product, Service and Industrial marketing Final

8/10/2019 product, Service and Industrial marketing Final

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POP and POD

Definitions for points-of-difference (POD) and points-of-parity (POP)

Points-of-difference (POD) and points-of-parity (POP) are essentially opposite in nature, with the

first referring to differences in the second referring to similarities. As a result, we can the followingdefinitions for our purposes as students of marketing:

When deciding upon a brands/productspositioningin the marketplace, the organization must

ensure that end positioning has both sufficient points-of-parity (POP) and points-of-difference

(POD). What this means is that you want the brand/product to be consider equal/similar (on par

with, hence the word parity) with the major offerings in the category for the key attributes (POP),

but the brand/product also needs to have a number of unique or differentiated attributes (POD).

An appropriate balance is required for market success. Too much reliance on points-of-parity in the

products positioning and it could be perceived as a me-too product offering. And too little

emphasis on points-of-parity and the product might be perceived as not meeting the core needs forthe target market.

Points-of-difference (POD)

The aspects of the product offering that are relatively distinct to the offerings of like

competitors.

Points-of-parity (POP)

The aspects of the product offering that are largely similar to the offerings of like

competitors.

You will note that both definitions referred to the offerings of competitors, so these terms are

relative measures. And to clarify the word aspects; it refers to the various product features,

benefits, brand equity, and other marketing mix elements (including price and place, plus any

associated marketing mix elements of services).

Understanding PODs and POPs

Typically, a firm decides the positioning of a product when it is either: entering a newtarget market

for the first time or launching a new product into an existing target market. In either case, the

product will usually need to win market share from established competitors (which is referred to as

selective demand).

For the product to win market share, it requires existing consumers in the marketplace to change

their purchasing behavior. That means that customers who currently buy a competitive product will

need to trial the new offering and/or current non-consumers need to be activated to purchase in the

product category for the first time (which is primary demand).

To achieve this goal of changing established purchasing behavior, the firm has both meet the core

need of product, as well as bring something new to the marketplace. The following diagram

demonstrates this in visual terms. As you can see, the large circle in the middle of the diagram
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represents the core needs of the market (points-of-parity) and the smaller circles represent new

features or benefits (points-of-difference).

Therefore, the positioning of any new entrant needs to have many points-of-parity (that is, it must

be seen to offer a relatively similar solution), but it needs to have something unique or different

about it (points-of- difference). (For more information, please refer to the example section below.)

The PODPOP Trade Off

One of the challenges for a firm launching a new product offering is to the extent that they

differentiate the product. As outlined in the positioning section of this marketing study guide, one of

the purposes of positioning is to simplify the offering in the minds of the consumer.

As we know, marketing communication is a very competitive world and it is difficult to communicate

many messages about a product, particularly low-involvement one. Therefore, as it is necessary to

simplify the message, firms need be careful about overindulging in points of difference.

As shown in the following diagram, there is a distinct trade-off between the ability of the firm to

communicate points-of-parity and points-of-difference. This is because consumers are likely to onlyremember a few elements about the product. .Ideally, an organization would like to communicate

everything about all of their products, but that is just not practical given the interests of the

consumer and the vast array of marketing messages being sent out.

Therefore, firms need to strike an appropriate balance and to position the product within the

product category as having sufficient points-of-parity, while highlighting one or two points-of-

difference.

The assessment of consumer desirability criteria for PODs should be against:

Relevance

Distinctiveness


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Deliverability

Whilst when assessing the deliverability criteria for PODs look at their:

Feasibility

Communicability Sustainability

These will help understand how successful these PODs are likely to be in the minds of the consumer.

Unique Selling Proposition (USP)

The concept of a unique selling proposition (USP) has become quite popular in terminology in recent

years. Essentially what this refers to is points-of-difference and you can use the terms

interchangeably if required. A point-of-difference is basically what is different about the firms

product, as compared to most competitive offers. The same meaning is applied to the term unique

selling proposition; that is, what is unique (that is, different) about the firms offer.

What to emphasize POD or POP?

Continuing on from the discussion on the previous section, while firms do need to balance their

emphasis between points-of-parity (POP) and points-of-differentiation (POD) there are occasions

when a firm should more heavily emphasize one of these elements. The following table outlines the

circumstances when a greater emphasis is required.

