Positioning Dr B N F Warnakulasooriya University of

Positioning Dr. B. N. F. Warnakulasooriya University of Sri Jayewardenepura Dr. B. N. F. Warnakulasooriya 1

Positioning (P) • The act of designing the company’s offering and image to occupy a distinctive place in the mind of the Tgt Mkt. P requires every tangible aspect of 4 P s to support the chosen P strategy • The way the product is defined by consumers on important attributes. • The end result of P is the successful creation of a Customer Focused Value Proposition ( the cogent reason why the Tgt mkt should buy the product). Dr. B. N. F. Warnakulasooriya 2

• Michael Treacy (MT) and Fred Wiersema (FW) proposed a framework –” Value Discipline”. Within its industry, a firm could aspire to be : – The product leader (PL) – The operationally excellent firm (OE) and – The customer intimate (CI) firm Dr. B. N. F. Warnakulasooriya 3

• This is based on the notion that in every market there is a mix of three types of customers: • Some customers favour the firm that is advancing on the technological Frontier (PL) • Other customers want highly reliable performance (OE) • Others want high responsiveness in meeting their individual needs (CI) Dr. B. N. F. Warnakulasooriya 4

• MT and FW observed that a firm cannot normally be best in all three ways or even in two ways. It lacks sufficient resources, and each value discipline requires different managerial mind sets and investment that often conflict. • MT and FW propose that a business should follow four rules for success: Dr. B. N. F. Warnakulasooriya 5

• Become best at one of the three value disciplines • Achieve an adequate performance level in the other two disciplines • Keep improving one’s superior position in the chosen discipline so as not to loose out to a competitor • Keep becoming more adequate in the other two disciplines because competitors keep raising customer’s expectations Dr. B. N. F. Warnakulasooriya 6

Positioning requires that similarities and differences between brands be defined and communicated. It requires determining the frame of reference by identifying the TMkt and the competition and identifying the ideal points of parity (POP) and points of difference (POD) brand association. Dr. B. N. F. Warnakulasooriya 7

Competitive Frame of Reference • Determine Category Membership – the products or sets of products with which a brand competes and which function as close substitutes. • Pay attention on Tgt mkt decisions - Dr. B. N. F. Warnakulasooriya 8

Points of Parity (POP) and Points of Difference (POD) • PODs are attributes/ benefits consumers strongly associate with a brand, positively evaluate, and believe that they could not find to the same extent with a competitive brands. • The brand must demonstrate clear superiority. Dr. B. N. F. Warnakulasooriya 9

• POP : Attributes or benefits that are not unique to the brand but may be shard with other brands. POP is of two basic forms: – Category : associations consumers view as essential to be a legitimate and credible offering within a certain product/service category. They are necessary but not necessarily sufficient conditions for brand choice – Category POP may change over time due to technological advances, legal developments, or consumer trends. 10 Dr. B. N. F. Warnakulasooriya

• Competitive POPs : Associations designed to negate competitors’ PODs. If, in the eyes of consumers, the brand association designed to be the competitors’ POD is as strong for the brand as for competitors and the brand is able to establish another association as strong, favorable, and unique as part of its POD, the brand should be in a superior competitive position. Dr. B. N. F. Warnakulasooriya 11

• To achieve a POP on a particular attribute/brand, a sufficient number of consumers must believe that the brand is good enough on that dimension. There is a zone or range of tolerance or acceptance with POP. Dr. B. N. F. Warnakulasooriya 12

Establishing Category Membership (CM) • Inform consumers of a brand’s CM: – When the CM is not apparent – e, g, introduction of new product, high tech products – Where consumers know a brand’s CM but may not be convinced that the brand is a valid member of the category. straddle Dr. B. N. F. Warnakulasooriya 13

• Brand are sometimes affiliated with categories in which they do not hold membership. This approach is one way to highlight a brand’s POD, providing that consumers know the brand’s actual membership. With this approach it is important that consumers understand what the brand stand for and not just what it is not. It is important to not be trapped between categories. • The preferred approach to positioning is to inform consumers of a brand’s membership before staring its POD. Consumers need to know what a product is and what functions it serves before deciding whether it dominates the competing brands Dr. B. N. F. Warnakulasooriya 14

