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Chapter # 11Chapter # 11

Positioning and differentiatingthe market offering through

the product life cycle

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Products Position the act of designing thecompanys offering and image to occupy adistinctive place in the mind of target market.i.e. Volvo positions on safety.

Positioning

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How many ideas to promote ?

Unique selling proposition (UPS) Mercedes

promotes its great engineering, Crest toothpaste

promotes its anticavity protection.

Double benefit positioning Volvo safest & most

durable

Triple-benefit positioning- Smith Kline beecham

promotes its aquafresh toothpaste - anticavity

protection, better breath and whiter teeth.

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Major positioning errors

Under-positioning buyer have vague idea of thebrand.

Over-positioning buyer may have too narrow animage of the brand.

Confused positioning - buyer might have a

confused image of the brand resulting fromcompanys making too many claims or changing thebrands positioning frequently.

Doubtful positioning buyer may find it hard to

believe the brand claims about product.

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How do companies select their positioning

Attribute positioning

Benefit positioning

Use or application positioning

User positioning

Competitor positioningProduct category positioning

Quality or price positioning

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InvestLHH34Service

MonitorHLL68Quality

MonitorMMH86Cost

HoldMLL88Technology

Recomm-

ended

action

Competitors

ability to

standing

Affordabilit

y and speed

Importanceof

Improving

standing

Competitor

standing

Company

standing

Competitive

advantages

Which position to promote

H = High, M= Medium & L= Low

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Criteria for

determining

which

difference

to promote

Affordable Superior

Preemptive

Distinctive

Important

Communicable

Profitable

Adding Further differentiation

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Crego and schiffrin Customer-centeredorganizations should following three step process:

Define the customer value model

Building customer value hierarchy Basic

Expected Desire Unanticipated

Deciding on customer value package

Adding further differentiation

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FragmentedStalemated

SpecializedVolume

Few Many

Small

Large

Number of approachesto achieve advantages

S

ize

ofthe

advantage

s

Differentiation tools

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Product Differentiation Variables

Form

Features

Performance

Conformance

Durability

ReliabilityRepairability

Style

Design

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Service Differentiation Variables

Ordering ease

DeliveryInstallation

Customer training

Customer consultingMaintenance and repair

Miscellaneous

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Personnel Differentiation Variables

Competence

Courtesy

Credibility

Reliability

Responsiveness

Communication

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Channel Differentiation Variables

Coverage

Expertise

Performance

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Image Differentiation Variables

Symbol

Media

Atmosphere

Events

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Time

Introduction

Profits

Sales

Growth Maturity DeclineLosses

Sales and

Profits ($)

Product Life Cycle

Sales and Profits Over the Products Life From Introduction to Decline

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Sales

Costs

Profits

Marketing Objectives

Product

Price

Low sales

High cost per customer

Negative

Create product awarenessand trial

Offer a basic product

Use cost-plus

Distribution Build selective distribution

Advertising Build product awareness among early

adopters and dealers

Introduction Stage of the PLC

Summary of Characteristics, Objectives, & Strategies

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Sales

Costs

Profits

Marketing Objectives

Product

Price

Rapidly rising sales

Average cost per customer

Rising profits

Maximize market share

Offer product extensions, service,

warranty

Price to penetrate market

Distribution Build intensive distribution

Advertising Build awareness and interest in themass market

Growth Stage of the PLC

Summary of Characteristics, Objectives, & Strategies

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Sales

Costs

Profits

Marketing Objectives

Product

Price

Peak sales

Low cost per customer

High profits

Maximize profit while defendingmarket share

Diversify brand and models

Price to match or best competitors

Distribution Build more intensive distribution

Advertising Stress brand differences and benefits

Maturity Stage of the PLC

Summary of Characteristics, Objectives, & Strategies

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Summary of Characteristics, Objectives, & Strategies

Sales

Costs

Profits

Marketing Objectives

Product

Price

Declining sales

Low cost per customer

Declining profits

Reduce expenditure and milk the brand

Phase out weak items

Cut price

Distribution Go selective: phase out unprofitableoutlets

Advertising Reduce to level needed to retainhard-core loyal customers

Decline Stage of the PLC