Situation What to emphasize

When the firm is a me-too In this case, being a weaker competitor, the goal is to piggybackon the success of the market leader by highlighting many points-
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competitor of-parity

When the firm as a market leader This is the reverse situation from the one above. To maintain

market leadership, the brand/product needs to be seen in as

superior/different in key ways, thus highlighting the need to

focus on relevant points-of-difference

When the firm enters an

established and mature market

In this case, the likelihood of switching is relatively lower, so

points-of-difference are required to break their habitual loyalty

When the firm and is a fast-

growing market

Fast-growing markets have primary demand (that is, first-time

customers to the market), therefore points-of-parity positioning

will should be quite successful in capturing new customers

When there is a diversity of needs,

even when looking at fairly narrowmarket segments

When there is significant diversity of consumer needs, a points-

of-differencepositioning should ensure that reasonable marketshare is generated

In a target market where the firm

already offers multiple products

To reduce the risk of cannibalization of sales, the firm would

need to have more emphasis on points-of-difference

In a relatively price sensitive

market

Our goal in this case would be to provide additional benefits, in

order to reduce the importance of price in the decision.

Therefore, a points-of-difference positioning emphasis would be

required

Kevin KellerandAlice Tybout[1]

note there are three types of difference: brand performance

associations; brand imagery associations; and consumer insight associations. The last only comes

into play when the others are at parity. Insight alone is a weak point of difference, easily copied.

Putting these together, check their desirability, deliverability and eliminate contradictions.

Traditionally, the people responsible for positioning brands have concentrated on the differences

that set each brand apart from the competition. But emphasizing differences isn't enough to sustain

a brand against competitors. Managers should also consider the frame of reference within which the

brand works and the features the brand shares with other products.

Points of Parity Association

POPs come in four basic forms

Category related

Benefit related

Usage Occasion and Time of Use

Price / Quality by Usage Occasion and Time of Use

Category Related
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Tanishqwatches sold as jewellery

Vaselinepetroleum jelly sold as lip salve and moisturizer

Sugar free.historically sold to diabetics through chemist outlets, now being sold as weight

control device, targeted at the figure conscious being sold through supermarkets

Benefit related

a) Functional

Lifebuoy (kills the germs you cannot see)

Pepsodent (12 hr protection against germs)

Fevicol (jod jo tootega nahin)

M-Seal (seals all leaks)

b) Emotional

Close-Up (confident)

Franklin Templeton Blue Chip (secure)

Liril (fresh)

J&J (caring)

Axe (irresistible)

By Usage Occasion and Time of Use

Kwality Walls.(post dinner treat.10 oclock)

Listerine (Night time rinse.Get fresh tonight)

Clorets (after drinking, smoking, eating.after anything)

Nescafe (great start to the morning)

Britanias Chai Biscoot (for tea times)

Dominos (when families are having fun, e.g. watching TV or playing scrabble

Price-Quality by Usage Occasion and Time of Use

Peter England (the honest shirt)

Big Bazaar

Westside (surprisingly affordable)

Indian Airlines (Apex fares)

Nirma

PODs are Strong, Favourable, Unique brand associations for a brand. They may

be based on virtually any type of attribute or benefit association.

Brand Differentiating Parameter

Gillette Double Edged Blade

Why me ?

Points of Difference Associations


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Dove Soap One Fourth Moisturiser

Orchid Hotels EcoFriendly Hotel

Ariel Detergent Performance

Ceat Tyres Tough

Maruti Service After Sales Service

Maggi Food in two minutes McDonalds Burgers that taste the same

Saffola 98% Fat free

Asian Paints Computerized Shade Cards

ICICI Bank First Internet Banking Service

Scotch Brite Scrub with Sponge & Coir


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NEW

PRODUCT DEVELOPMENT (NPD)

Introduction

Improving and updating products is an ongoing task as consumer needs and wants continuously

change. A failure to develop products could result in a reduction in sales if consumers decide to buy

competitor products. The eight stages of new product development are described below.