Ways to convey a brand’s CM • Announcing Category benefits – To reassure consumers that a brand will deliver on the fundamental reason for using category, benefits are frequently used to announce CM. • Relying on the product descriptor. Dr. B. N. F. Warnakulasooriya 15

Choosing POPs and PODs • POPs are driven by the needs of CM ( to create category POPs) and necessity of negating competitor’s PODs (to create competitive POPs). • In choosing PODs, two important considerations are : – Consumer desirability of POD – Firm’s capability to deliver on the POD Dr. B. N. F. Warnakulasooriya 16

Possible POPs and PODs Product Differentiation Services Differentiation i. e. Features, Performance, Style & Design, Attributes E. g. LG Door Cooling E. g. ODEL Channel Differentiation E. g. Dell People computers & Differentiation Teleseen i. e. Hiring, Training Characters Marketing Image Differentiation i. e. Symbols, i. e. Delivery, Installation, Repair Services, Customer Training Services E. g. Singer Better People Than Competitors Do E. g. HSBC Dr. B. N. F. Warnakulasooriya 17

Desirability Criteria for PODs • Relevance – TM must find the POD personally relevant and important. • Distinctiveness – TM must find the POD distinctive and superior. • Believability - TM must find the POD believable and credible. A brand must offer a compelling reason for choosing it over the other options. Dr. B. N. F. Warnakulasooriya 18

Deliverability Criteria for PODs • Feasibility – The must be actually create the POD. The product design and marketing offering must support the desired association. • Communicability – It is very difficult to create an association that is not consistent with existing consumer knowledge or that consumers, for whatever reason, have trouble believing. Consumers must be given a compelling reason and understandable rationale as to why the brand can deliver the desired benefits. Dr. B. N. F. Warnakulasooriya 19

• Sustainability- Positioning should be preemptive, defensible, and difficult to attack. And, it should consider whether the favourability of a brand association can be reinforced and strengthened over time. Sustainability will depend on internal commitment and use of resources as well as external market forces. Marketers must decide at which level /s to anchor the brand’s PODs. Different possibilities are: § Brand attributes – Ex. Dove soap – one Dr. B. N. F. Warnakulasooriya 20 quarter cleansing cream

Important Profitable Affordable Criteria For Determining Which Differences To Promote Distinctive Superior Preemptive Communicable Dr. B. N. F. Warnakulasooriya 21

Attributes are the least desirable level to position because: • the buyer is more interested in benefits • competition can easily copy attributes • the current attributes may become less desirable § Brand Benefits – Dove Soap – Softer skin § Brand Value – Dove Soap – Being more attractive Dr. B. N. F. Warnakulasooriya 22

Creating POPs and PODs • One common difficulty in creating a strong competitive brand positioning is that many of the attributes or benefits that make up the POPs and PODs are negatively correlated. Ex. Low price vs. High quality, Taste vs Low calories, Powerful vs safe. Efficacious vs Mild. • And even , individual attributes and benefits have positive and negative aspects. Ex, A brand that is seen as having a great deal of heritage. Heritage could suggest experience, wisdom, and expertise. On the other hand, it might imply being old – fashioned and not up to date. Dr. B. N. F. Warnakulasooriya 23

• However, consumers typically want to maximize both attributes and benefits. Ø Ways to address the problem of negatively correlated POPs and PODs Develop a product or service that performs well on both dimension. Launch two different marketing campaigns, each one devoted to a different brand attribute or benefits. These campaigns may run together at one point in time or sequentially over time. The hope is that consumers will be less critical when judging the POP and POD benefits isolation. Dr. B. N. F. Warnakulasooriya 24

– Leverage Equity of another entity: Link themselves to any kind of entity that possesses the right kind of equity as a means to establish an attribute or benefit as a POP or POD. Branded ingredients may also lend some credibility to a questionable attribute in consumers’ mind. – Redefine the Relationship: Convince consumers that in fact the relationship is positive. Provide consumers with a different perspective and suggest they may be overlooking or ignoring certain considerations, Dr. B. N. F. Warnakulasooriya 25

• Company must take strong steps to deliver and communicate the desired position to target consumers. • All the company’s marketing mix must support the positioning strategy. • Positioning strategy must be monitored and adapted over time to match changes in consumer needs and competitors’ strategies. Dr. B. N. F. Warnakulasooriya 26