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MM: Chapter 11

MM: Chapter 11. Positioning and differentiating the Market Offering Through 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.

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MM: Chapter 11

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  1. MM: Chapter 11 Positioning and differentiating the Market Offering Through the Product Life Cycle

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

  3. 4 major positioning errors underpositioining overpositioning confused positioning doubtful positioning

  4. 4 major positioning errors • Underpositioning: a vague idea of the brand e.g., Siam University • Overpositioning: a too narrow image of the brand e.g., ABAC • Confused positioning: a confused image of the brand ‘coz of too many claims • Doubtful positioning: a hard-to-believe claim of the brand e.g., ABAC’s medicine faculty

  5. Different Positioning Strategies Quality/Price Positioning (Rejoice) Attribute Positioning (Biyok Tower) Benefit Positioning (Smooth E) Product category Positioning (Mistine) Use or Application Positioning (Aspirin) Competitor Positioning (DTAC) User Positioning (Vermicelli)

  6. What is Differentiation? • A process of adding a set of meaningful and valued differences to distinguish a company’s offering from competitors’ offerings.

  7. How to Differentiate • 3 steps: • Defining the customer value model:listing all pdt or service factors • Building customer value hierarchy • Deciding on the customer value package: combining important factors to make your product outperform competitors

  8. 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 1

  9. Differentiation tools 2 Channel -Coverage -Expertise -Performance • Image • Symbols • Media • Atmosphere • Events • Services • - Ordering • ease • - Delivery • - Installation • Customer • Training • Customer • Consulting • - Maintenance • and Repair • Miscell. Product -Form -Features -Performance -Conformance -Durability -Reliability -Reparability -Style -Design • Personnel • -competence • Courtesy • Credibility • Reliability • Responsiveness • Communication

  10. 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.

  11. Stages of Product Life Cycle • Introduction • Growth • Maturity • Decline

  12. Types of PLC • Product categories:carbonated drinks • Product forms:soft drinks • Product:cola • Branded products:Coke

  13. Shapes of PLC • Growth-slump-maturity pattern:Microwave • Cycle-recycle pattern:TV, drugs • Scalloped pattern:Baking Soda

  14. Strategies for each Stage of PLC Maturity Stage Growth Stage Declining Stage Introduction Stage

  15. Introduction Stage • Slow sales growth • Heavy distribution and promotion expenses • Negative profits • 4 possible strategies :- 1. Rapid skimming 2. Slow skimming 3. Rapid penetration 4. Slow penetration

  16. 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.

  17. 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

  18. Maturity Stage • Dominated by a few firms. • Some firms abandon weaker products. • Modification strategies :- • Market modification • Product modification • Marketing-mix modification

  19. 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

  20. 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.

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