Delivering Value Through Market

DifferentiationThe Brand: The Customer’s

Perspective & The Marketer’s Response

Sourced from Articles about Brand BuildingKapeel Kapoor

Brand -An anchor for the customer in the Sea of Products

• As a variety of competitive claims assails her senses, today’s customer uses a complicated decision-making process to assess the alternatives available before making a purchase.

• The more clearly the brands associated with a particular set of attributes – in terms of benefits and prices – the quicker becomes her search process

Challenge for the MarketerCreate perceived value for the customer

• Instead of having to compare every variable about one product with another, she uses her personal rating of each competing brand to make comparisons

• Challenge for the marketer, is to use the tools of branding and pricing to ensure that the most valuable package – in the customer’s perception is represented by his brand

Creating DifferentiationCreate perceived value for the customer

• First marketer must position the brand in the customer’s mind in a distinctive slot – – far enough to be unique, and

– close enough to meaningful benefits

to provide unmatched value

• To fill the different value gaps that arise from the segmentation of the consumer base, he must build a portfolio of brands, using brand extensions to augment the core value

Managing Price-Value equationCreate perceived value for the customer

• Then must use price to create expectations of particular levels of value from his brand – and exceed those expectations

• While premium pricing will create one kind of price-value equation, competitive pricing will create another

• Successful marketer must manipulate both equations to his advantage

Aware-ness

of Need

Exposureto Brand

Under-standing of Asso-ciations

Under-standing of Price

Comparison with other

Brands

Under-standing

ofDistinctive-

ness

Judge-ment ofValue

BrandBenefits

BrandAttributes

BrandProperties

Time-Stability

ofEval-

uation

Confidenceof

Evaluation

IntensityOf like/Dislike

Action

Create Brand Associations

Add value throughNeutral Pricing

Add value throughDifferential Pricing

Extend the Brand Portfolio

The Brand: The Customer’s Perspective & The Marketer’s

Response

Adding Value Through

Positioning

The third strategic ‘P’ Positioning

Challenges• Differentiate your brand from competitors• Occupy a distinct space in the customer’s

perceptions of all brands in your product category• Use that space to convey every one of the

associations attached to your brand • Through it all add customer value

ConstructCutomer’sMind map

Plot PositioningOf Brands

OnMindmap

IdentifyGaps onThe Map

ExtendExisting

Valuedimension

Create new Value

dimension

Locate SpotsRepresenting

Ideal valuecombinations

PositionBrandIn Gap

How to Add Value Through Positioning

Do TheyRepresent

Value

Is theDimensionrelevant?

No Yes No Yes

EnsureIncrease

InCustomer

value

Positioning Creating the Mindmap

Step I• Constructing a visual map of the customer’s mind• Mindmap – A flat space divided inot four quadrants by two

axes, each of which represents the continuum of a particular brand attribute – such as expensive/ cheap; caring/ efficient; serious/ frivolous

• On this mind map – each spot represents a unique combination of attributes represented by the 2 axis

e.g. Britannia 50-50 captures the pleasures of contrasts. “It’s youthful and full of surprises”

Step I (Continued)• Existing brands tend to be clustered around

particular spots, which represent idea value-points for the customer

• Lines connecting the intersection of the 2 axes to each of these value points represents the vectors, along which brands tend to be grouped

• The perceptual map summarises the image of the customer’s mind

The Perceptual MapIdea Value Points

Step I (Continued)• At a fundamental level, the mere positioning of a

brand at a distinct point – ther further away from the competing brands the better- differentiates it

• Occupying unrealistic positions – e.g. absurdly high or low price points, can’t be translated into action nor can be a source of value

• One can innovate within and with –this framework, to get a unique value position

Positioning Getting a Unique Value Position

Step II (Continued)• When every value-spot on the mind map is

occupied, how can a new entrant use positioning as a source of added customer value?– By creating a new vector

e.g. Stanchart enteered the credit cards market

Value points on the MindmapChanging the assumptions

The Credit Card Market• Every existing price-pint was occupied with each incumbent

offering a clear value in exchange• On the scale of credit limit, one end occupied by charge cards

directed at travel and leisure customers, e.g. Diner’s and American Express

• Customers who wanted to shop on credit served by Citibank, ANZ Grindlay’s…etc.

