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PRODUCT POSITIONING

PRODUCT POSITIONING. 15.823 Internet Marketing Prof. Glen L. Urban Spring 2001. Understanding Customers Consumer Behavior B2C vs B2B. Strategy Formulation Trust vs. Push Product Design Segmentation Positioning. Customer Acquisition Advertising / PR/Selling Pricing & Promotion.

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PRODUCT POSITIONING

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  1. PRODUCT POSITIONING 15.823 Internet Marketing Prof. Glen L. Urban Spring 2001

  2. Understanding Customers Consumer Behavior B2C vs B2B Strategy Formulation Trust vs. Push Product Design Segmentation Positioning Customer Acquisition Advertising / PR/Selling Pricing & Promotion Distribution Channel Logistics Relationship Building Fulfillment Service

  3. OUTLINE • Positioning Versus Segmentation • Positioning Example • Analytic support for Mapping • Does it Pay to be First? -- Order of Entry Theory • Implications for Internet

  4. A E A • • • • • B C • • D • B

  5. POSITIONING GIVEN SEGMENTATION CBP DIMENSIONS COORDINATES FULFILLMENT UNIQUE POSITION SHARE/PROFIT

  6. MAPPING STEPS Define category/segment Identify products that compete Attributes and features that differentiate Group attributes - perceptual dimensions Draw map Implications

  7. CLASS EXAMPLE • On Line Trading • evoke -- dimensions --triad comparisions • judgement for position • preference vectors • implications

  8. POSITIONING ANALYSIS LEVEL I focus group customer contact inspect competition perceptual map -- judgment LEVEL II factor analysis preference vectors conjoint analysis LEVEL III simulation models

  9. MAPPING INPUTS Durability/resale performance MPG reliable Luxury style safe maintain quality 6 6 5 6 5 5 5 7 6 5 7 5 4 4 4 5 6 4 3 6 4 4 7 5 3 5 3 BILL -- M.B. 500 BILL -- HONDA BILL -- BUICK ELECTRA

  10. DATA COLLECTION • Email lists • Zoomerang • On Line Panels • NFO • Burke • Greenfield

  11. FACTOR LOADINGS Dimensions Attribute Luxury 0.88 0.10 Style 0.72 0.08 Reliable 0.45 0.63 M.P.G. 0.24 0.64 Safe 0.52 0.31 Maintain 0.10 0.67 Quality 0.48 0.64 Durability & Resale 0.38 0.60 Performance 0.67 0.35

  12. Honda Rational • Olds • Lincoln Town Car • Buick Riviera • Chrysler New Yorker • Cadillac Eldorado Emotional

  13. Honda Rational • MB • BMW • Olds • Lincoln Town Car • Buick Riviera • Jaguar • Chrysler New Yorker • Cadillac Eldorado Emotional

  14. Honda Rational • MB • BMW • Olds • Lincoln Town Car • Buick Riviera • Jaguar • Chrysler New Yorker • Cadillac Eldorado Emotional

  15. PERCEPTION ENGINEERING FEATURES PREFERENCE

  16. SURUGA EXAMPLE

  17. Buyer Centric Idea Base Trust for Customer Construct business model of eCRM. Construct new services and products of eBusiness. Construct secure business with internet customers. Aim of eBusiness@Suruga Keyword for Success What shall Suruga do?

  18. INTERNET STUDY? • Talk to Customers -- Listen • Study Competitors -- judgmental Map • Focus Groups • Budget study if VC -- Crowded Out There • Active Role in Study

  19. STEPS BUDGET DEFINE TARGET MARKET DESIGN SURVEY ATTRIBUTE GENERATION STATISTICAL MAPPING Name Dimensions Number of Dimensions Coordinates of Brands Importance Vectors MANAGER’S ROLE $50k to $250K Be Sure Correct Segment Definition is Used Specify Decision Requirements Assure Completeness Input Judgment Examine Additional Dimension for Relevance Review for Reasonableness Decide on Number of Sub-group Internet Study

  20. STEPS FEATURES SIMULATE IMPROVED POSITIONING MANAGER’S ROLE Select Features and Levels, Link to preference and/or Perception Be Sure Shift Can Be Achieved, Confirm with Concept/Product Tests Internet Study - Cont’d

  21. DOES IT PAY TO BE FIRST?

  22. THEORY • Determinants -- +/- • Memory -- Accessibility • Switching costs - risk and satisfaction • Learning about Market • Market Power - Share & Channel • Scale -- Production and Funds • Continuing Innovation • Standard Setting • Broader Product Line • Technology/Market window • Best Positioning? • Empirical

  23. ORDER OF ENTRY AND MARKET SHARE IN CONSUMER GOODS BUSINESS Average Market Share Pioneer 29 Early Follower 17 Late Entrant 12 (371 SBU’s) Frequency Distribution for Market Share Less than 10 10-19 20-29 30 & up Total Pioneer 16% 20% 23% 41% 100% Early Follower 41% 24% 19% 16% 100% Late Entrant 56% 25% 12% 7% 100%

  24. DATA 131 Brands 36 Categories Share - Last Purchases Order Advertising Preference

  25. ORDER OF ENTRY 1ST 2ND 3RD 4TH 5TH 6TH 7TH 100 57 43 42 32 26 34 26 22 18 29 22 18 16 15 25 19 16 15 13 12 23 17 15 13 12 11 9 Market Share

  26. Strategic Implications Market Share Reward for Innovation If First: Position Well-Preempt Support - Advertising & Promotion If Second or Third: Premium Position Support - Advertising & Promotion Faster But Lower Innovate for Market Leadership -- But Risk

  27. IMPLICATIONS FOR INTERNET • Mapping -- Do It! • Listen /Focus Groups • Budget for Study in VC • Segmentation and Positioning Strategy vs. Potential Competition -- Preempt • Core Benefit Proposition -- Not Technology • Establish with Features and Keep Innovating • First In has Value • But Catch window • Have Best Position • Spend behind It

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