Stage 1: Idea Generation

New product ideas have to come from somewhere. But where do organisations get their ideas for

NPD? Sources include:


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Market Research

Employees

Consultants

Competitors

CustomersDistributors and Suppliers

Stage 2: Idea Screening

This process involves shifting through the ideas generated above and selecting ones which are

feasible and practical to develop. Pursing impractical ideas is expensive and a waste of resources.

Stage 3: Concept Development and Testing

The organisation may have come across what they believe to be a feasible idea, however, the idea

needs to be taken to the target audience. What do they think about the idea? Will it offer thebenefit that the organisation hopes it will? or have they overlooked certain issues? Will there be a

demand for the product? Note the idea taken to the target audience is not a working prototype at

this stage, it is just a concept.

Stage 4: Marketing Strategy and Development

How will the product/service idea be launched within the market? A proposed marketing strategy

will be written laying out the marketing mix strategy of the product, the segmentation, targeting and

positioning strategy and expected sales and profits.

Stage 5: Business Analysis

The company has a great idea, the marketing strategy seems feasible, but will the product be

financially worth while in the long run? The business analysis stage looks more deeply into

theCashflowthe product could generate, what the cost will be, how much market shares the

product may achieve and the expected life of the product.

Stage 6: Product Development

At this stage the prototype is produced. The prototype will undergo a serious tests, and will be

presented to a selection of people made up of the the target marketsegmentto see if changes need

to be made.

Stage 7: Test Marketing

Test marketing means testing the product within a specific geographic area. The product will be

launched within a particular region so the marketing mix strategy can be monitored and if needed

modified before national launch.

Stage 8: Commercialisation

If test marketing is successful the product is ready for national launch. The following decisions

regarding the national launch need to be made
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timing of the launch

how the product will be launched

where the product will be launched

will there be a national roll out or will it be region by region?

Conclusion

The eight stages of product development may seem like a long process but they are designed to save

wasted time and resources. New product development ideas and prototypes are tested to ensure

that the new product will meet target market needs and wants. There is a test launch during the test

marketing stage as a full market launch is expensive. Finally the commercialization stage is carefully

planned to maximize product success, a poor launch will affect product sales and could even affect

the reputation and image of the new product.

Q) What do you think of Young & Rubicams Brand asset Valuator? What do you see as its main

advantages and disadvantages?

Ans) The Brand Asset Valuator(BAV) is a database of consumer perception of brands created and managed

by Brand Asset Consulting, a division of Young & Rubicam Brands to provide information to enable firms to

improve the marketing decision-making process and to manage brands better. Brand Asset Valuator and

BAV also describe the Y&R group managing the database.

BAV provides comparative measures of the equity value of thousands of brands across hundreds of different

categories, as well as a set of strategic brand management tools for planning brand extensions, joint

branding ventures, and other strategies designed to maintain and grow brand value. BAV has now been

linked to a unique set of financial analytics, which allows determining a brands contribution to a companys

intangible value.

There are four key components of brand health in BAVthe four pillars. Each pillar is derived from various

measures that relate to different aspects of consumers brand perceptions and that together trace the

progression of a brands development. These four components for determining brand value are

1. Differentiation:-

Differentiation is the ability for a brand to be distinguished from its

competitors. A brand should be as unique a possible. Brand health is

built, and maintained by offering a set of differentiating promises to

consumers. And by delivering those promises to leverage value.

2. Relevance:-

Relevance is the actual and perceived importance of the brand to alarge consumer market segment. This gauges the personal


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appropriateness of a brand to consumers and is strongly tied to household penetration (the percentage

of households that purchase the brand).

3. Esteem:-

Esteem is the perceived quality and consumer perceptions about the growing or declining popularity of a

brand. Does the brand keep its promises? The consumers response to a marketers brand building

activity is driven by his perception of two factors: quality and popularity. Both vary by country and

culture.

4. Knowledge:-

Knowledge is the extent of the consumers awareness of the brand and understanding its identity. The

awareness levels about the brand, and what it means, shows the intimacy that consumers share with the

brand. True knowledge of the brand comes through building of the brand.

How Brands Are Built

Four Primary Aspects


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Brand Strength

Differentiation and relevance taken together say a lot about a Brands strength (brand vitality).These two

pillars point to the brands future value, rather than just reflecting its past .

