CH07: Value Proposition and Positioning

Question 1

the 3 types of customer value

Answer 1

• functional value
• psychological value
• monetary value

Question 2

functional value

Answer 2

benefits and costs directly related to the offering’s performance

Question 3

psychological value

Answer 3

psychological costs and benefits; emotional costs/benefits

Question 4

monetary value

Answer 4

financial costs and benefits; can include long-term monetary implications (e.g. car maintenance)

Question 5

total customer benefit

Answer 5

perceived value of combination of functional, psych, and monetary benefits for customers due to product, service, and image

Question 6

total customer cost

Answer 6

perceived cost of combination of functional, psych, and monetary costs incurred by customers via evaluating, obtaining, using, and disposing of offering

Question 7

customer value prop

Answer 7

the difference between the total costs and total benefits perceived by the customer for different choices

Question 8

customer value analysis

Answer 8

reveals the company’s strengths and weaknesses relative to those of various competitors
- identify relevant attributes and benefits
- assess relative importance of said values and benefits
- assess company’s and competitors’ performance on said values and benefits
- monitor over time

Question 9

positioning

Answer 9

designing a company’s offering and image to occupy a distinctive place in the minds of the target market

Question 10

frame of reference

Answer 10

benchmark against which customers can evaluate the benefits of a company’s offering; can use multiple frames of reference as needed

Question 11

points of difference (PODs)

Answer 11

attributes/benefits that are specific to a brand, believed to not be offered by competitive brands (e.g. iOS for iPhones)

Question 12

POD criteria

Answer 12

• desirable
• deliverable
• differentiating

Question 13

points of parity (POPs)

Answer 13

attributes/benefits that are not necessarily unique to the brand and may be shared with other brands; not having these would be a significant disadvantage (e.g. points for premium credit cards)

Question 14

types of POPs

Answer 14

• category
• correlational
• competitive

Question 15

category POP

Answer 15

essential to a legitimate and credible offering in a certain category; necessary, but not sufficient, conditions for brand choice

Question 16

correlational POP

Answer 16

potentially negative associations that arise from the existence of certain positive associations (e.g. low price means low quality)

Question 17

competitive POP

Answer 17

associations designed to overcome perceived weaknesses of the brand in light of competitors’ PODs (e.g. McDonald’s introducing salads and grilled chicken sandwiches in response to wave of health-consciousness)

Question 18

straddle positioning

Answer 18

utilizing two frames of reference with one set of POPs and PODs (e.g. BMW being both luxurious and sporty)

Question 19

perceptual map

Answer 19

visual representation of consumer perceptions and preferences, e.g. price vs performance (generally has x- and y-axis); can be used to reveal gaps in the market

Question 20

competitive advantage

Answer 20

the ability to perform in one or more ways that competitors cannot or will not match; must be leverageable as advantages are not perpetually sustainable

Question 21

3 core strategies to create a sustainable advantage

Answer 21

• differentiate on an existing attribute (e.g. iOS)
• introduce a new attribute (innovation)
• build a strong brand (e.g. Snap-On)

Question 22

positioning statement

Answer 22

communicates an offering’s category membership, POPs, and PODs; develops a narrative to convey the offering’s positioning; can be used internally to guide employee words and actions

Question 23

attributes vs benefits

Answer 23

attributes describe the offering (e.g. features, etc.); benefits are delivered by said attributes; e.g. a thermos has the attribute of being thermally insulated, and delivers the benefit of keeping your coffee hot for longer

Question 24

narrative branding

Answer 24

positioning a brand by telling a story
- setting
- cast (the brand is a character)
- narrative arc
- language

Question 25

primal branding

Answer 25

brands are perceived as complex belief systems