LEARNING OBJECTIVES
In this chapter we will address the following questions:
1. How can a firm develop and establish an effective positioning in the market?
2. How do marketers identify and analyze competition?
3. How are brands successfully differentiated?
4. What are the differences in positioning and branding with a small business?
SUMMARY
1. To develop an effective positioning, a company must study competitors as well as
2. Developing a positioning requires the determination of a frame of reference—by
3. A company’s closest competitors are those seeking to satisfy the same customers and
4. Points-of-difference are those associations unique to the brand that are also strongly
held and favorably evaluated by consumers. Points-of-parity are those associations not
5. The key to competitive advantage is relevant brand differentiation—consumers must
6. Emotional branding is becoming an important way to connect with customers and
create differentiation from competitors.
7. Although small businesses should adhere to many of the branding and positioning
C H A P T E R
10
CRAFTING THE BRAND
POSITIONING
OPENING THOUGHT
A barrier to effective learning that can be experienced by students in this chapter comes
from the concept of “positioning.” Students will be familiar with different products or
services, but having them realize what the products and services “positions are” within
their frame of references is challenging to verbalize. The instructor is encouraged to use a
number of examples of products or services familiar to the students to get this concept
fully across.
TEACHING STRATEGY AND CLASS ORGANIZATION
PROJECTS
1. At this point in the semester, student projects should be completed to include their
2. Relevant to the opening vignette of the chapter concerning The Public Broadcasting
Service’s positioning and differentiation, students are to devise a positioning and
differentiation strategy for their own local PBS system (radio or television). Students
3. Sonic PDA Marketing Plan: The third part of STP is to select and communicate an
effective positioning to differentiate your offering from competitors’ offerings. The
• Which of the differentiation variables related to product, services, personnel,
channels, and image are best suited for Sonic’s situation, strategy, and marketing
objectives? Why?
• Write the positioning statement for Sonic 1000.
• Knowing the stage of the product life cycle for Sonic 1000, what are the
implications for the marketing mix, product management strategy, service
strategy, and R&D strategy?
ASSIGNMENTS
Determining the proper competitive frame of reference requires understanding consumer
behavior and the consideration sets consumers use in making brand choices. For a set of
three products or services (selected by the students) students should research these
companies and provide the companies (and its products) value proposition in a matrix
similar to Table 10.1.
Points-of-differences and points-of-parity are two important concepts of brand
development and are driven by two differing strategies—inclusion and differentiation.
Students should devise a list of at least five other products/services that they believe
demonstrate points-of-differences and points-of-parity in their brand positioning. Student
must include their reasoning behind the inclusion of these products/services into a
category. Good students will present “proof” of their correct selection by including
advertising copy supporting the product or services POD or POP.
END–OF–CHAPTER SUPPORT
Marketing Debate—What Is the Best Way to Position?
Marketers have different views of how to position a brand. Some value structured
Take a position: The best way to position a brand is through a structured approach
versus the best way to position a brand is through an unstructured approach.
Suggested Answer: Student answers will vary but good students will cite as either for or
against this statement that companies must:
1) study competitors as well as actual and potential customers; optimal point of parity and
Marketing Discussion
Identify other negatively correlated attributes and benefits not described in the chapter
above. What strategies do firms use to try to position themselves on the basis of pairs of
attributes and benefits?
• Fun to drive and good gas mileage: for cars, this is an ongoing challenge along with safe
and good gas mileage and “large” and good gas mileage.
• Safe and scary—amusement rides, movies, television shows, books.
Marketing Excellence: LOUIS VUITTON
i
Questions:
1) How does an exclusive brand such as Louis Vuitton grow and stay fresh while
retaining its cachet?
Suggested Answer: Louis Vuitton can increase its emotional branding and its associated
2) Is the counterfeiting of Louis Vuitton always a negative? Are there any circumstances
where it can be seen as having some positive aspects?