When Differentiation is greater than Relevance, the brand has room to grow. This is a healthy

pattern.

When Relevance is significantly greater than Differentiation, the brand has become commoditized.

Its Uniqueness has faded and price has become the primary reason to buy. This is an unhealthy

pattern.


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Brand Stature

Esteem and knowledge together create Brand stature, which is a report card on a brands past

performance and which determines the current power of the brand.

When Esteem is greater than Knowledge, and the consumer says, Id like to get to know you

better. Consumers have motivation to find out more about your brand. This is a healthy patternfor the brand.

When Knowledge is greater than Esteem, consumers are saying, I know you more than I like you.

The brand has become too familiar and consumers have no motivation to listen to you. Too much

Knowledge has become a dangerous thing.

Mapping a Brands Life: the Power Grid


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BAV uses a two-dimensional plot to

measure Brand Strength and Brand

Stature.

The strength is measured on the

vertical y-axis *Differentiation,

Relevance] and stature is measured on

the horizontal x-axis *Esteem,

Knowledge].

The Power Grid provides a model for

mapping and diagnosing the life of a

brand. New brands begin in the lower

left quadrantwith low strength, low

stature.As the brand develops, it risesto the upper left quadrant where

strength is significantly higher than

stature. It is here where niche brands

and brands with unrealized potential reside. This is high margin territory.In order to maximize shareholder

value, brands should be strategically leveraged to move to the upper right quadrant, where powerful

leadership brands reside. When brands get into trouble, the first thing to erode is Differentiation, causing

leadership brands to decline. This loss in Differentiation reduces the ability to extend the brand across new

consumer and market segments. As a result, there is a huge loss in intangible value.

Advantages of Young & Rubicams Brand Asset Valuator

Brand Asset Valuator is an important tool to assess a brands current achievements and stature. It is

even more powerful when the future potential of a brand can also be measured. Y&Rs Brand Asset

Valuator offers this opportunity.

Combining exhaustive amounts of consumer data with a proven model of brand-building, Brand Asset

Valuator anticipates future operating earnings and operating margins. This can enhance the

marketing-decision processin a variety of substantive ways.

Brand Asset Valuator can help managers understand marketplace opportunities and the types of risk

that go with them. It can provide a deeper understanding of consumer behavior: for example, sheddinglight on reasons why some segments are willing to pay a higher price for a highly differentiated brand.

Brand Asset Valuator stands apart from other brand study aids in a number of ways. It is predictive,

focusing on leading indicators instead of lagging. It is exhaustive in every way, size and scope. Most

importantly, it evaluates a brand in the entire world of brands, not in its category.

Brand Asset Valuator also helps to determine a brands elasticity and helps to explore beneficiary

brand alliances.

Lastly, Brand Asset Valuator is not only just useful for creating brands. It is useful for managing brands

in the long termthrough ups and downs.

Disadvantages of Young & Rubicams Brand asset Valuator


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The major disadvantage associated with Young & Rubicams Brand asset Valuator is that it is

proprietary in nature and can be employed only by Young and Rubicam.

Another disadvantage associated with BAV is that the measures underlying the four factors may not be

relevant across a wide range of product categories and thus these factors tend to be abstract in nature

and might not be related directly to product attributes or benefits and more specific marketing

concerns.

Nevertheless, the BAV model represents a landmark study in terms of marketers ability to better

understand what drives top brands and where their brands fit in with other brands.


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FCB GRID

QUADRANT ONE

he FCB grid was developed by Richard Vaughn, a Senior Vice President of Foote, Cone and

Belding Advertising. It helps direct advertisings creative strategy and media strategy as it clarifies

how consumers approach the buying process for different products. Notice that the process is

driven by the TYPE OF PRODUCT, so product analysis is our first step understanding advertising

and its part in the 4P's and the C model, the C model includes Consumer, Cost, Convenience and

Communications.

roducts in Quadrant One of the FCB Grid are products that are of high importance to the

buyer (generally more expensive) and are decided on rationally. Generally, the buyer will research

competing products and will want lots of information before making a buying decision.


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ASSIGNMENT

Using the web, find another well-designed page for a product that belongs in Quadrant One. Does it

provide all the information you want. How could this page be improved? (Make sure you record the

product and the WEB address to share with the class.)

