Copyright 2009, Prentice-Hall, Inc.9-1 A Framework for Marketing Management Chapter 9 Crafting the...

Copyright 2009, Prentice-Hall, Inc. 9-1

A Framework forMarketing Management

Chapter 9Chapter 9Crafting the Brand Positioning and Dealing with Competition


Chapter Questions

How can a firm choose and communicate an effective positioning?

How are brands and offerings differentiated? How can a firm identify its primary

competitors and analyze their strategies, objectives, strengths, and weaknesses?

How can market leaders, challengers, followers, and nichers compete effectively?


Positioning

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

Result is the creation of a customer-focused value proposition: A cogent reason why the target market should

buy the product.


Competitive Frame of Reference Category membership—the products or

sets of products with which a brand competes and which function as close substitutes.

Need to understand consumer behavior and the consideration sets consumers use in making brand choices.


Points-of-Parity and Points-of-DifferencePoints-of-difference

(PODs) Attributes or benefits

that consumers strongly associate with a brand, positively evaluate, and believe they couldn’t find to the same extent with a competitive brand.

Points-of-parity (POPs) Associations that aren’t

necessarily unique to the brand but may in fact be shared with other brands. Category points-of-parity Competitive points-of-

parity


Establishing Category Membership Announcing category benefits Comparing to exemplars Relying on the product descriptor


Key Criteria for Points-of-DifferenceDesirability Criteria Relevance Distinctiveness Believability

Deliverability Criteria Feasibility Communicability Sustainability


Differentiation Strategies

Competitive advantage—a company’s ability to perform in one or more ways that competitors can’t or won’t match. Few are sustainable, but a leverageable

advantage can be used as a springboard to new advantages.

Focus on building competitive advantages as customer advantages.


Product Differentiation

Form Features Customization Performance quality Conformance quality

Durability Reliability Repairability Style Design


Service Differentiation

Ordering ease Delivery Installation Customer training Customer consulting Maintenance and repair Returns


Other Dimensions of Differentiation Personnel Channel Image


Five Forces that Determine Marketing Attractiveness Industry competitors Potential entrants Substitutes Buyers Suppliers


Threats Posed By These Forces Threat of intense segment rivalry. Threat of new entrants. Threat of substitute products. Threat of buyers’ growing bargaining power. Threat of suppliers’ growing bargaining

power.


Industry and Market Views of Competition Industry—a group of firms that offers a product or

class of products that are close substitutes for each other.

Classified by: Number of sellers Degree of product differentiation Presence or absence of entry, mobility, and exit barriers Cost structure Degree of vertical integration Degree of globalization


Analyzing Competitors

Strategies Objectives Strengths Weaknesses


Competitor Strengths and Weaknesses Share of market Share of mind Share of heart


Selecting Competitors

Strong vs. weak—most companies aim at weak competitors.

Close vs. distant—most companies compete with the rivals that resemble them the most.

“Good” vs. “bad”—good competitors play by industry rules, make realistic assumptions, set reasonable prices, and favor a healthy industry.


Competitive Strategies

Leader Challenger Follower Nicher


Market-Leader Strategies

Expanding the total market Defending market share Expanding market share


Market-Leader Strategy:Expanding the Total Market Market-penetration strategy New-market segment strategy Geographical-expansion strategy


Market-Leader Strategy:Defending Market Share Position defense Flank defense Preemptive defense Counteroffensive defense Mobile defense Contraction defense


Market-Leader Strategy:Expanding Market Share Factors to consider before pursuing:

The possibility of provoking antitrust action Economic cost Pursuing the wrong marketing activities The effect of increased market share on actual

and perceived quality


Other Competitive Strategies

Market-challenger strategies Market-follower strategies Market-nicher strategies


Market-Challenger Strategies Define the strategic objective and opponents. Decide who to attack:

Market leader Market equals that are underperforming Small local and regional firms


Attack Strategies

Frontal attack Flank attack Encirclement attack Bypass attack Guerilla warfare


Market-Follower Strategies

Counterfeiter Cloner Imitator Adapter


Specialized Niche Roles

End-user Vertical-level Customer-size Specific-customer Geographical Product or product-line

Product-feature Job-shop Quality-price Service Channel


Balancing Customer and Competitor OrientationsCompetitor-centered

company Looks at what

competitors are doing and then formulates competitive reactions.

Customer-centered company

Focuses more on customer developments in formulating its strategies.


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Copyright 2009, Prentice-Hall, Inc.9-1 A Framework for Marketing Management Chapter 9 Crafting the...

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