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11. Positioning and Differentiating the Market Offering Through the Product Life Cycle. Kotler on Marketing. Watch the product life cycle; but more importantly, watch the market life cycle. Chapter Objectives. In this chapter, we focus on the following questions:
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11 Positioning and Differentiating the Market Offering Through the Product Life Cycle
Kotler on Marketing Watch the product life cycle; but more importantly, watch the market life cycle.
Chapter Objectives • In this chapter, we focus on the following questions: • How can the firm choose and communicate an effective positioning in the market? • What are the major differentiating attributes available to firms? • What marketing strategies are appropriate at each stage of the product life cycle? • What marketing strategies are appropriate at each stage of the market’s evolution?
Developing and Communicatinga Positioning Strategy • Positioning • Value position
Table 11.1: Examples of Value PropositionsDemand States and Marketing Tasks
Developing and Communicatinga Positioning Strategy • Positioning According to Ries and Trout • Strengthen own current position • Grab an unoccupied position • De-position • Re-position • Product ladders • Positioning According to Treacy & Wiersema • Value disciplines • Product leader • Operationally excellent firm • Customer intimate firm
Developing and Communicating a Positioning Strategy • Treacy and Wiersema propose that a business should follow four rules for success • 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 lose out to a competitor. • Keep becoming more adequate in the other two disciplines, because competitors keep raising customers’ expectations.
Developing and Communicatinga Positioning Strategy • Positioning: How many ideas to promote? • Unique selling proposition • Four major positioning errors • Underpositioning • Overpositioning • Confused positioning • Doubtful positioning
Developing and Communicatinga Positioning Strategy • Theme park’s positioning possibilities: • Attribute positioning • Benefit positioning • Use or application positioning • User positioning • Competitor positioning • Product category positioning • Quality or price positioning • Which Positioning to Promote?
Table 11.2: Method for Competitive-Advantage Selection See text for complete table
Developing and Communicatinga Positioning Strategy • Communicating the Company’s Positioning • Positioning statement Mountain Dew’s Web site supports its positioning
Adding Further Differentiation • Differentiation • Differentiation criteria: • Important • Distinctive • Superior • Preemptive • Affordable • Profitable
Adding Further Differentiation • Exceed customer expectations with a three-step process • Defining the customer value model • Building the customer value hierarchy • Basic • Expected • Desired • Unanticipated • Deciding on the customer value package
Table 11.3: Differentiation Variables See text for complete table
Differentiation Tools • Product Differentiation • Form • Features
Differentiation Tools • Performance Quality • Conformance Quality • Durability • Reliability • Reparability • Style • Design: The Integrating Force • Services Differentiation • Ordering Ease
Differentiation Tools • Delivery • Quick response system • Installation • Customer Training • Customer Consulting • Maintenance and Repair HP’s online support page
Differentiation Tools • Miscellaneous Services • Personnel Differentiation • Competence • Courtesy • Creditability • Reliability • Responsiveness • Communication
Differentiation Tools • Channel Differentiation • Image Differentiation • Identity • Image • Symbols, Colors, Slogans, Special Attributes • Physical plant • Events and Sponsorship • Using Multiple Image-Building Techniques
Product Life-Cycle Marketing Strategies • To say that a product has a life cycle asserts four things • Products have a limited life. • Product sales pass through distance stages, each posing different challenges, opportunities, and problems to the seller. • Profits rise and fall at different stages of the product life cycle. • Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life-cycle stage.
Figure 11.4: Cost Product Life-Cycle Patterns Product Life-Cycle Marketing Strategies
Figure 11.5: Style, Fashion, and Fad Life Cycles Product Life-Cycle Marketing Strategies
Figure 11.6: Long-Range Product Market Expansion Strategy (P = Product; M = Market) Product Life-Cycle Marketing Strategies • Marketing Strategies: Introduction Stage • The Pioneer Advantage • Inventor • Product pioneer • Market pioneer
Figure 11.7: Stages of the Competitive Cycle Product Life-Cycle Marketing Strategies • The Competitive Cycle
Product Life-Cycle Marketing Strategies • Marketing Strategies: Growth Stage • Improve product quality and add new product features and improved styling • Add new models and flanker products • Enter new market segments • Increase distribution coverage and enter new distribution channels • Shift from product-awareness advertising to product-preference advertising • Lower prices to attract next layer of price-sensitive buyers
Product Life-Cycle Marketing Strategies • Marketing Strategies: Maturity Stage • Market Modification • Expand number of brand users by: • Converting nonusers • Entering new market segments • Winning competitors’ customers • Convince current users to increase usage by: • Using the product on more occasions • Using more of the product on each occasion • Using the product in new ways
Product Life-Cycle Marketing Strategies • Product modification • Quality improvement • Feature improvement • Marketing-Mix Modification • Prices • Distribution • Advertising • Sales promotion • Personal selling • Services
Product Life-Cycle Marketing Strategies • Marketing Strategies: Decline Stage • Increase firm’s investment (to dominate the market and strengthen its competitive position) • Maintain the firm’s investment level until the uncertainties about the industry are resolved. • Decrease the firm’s investment level selectively by dropping unprofitable customer groups, while simultaneously strengthening the firm’s investment in lucrative niches • Harvesting (“milking”) the firm’s investment to recover cash quickly • Divesting the business quickly by disposing of its assets as advantageously as possible.
Table 11.5: Summary of Product Life-Cycle Characteristics, Objectives, and Strategies See text for complete table