Suggested Answer: No counterfeiting of LV products increases the brand’s emotional
Marketing Excellence: AMERICAN EXPRESS
1) Evaluate American Express in terms of its competitors. How well is it positioned? How has
it changed over time? In what segments of its business does American Express face the most
competition?
Suggested Answer: AE is considered a “prestige product” targeting the higher income and
3) Evaluate American Express’ integration of its various businesses. What recommendations
would you make in order to maximize the contribution to equity of all its businesses’ units? At
the same time, is the corporate brand sufficiently coherent?
Suggested Answer: Student answers will vary but good students will note that AE has a strong
4) Discuss the company’s decision to grow beyond its core affluent consumer base. What
did this do for the company and the brand?
Suggested Answer: It risked the dilution of the brand’s core business user and the positioning
DETAILED CHAPTER OUTLINE
No company can win if its products and offerings resemble every other product and offering.
As part of the strategic brand management process, each offering must represent a compelling,
distinctive big idea in the mind of the target market.
DEVELOPING AND COMMUNICATING A POSITIONING STRATEGY
All marketing strategy is built on STP—Segmentation, Targeting, and Positioning.
A company discovers different needs and groups in the marketplace, targets those needs
and groups that it can satisfy in a superior way, and then positions its offering so that the
target market recognizes the company’s distinctive offering and image.
A) Positioning is the act of designing the company’s offering and image to occupy a
distinctive place in the mind of the target market.
D) A good positioning has a “foot in the present” and a “foot in the future.” It needs to be
somewhat aspirational so the brand has room to grow and improve.
Deciding on positioning requires determining a frame of reference by identifying target
markets and competition and identifying the ideal points-of–parity and points-of-difference
brand associations.
Determining a Competitive Frame of Reference
A) The competitive frame of reference defines which other brands a brand competes with
and therefore which brands should be the focus of competitive analysis.
Identifying Competitors
A) A good starting point in defining a competitive frame of reference for brand
positioning is to determine category membership – the products or sets of products
with which a brand competes and which function as close substitutes.
Analyzing Competitors
Chapter 2 described how to conduct a SWOT analysis that includes a competitive
analysis. A company needs to gather information about each competitor’s real and
perceived strengths and weaknesses.
A) Once the competitive frame of reference for positioning has been fixed by
Identifying Optimal Points-of-Difference and Points-of-Parity
Once marketers have fixed the competitive frame of reference for positioning by defining
Points-of-Difference (PODs)
Are attributes or benefits consumers strongly associate with a brand, positively evaluate, and
believe that they could not find the same extent with a competitive brand.
Three key criteria determine whether a brand association can truly function as a point-of-
difference—desirability, deliverability, and differentiability. Some key considerations
follow.
1. Desirable to consumer. Consumers must see the brand association as personally
relevant to them.
2. Deliverable by the company. The company must have the internal resources and
commitment to feasibly and profitably create and maintain the brand association
in the minds of consumers. The product design and marketing offering must
support the desired association.
Points-of-Parity
POPs on the other hand are attributes or benefits associations that are not necessarily
unique to the brand buy may in fact be shared with other brands.
A) These types of associations come in two basic forms: category and competitive.
1) Category points–of–parity are associations consumers view as essential to be a
legitimate and credible offering within a certain product or service category. They
represent necessary conditions but not necessarily sufficient for brand choice.
Points-of-Parity Versus Points-of-Difference
A) To achieve a point-of–parity on a particular attribute or benefit, a sufficient number of
consumers must believe that the brand is “good enough” on that dimension.
MULTIPLE FRAMES OF REFERENCE
It is not uncommon for a brand to identify more than one actual or potential competitive
frame of reference, if competition widens or the firm plans to expand into new categories.
There are two main options with multiple frames of reference.
1) One is to first develop the best possible positioning for each type or class of
competitors and then see whether there is a way to create one combined positioning
robust enough to effectively address them all.
categories.
