Crafting the Brand Positioning and Dealing with Competition

1. Crafting the Brand Positioning and Dealing with Competition Key Concepts

2. What is Positioning? • The act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market. • Result is the creation of a customer-focused value proposition: • A cogent reason why the target market should buy the product.

3. Competitive Frame of Reference • Category membership—the products or sets of products with which a brand competes and which function as close substitutes. • Need to understand consumer behavior and the consideration sets consumers use in making brand choices.

4. Points-of-Parity and Points-of-Difference Points-of-difference (PODs) • Attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe they couldn’t find to the same extent with a competitive brand. Points-of-parity (POPs) • Associations that aren’t necessarily unique to the brand but may in fact be shared with other brands. • Category points-of-parity • Competitive points-of-parity

5. Establishing Category Membership Announcing category benefits Comparing to exemplars Relying on the product descriptor

6. Key Criteria for Points-of-Difference Desirability Criteria • Relevance • Distinctiveness • Believability Deliverability Criteria • Feasibility • Communicability • Sustainability

7. Differentiation Strategies • Competitive advantage—a company’s ability to perform in one or more ways that competitors can’t or won’t match. • Few are sustainable, but a leverageable advantage can be used as a springboard to new advantages. • Focus on building competitive advantages as customer advantages.

8. Product Differentiation • Form • Features • Customization • Performance quality • Conformance quality • Durability • Reliability • Repairability • Style • Design

9. Service Differentiation • Ordering ease • Delivery • Installation • Customer training • Customer consulting • Maintenance and repair • Returns

10. Other Dimensions of Differentiation • Personnel • Channel • Image

11. Five Forces that Determine Marketing Attractiveness • Industry competitors • Potential entrants • Substitutes • Buyers • Suppliers

12. Threats Posed By These Forces • Threat of intense segment rivalry. • Threat of new entrants. • Threat of substitute products. • Threat of buyers’ growing bargaining power. • Threat of suppliers’ growing bargaining power.

13. Industry and Market Views of Competition • Industry—a group of firms that offers a product or class of products that are close substitutes for each other. • Classified by: • Number of sellers • Degree of product differentiation • Presence or absence of entry, mobility, and exit barriers • Cost structure • Degree of vertical integration • Degree of globalization

14. Analyzing Competitors • Strategies • Objectives • Strengths • Weaknesses

15. Competitor Strengths and Weaknesses • Share of market • Share of mind • Share of heart

16. Selecting Competitors • Strong vs. weak—most companies aim at weak competitors. • Close vs. distant—most companies compete with the rivals that resemble them the most. • “Good” vs. “bad”—good competitors play by industry rules, make realistic assumptions, set reasonable prices, and favor a healthy industry.

17. Competitive Strategies • Leader • Challenger • Follower • Nicher

18. If you are a Market Leader, you will want to • Expand the total market • Defend market share • Expand market share

19. If you are a Market Leader, how to expand total market? • Market-penetration strategy • New-market segment strategy • Geographical-expansion strategy

20. If you are a Market Leader, how to defend your market share • Position defense • Flank defense • Preemptive defense • Counteroffensive defense • Mobile defense • Contraction defense

21. If you are a Market Leader, how to expand your market share • Factors to consider before pursuing: • The possibility of provoking antitrust action • Economic cost • Pursuing the wrong marketing activities • The effect of increased market share on actual and perceived quality

22. Other Competitive Strategies • Market-challenger strategies • Market-follower strategies • Market-nicher strategies

23. Market-Challenger’s Strategies • Define the strategic objective and opponents. • Decide who to attack: • Market leader • Market equals that are underperforming • Small local and regional firms

24. Market Challenger’s Attack Strategies • Frontal attack • Flank attack • Encirclement attack • Bypass attack • Guerilla warfare

25. Market-Follower’s Strategies • Counterfeiter • Cloner • Imitator • Adapter

26. Specialized Niche Roles • End-user • Vertical-level • Customer-size • Specific-customer • Geographical • Product or product-line • Product-feature • Job-shop • Quality-price • Service • Channel

27. Balancing Customer and Competitor Orientations Competitor-centered company • Looks at what competitors are doing and then formulates competitive reactions. Customer-centered company • Focuses more on customer developments in formulating its strategies.