

expenses Negative profits 4 possible strategies :-

1. Rapid skimming2. Slow skimming3. Rapid penetration4. Slow penetration

Introduction Stage Pioneer advantage  1. Highly rewarding, risky and expensive 2. Early users will favor the pioneer’s brand if they try it and find it to be satisfactory.     3. Pioneer’s builds the standard of required attributes a product class should process.     4. Economies of scale, technological leadership, ownership of scarce assets and creation of entrance barriers.

Growth Stage Rapid sales growth Decline in promotion-sales ratio Improved product quality, new

product features New models Enters new mkt segment Increased distribution coverage Primary dd selective demand Lower prices for price-sensitive

buyer

Dominated by a few firms. Some firms abandon weaker

products. Modification strategies :-

Market modification Product modification Marketing-mix modification

Maturity Stage

Decline Stage

Sales drops because of: Technological advances Shift in consumer tastes Increased domestic and foreign competition

Drop weak product except in case it sustains the sales of other products.

Ways to cope with declining industry: Increasing investment Maintaining investment Decreasing investment selectively Harvesting Divesting

Comments on PLC Concept

Benefits It helps marketer interpret product and mkt

dynamics. It helps characterize the main mkt strategies. It can be used to measure product performance

against similar products.Disadvantages In reality, PLC does not have a fixed sequence. In reality, PLC is the result of mkting strategies

rather than a course the sales must follow.