FCB GRID

QUADRANT TWO

roducts in Quadrant Two of the FCB Grid are high involvement (expensive and animportant decision) but are more emotional in the decision making process. You buy designer

clothes because they will make you feel good about the way you look and feel or to show your

status--all emotional responses. Other examples would be engagement rings, Nike Galaxy

sneaker, fine perfumes or it could be a car (normally in Quadrant One) if it was a sporty red

convertible that you bought to make you feel young or sexy. If your product is in Quadrant Two,

you need to generate emotional responses and create an image that people are willing to buy.

Assignment:

Go on the web and list 3 product ads that fall into Quadrant two and explain why.


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Identify product or service in the ad give details and explain why it conforms to Q2 advertising

strategy

FCB GRID

QUADRANT THREE

uadrant Three of the FCB Grid is for products that are lower involvement (not really a lot

to lose if you don't like the product) and rational decisions. Here we find many package goods,

such as detergents, paper products and other everyday items. Since these are rational decisions,

the consumer generally needs to be given a reason to buy (differentiate the product from others

and find market niches) and there is the need within the ad to generate brand loyalty and repeat

buying. Reminder ads and coupons or other sales promotion can help here. Even though this is a

rational decision, the lower importance means that consumers probably won't wade through long

copy print ads.

Assignment:

Go on line and find 4 product ads that conform to this mode of advertising appeal. List products and

give details from the ad that qualifies it to be classified under this quadran

FCB GRID

QUADRANT FOUR

uadrant Four of the FCB Grid is for products that are low involvement, emotional

decisions. These are items that aren't really very expensive and make you feel good or provide

self-satisfaction. Here, you would find entertainment, snack foods, fast foods, soft drinks, and

candy. Many times, these are impulse or convenience buys. Products in this catagory don't really


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have a lot of rational reasons for you to buy, and rely heavily on "feel good" ads. Many times,

lifestyles are portrayed to attach an image to the product (such as, if you are young, drink Pepsi.)

Brand Extension: Advantages and Disadvantages of Brand Extension

by Smriti ChandMarketing Mix

Brand Extension: Advantages and Disadvantages of Brand Extension!

Brand extension refers to the use of a successful brand name to launch a new or modified product in

the same broad market. A successful brand helps a company enter new product categories more

easily. For example, Fairy (owned by Unilever) was extended from a washing-up liquid brand to

become a washing powder brand too.

The Lucozade brand has undergone a very successful brand extension from childrens health drink toan energy drink and sports drink. Nikes brand core product is shoes, but it is now extended to sun-

glasses, soccer balls, basketballs, and golf equipments.

Advantages of Brand Extension:

Brand extension has the following advantages:

1. It makes acceptance of new products easy:

a. It increases brand image.

b. The risk perceived by the customers reduces.

c. The likelihood of gaining distribution and trial increases. An established brand name increases

consumers interest and willingness to try new products having the established brand name.

d. The efficiency of promotional expenditure increases. Advertising, selling and promotional costs

are reduced. There are economies of scale as advertising for core brand and its extension reinforces

each other.

e. Cost of developing new brands is saved.

f. Consumers can seek for a variety.
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g. There are packaging and labeling efficiencies.

h. The expense of introductory and follow-up marketing programmes is reduced.

2. There are feedback benefits to the parent brand and the organization:

a. The image of the parent brand is enhanced.

b. It revives the brand.

c. It allows subsequent extension.

d. Brand meaning is clarified.

e. It increases market coverage as it brings new customers into brand franchise.

f. Customers associate the original/core brand to new products; hence, they also have quality

associations.

Disadvantages of Brand Extension:

1. Brand extension in unrelated markets may lead to loss of reliability if a brand name is extended

too far. An organization must research the product categories in which the established brand name

will work.

2. There is a risk that the new product may generate implications that damage the image of the

core/original brand.

3. There are chances of less awareness and trial because the management may not provide enough

investment for the introduction of new products assuming that the spin-off effects from the original

brand name will compensate.

4. If the brand extensions have no advantage over competitive brands in the new category, then it

will fail.

product, Service and Industrial marketing Final

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