Unit 3 Positioning Flashcards
What is positioning
results when an organization follows deliberate strategies to design products with characteristics distinct from those of its competitors and then communicates these differences to the target customers
Positioning on today’s world
Some may suggest that positioning is an unworkable strategy
Others believe that firms should offer a more flexible marketing approach to customize messages to different segments
Positioning through brand linkages:
- Product category
- Customer segment
- Relevant purchase
Positioning methods
- Value - Quality or low price (ex. Walmart, Dollarama, etc.)
- Product attributes
- Benefits and symbolism- Emphasizes the benefits of the brand as well as the psychological meaning of the brand to consumers
- Competition - Position against a specific competitor / Position against an entire product classification
- Market leadership
Other positioning strategies
Central positioning strategy – appeals particularly to brands in a monopolistic or dominant position
Me-too / mimicking brand – creates a clone position (Delivers the same benefits as the market leader, Makes the benefits easy for the customer to determine objectively, Offers a product at a significantly lower price than the leader)
Edge strategy / differentiation strategy – create a new product category
Some link product to a segment (ex. Pepsi generation) or a customer benefit
Positioning steps
- Determine customers’ perceptions and evaluations in relation to competitors
- Identify competitor’s positions
- Determine consumer preferences
- Select the position
- Monitor the positioning strategy
Perception Map
Purpose: help visualize the way customers view offerings in a market
- Place competitors on a map: products, companies, offerings
- Position them along relevant dimensions (relevant to the customers)
- Short distance = fierce competition
Insights:
- Easy to read: graphical, 2D map, human beings are good with graphical representations, much better than with raw numbers
- Easy to communicate, to convince, to act: ah=ha factor
BUT:
- What if 2 dimensions are not enough
- What data to collect
- How to link these perceptions to preferences and market shares
Mapping Methods in Marketing: what are the mapping methods
- perceptual maps
- preference maps
- Joint space maps (combination of both
Multidimensional Scaling (MDS)
Multidimensional scaling (MDS) - methods to represent customer perceptions and preferences for a set of entities on a map or graph
MDS discusses:
1. Perceptual maps - derived from attributes based data
2. Preference maps - that rely on preference data (ranking by customers)
2. Joint-space maps – include both perceptions and preferences
Attribute based perceptual maps
steps:
1. Identify products and product attributes for evaluation – depend on the objective
2. Obtain perception data from questionnaires given to define target segments
3. Select a perceptual mapping method
4. Plot the resulting map
Pros and Cons:
+ Perceptual map takes numerical data and translate it into a visual form
- Perceptual maps cannot indicate which areas of the map are most desirable to target segments of customers (Doesn’t incorporate information about customer preferences)
How to incorporate preference information:
- Preference mapping: focuses on mapping preferences
- Joint-space mapping
Attributes for positioning analysis
Performance – levels at which the product’s primary characteristics
Durability – a measure of the product’s expected operating life
Reliability – a measure of the probability that a product will malfunction or fail within a specified time period
Serviceability – a measure of the ease of fixing a product that malfunctions or fails
Style – how well the product looks and feels to the customer
Product image – conveying the emotional aspects of the products (I.e. prestige or reputation associated to the product/company)
Delivery – how the product or service is delivered to the customer
Other services – availability warranty or services that add value to the customer’s purchase or use of the product
Service image – a number of attributes that contribute to the overall perception of the service (ex. Competence, friendliness, and courteousness of service employees)
Perceived quality – the degree to which the product meets customers’ expectations of what the product/service should be
Preference Maps
Preferences do not go according to magnitude of attribute; They cannot indicate which attributes should be changed to make a focal product appealing to target segment; Allows customers to choose among alternatives
examples:
- ideal point preference model
- vector preference model
Products located farther away from the ideal point are less desirable to the customer
Preference Maps
Incorporate both perceptions and preferences into the same map
Averaged ideal-point model
- Requires a hypothetical ideal brand that appears among the set of alternatives customers can rate
- Customers rate brands but also indicates what their ideal brand would fall
- Includes average perceptions of the ideal brand; he farther away an existing brand is from the ideal brand for the segment the less it would be preferred by customers
Averaged vector model
- Preference attribute appears in the set off attributes or if the market share of each brand is a surrogate for preference the associated vector in the resulting map indicates the direction of increasing preference
- The more it is preferred and others closely align with the preference attribute can be interpreted as drivers of or explanations for customer preferences
what is external analysis
External analysis – refers to a mapping method that assumes respondents who have common perceptions about a set of product alternatives also have differing preferences for those alternatives
The model overlays the preferences to create a perceptual map
However it normally derives from the same respondents and employs previously described attribute based approaches
Preference Map 3
- Starts with a vector based perceptual map that indicates the locations of the products
- Shows a preference vector or ideal brand
- Each respondent has provided a unique ideal point so the model places each customer in a perceptual map
- In addition, a joint-space map requires a data matrix – shows preference ratings for brands and respondents
