Week 3: Chapter 4 Flashcards
what is the positioning of a company
- what company you think of when you think of something
- ex. safe car = volvo
what does the positioning of a company depend on
- the perceptions of the customers
- ex. starbucks -> they want to have positioning of high quality coffee but who do consumers think?
what is positioning
- the place the product occupies in consumers minds relative to competing products
- typically defined by consumers on the basis of important attributes
- based on strategies companies have done to make them different from their competitors then communicating them to their targeted customers
what is the difference between differentiation and positioning
- differentiation is what you are offering that is different (what makes the product better)
- positioning is what image you are trying to create in the minds of customers (ex. from good marketing, or a good price point)
what is differentiation (proper definition)
creating tangible or intangible differences on one or more attributes between a focal offering and its main competitors
what is positioning (proper definition)
- a set of strategies a firm develops to differentiate its offering in the minds of its target customers
- successfully positioning will result in the offering occupying a distinct, important, and sustainable position in the minds of the target customers
what are the different positioning methods
- value
- product attributes
- benefits and symbolism
- competition
- market leadership
what is the value method
the price point based on the quality
what is the product attributes method
- performance
- reliability
- innovative
- good quality
what is the benefits and symbolism method
- what it represents to you
- functional -> what it can do for you
- emotional
- social -> fit in if you have the good (certain status)
- emphasizes the benefits of the brand and the psychological meaning of the brand to the consumers
- hopefully the positioning is what the brand wants to have
what is the competition method
- how do they differentiate
- position against specific competitor -> demonstrate how you can offer the same or better product
- position against an entire product classification -> harder to do
what is the market leadership method
when you want to be a market leader
what are the positioning steps
- determine consumers’ perceptions and evaluations in relation to competitors’
- identify competitors’ positions
- determine consumer preferences
- select the position
- monitor the positioning strategy
how can you determine consumers’ perceptions and evaluations in relation to competitors’
through a survey
how can you identify competitors’ positions
determine gaps where you can fill
how can you determine consumer preferences
- determine what consumer value
- ex. comparing quality and price -> which do they care more about
how can you select the position
needs to be unique and advantageous
how can you monitor the positioning strategy
get market feedback
what does a simple positioning map look like
+
where the the range for one option is on up and down, and the range for the other option is on right and left
if there was a simple positioning map with fruits on it, and the top was tasty, bottom was untasty, and left was difficult to eat, and right was easy, what does it do for the fruits?
generalizes preferences of if they are tasty or not (subjective)
for the fruits in the top left corner, that are considered difficult, what do grocery stores due to alleviate that “pain”
they prepare the fruits for you (cut) so more people would buy it
what does a simple positioning map do
- places “competitiors” on a map: products, companies, offerings
- they are positioned along relevant dimensions (relevant to the customers)
- when there is short distances, it means there is fierce competition
- usually top right are the best qualities, so competition is really fierce if all of the stuff on the map were clustered in that quadrant
how is a simple positioning map a simple tool with powerful insights
- they are easy to read and analyze: graphical, 2D map, human beings are good with graphical representations (better than with raw numbers)
- easy to communicate, to convince, to act
if there was a chocolate brands positioning map where its high quality, high price, low quality, low price, how would you explain it
- the chocolates follow a pretty linear line
- where if they are low quality, they generally have a low price
- when they have high quality, they have high price
- those in the high quality section are able to charge high prices (justified)
- need to make sure the positioning of the chocolates actually matches the quality and the prices can back it up
what are some questions to ask about simple positioning map
- what if you want more than 2 dimensions? (since 2 dimensions can be oversimplifying and more than 2 dimensions can be important)
- what data to collect? is it hard to do?
- how to link the perceptions to preferences and market shares? (what do customers actually want -> impacts things a company does)
what are some issues to consider when think about positioning
- what are the central dimensions that underlie customers’ perceptions of brands in the product class?
- how do customers view our brand on these dimensions?
- how do customers view our competitors?
- are there opportunities for new product introductions?
- how do perceptions relate to preferences?
- how can we improve our competitive position (market share) given the distribution of preferences in the market?
what are the different mapping methods in marketing
- perceptual maps
- preference maps
- joint space maps (includes both perception and preference in the same map)
what are the different perceptual maps
- similarity-based methods
- attribute-based methods
what are the different preference maps
- ideal point model (unfolding model)
- vector model
what are the different joint space maps
- averaged ideal point model
- averaged vector model
what is the averaged ideal point model
generating an average ideal-point requires a hypothetical ideal brand and it includes averaged perceptions of the ideal brand
what is the averaged vector model
- the associated vector shows the direction of increasing preference
- further the product is along its vector, the more its preferred
what are attribute-based perceptual maps
perceptual maps derived from customer evaluations of competing products along pre-specified attributes
what are the different steps of making an attribute based perceptual map
- identify products and product attributes for evaluation
- obtain perception data from questionnaire given to define target segments
- select a perceptual mapping method
- plot the resulting map -> determine if you can combine some of the data together assuming that customers have similar feels for products
what are the different attributes for positioning analysis (what we want to look at on the graph)
- performance
- durability
- reliability
- serviceability
- style
- product image
- delivery
- other services
- service image
- perceived quality
what is the performance attribute
refers to the levels at which the product’s primary characteristics operate
what is the durability attribute
a measure of the product’s expected operating life
what is the reliability attribute
a measure of the probability that a product will malfunction or fail within a specified time period
what is the serviceability attribute
a measure of the ease of fixing a product that malfunctions or fails
what is the style attribute
describes how well the product looks and feels to the customer
what is the product image attribute
- attributes that convey the emotional aspects of the product
- those that stir the heart and mind of the customer
- ex. prestige/reputation associated with a product/company, the perceived lifestyle of the people who use the product, etc.
what is the delivery attribute
- all aspects of how the product/service is delivered to the customer
- speed, accuracy, care attending the delivery process
what is the other services attribute
warranty, availability of “loaners” and services that add value to the customer’s purchase or use of the product
what is the service image attribute
- a number of attributes that contribute to the overall perception of the service
- like competence, friendliness, and courteousness of service employees, the perception of being pampered with personalized attention, etc.
what is the perceived quality attribute
the degree the product meets customers’ expectations of what the product/service should be
from the perceptual map, how can you tell when two points have direct competition
when they’re close together
from the perceptual map, how can you tell which points is the most attractive to customers
- you can’t
- depends on the preference of the customers
- where the companies land on the map also depends on the preference of customers
how do you plot perceptions of key attributes
- you have them rank each attribute from a range (1-9)
- create the cartesian plane with the axis’ having the same range as the survey
- then plot
what does it mean when brands are close together on the map
- they are close competitors
- customers have similar perceptions about those brands
- the brands compete on the same dimensions
- you determine which dimensions based on the attribute lines
what does it mean when the dimensions are at a very acute angle
highly correlated
what does it mean when the dimensions are at a an acute angle (around 60)
somewhat correlated
what does it mean when the dimensions are at a 90 degree angle
uncorrelated
what does it mean when the dimensions are at an obtuse angle
negatively correlated
what are preferences
- allow customers to choose among alternatives
- ex. all customers may perceive volvo as safe, but not all customers value safety equally
- preferences don’t always go according to the magnitude of the attribute
- they can’t indicate more appealing to the target segment
what is the ideal point preference model
- where the map represents distances from an ideal point
- the distance indicates the preference
- further from the ideal point = less preferred
what is the vector preference model
- product locations are projected onto a preference vector
- distances are measured along the preference vector