• For the Price-exclusivity map, premium cards from AmEx and all the foreign baks – crowded the top

• Popular cards from both foreign and Indian Nationalised Banks offered plenty of choice at entry-level

Creating new vectors on the Mindmap The Stanchart Example

The Credit Card Market (Continued)..• Instead of trying to distance itself on the price –benefit

matrix on these existing scales, Stanchart created a new pricing scale altogether

• The trade off was between price and status• The low cost classic cards (100-700/- per year) offered only

the primary benefits –Credit, cash withdrawal, teledraft, add-on cards, insurance – but offered little to make their owners feel exalted

• Premium or Gold cards (1800/- -2000/- annually) with a slew of frills led to status enhancement

Creating new vectors on the Mindmap The Stanchart Example

Break the assumption of the trade-off between price and benefits

• Offered as many benefits as premium products, but at a lower price level

• Created a new slot –The Executive Class – effectively created a third ideal vector within the customer’s mind-map of existing credit cards

• Provided incremental value while differentiating from the competitors

Stanchart Positioning PloyThe Executive Class

Step II • It pays to create a brand new axis bordering the customer’s

mind-map• If so far, her perception of brands in your product category

defined by axes like, price and exclusivity or functionality and emotional satisfaction- try establishing new dimension along which the brands’ positions can be checked

In pioneering it your could immediately achieve not just the differentiation that positioning must provide, but also the value slot that you’ve been looking for

Entering a product category or repositioning an existing brand by

Creating New Reference Frames

Step II • It pays to create a brand new axis bordering the customer’s

mind-map If so far, her perception of brands in your product category defined by axes like, price and exclusivity or functionality and emotional satisfaction- try establishing new dimension along which the brands’ positions can be checked

• In pioneering it your could immediately achieve not just the differentiation that positioning must provide, but also the value slot that you’ve been looking for

e.g. United Distillary (Black & White Scotch) created a new axis “Fun” (Informality-Formality) rather than utilising the existing axis of price and tradition/ modernity

Entering a product category or repositioning an existing brand by

Creating New Reference Frames

• United Distillary (Black & White Scotch) created a new axis “Fun” (Informality-Formality) rather than utilising the existing axis of price and tradition/ modernity

• Not only distanced it from other brands clustered at the high formality end, but immediately clarified the value proposition in the customer’s perception

Entering a product category or repositioning an existing brand by

United Distillary Example

• First - must enable the customer to place the competing brands on it too – as far away from you as possible Or else thre would be no perception of qualitatively different value for the customer

• Second – the new axis must represent a quality that is a relevant source of value to the customer Thus a wine with slightest smell may be different from other brands but won’t add any customer value

The Two Things The

Mind Map Axis must do

• Why not try to extend the existing axes, climbing up on both the scales used to define the customer’s perception space about your product category

• That way, both differention and added customer value will be yours 220 crore DHL achieved this with its special service, branded “Jumbo Box” stretching out from its core documents and small parcel delivery business

On the existing mind-map

Extending The Axis

• Customer’s mind-map consisted of several commercial airlines services offering air-freight, all clustered around a particular price-convenience combination

• Combination represented sufficient value for customers not in hurry about the delivery of shipments, yet segment of Exporters wanted quick delivery of their samples – too large to be couriered – to prospective customers abroad. (wanted more value)

On the existing mind-map

Extending The Axis

• Speed was crucial to customer, DHL sensed opportunity to extend the convenience axis on mind map

• Also enlarged the price axis Knowing that the extra value would justify a price premium

• Then Positioned ‘Jumbo Box’ –enabling packages of upto 25 kg to be delivered virtually as fast as small parcels are through couriers on a higher convenience –higher price-point

• Also reinforced its value positioning - By charging a flat price which even worked out lower than airfreight in some cases

On the existing mind-map

Extending The Axis

The Diagnostic

Are you checking the customer’s perception of your brand ?

Are you trying to create a unique set of Associations for your brand ?

Are you checking whether herPerception matches your intention ?

Does your positioning provide distinctive Value to the customer?

Are you monitoring encroachment on Your positioning by your competition ?

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

• The Strategy: DHL positioned its Jumbo pack as a combination of air-freight and courier deliver

• The lesson: Import Attributes from Other Product categories

• The Strategy: United Distillers associated Black & White Scotch whisky with Fun

• The Lesson: Position your Brand along unexpected dimensions

The Lessons

• The Strategy: Stanchart Positioned its executive card as a premium product at a popular price

• The Lesson: Create New Price-Value Combinations to occupy a unique position

• The Strategy: Asian Paints positioned its Utsav brand on an emotional, not functional platform

• The Lesson: Establish relationships with several additional benefits

The Lessons