Straddle Positioning
Occasionally a company will try to straddle two frames of reference.
A) BMW’s positioning of luxury and performance is an example.
Choosing POPs and PODs
A) Marketers typically focus on brand benefits in choosing the points-of–parity and
points-of-difference that make up their brand positioning.
Brand Mantras
To further focus the intent of the brand positioning and the way firms would like
consumers to think about the brand, it is often useful to define a brand mantra.
A) A brand mantra is an articulation of the heart and soul of the brand and is closely
related to other branding concepts like “brand essence” and “core brand promise.”
B) Brand mantras are short, three- to five-word phrases that capture the irrefutable
essence or spirit of the brand positioning.
Designing a Brand Mantra
Brand mantras are designed with internal purposes in mind. A brand slogan is an external
translation that attempts to creatively engage consumers.
Here are the three key criteria for a brand mantra.
1. Communicate: A good brand mantra should define the category (or categories) of
3. Inspire: Ideally, the brand mantra should also stake out ground that is personally
A) Brand mantras are typically designed to capture the brand’s points-of-difference, that
is, what is unique about the brand. Other aspects of the brand positioning—
especially the brand’s points-of-parity—may also be important and may need to be
reinforced in other ways.
B) For brands facing rapid growth, it is helpful to define the product or benefit space in
which the brand would like to compete, as Nike did with “athletic performance” and
Disney with “family entertainment.”
Establishing Brand Positioning
Once they have determined the brand positioning strategy, marketers should
communicate it to everyone in the organization so it guides their words and actions. One
helpful schematic to do so is a brand-positioning bullseye. Constructing a bullseye for the
Points–of-parity are driven by the needs of category membership (to create category POPs)
and the necessity of negating competitors’ PODs (to create competitive POPs).
Marketers must decide at which level(s) to anchor the brand’s points–of-differences.
A) At the lowest level are the brand’s attributes.
Marketing Memo: Constructing a Brand Positioning BULLSEYE
To communicate a company or brand positioning, marketing plans often include a
Communicating Category Membership
There are three main ways to convey a brand’s category membership:
1. Announcing category benefits. To reassure consumers that a brand will deliver on
the fundamental reason for using a category, marketers frequently use benefits to
announce category membership.
Communicating POPs and PODs
One common difficulty in creating a strong competitive brand positioning is that many of
the attributes or benefits that make up the points-of-parity and points-of-difference are
negatively correlated.
A) If consumers rate the brand highly on one particular attribute or benefit, they also
rate it poorly on another important attribute.
DIFFERENTIATION STRATEGIES
To build a strong brand and avoid the commodity trap, marketers must start with the
belief that you can differentiate anything. The obvious means of differentiation, and often
most compelling ones to consumers, relate to aspects of the product or service.
A) Competitive advantage is a company’s ability in one or more ways
B) Leverageable advantage is one that a company can use as a springboard to new
advantages.
Marketing Memo: How to derive fresh consumer insights to differentiate products and
services
Lists a series of questions that marketers can ask to help them identify new consumer-based
points of differentiation.
Means of Differentiation
The obvious means of differentiation, and often the ones most compelling to consumers,
relate to aspects of the product and service (reviewed in Chapters 12 and 13).
A) Employee differentiation. Companies can have better-trained employees who
provide superior customer service.
c. The third is innovativeness. Some suppliers create better information
systems, introduce bar coding and mixed pallets, and help the customer in
other ways.
Emotional Branding
Many marketing experts believe a brand positioning should have both rational and
emotional components. In other words, a good positioning should contain points-of-
difference and points-of-parity that appeal both to the head and to the heart.
Brand consultant Marc Gobe believes emotional brands share three specific traits:
1) strong people-focused corporate culture;
2) a distinctive communication style and philosophy, and
A) Brands that are lovemarks, according to Roberts, command both respect and love
and result from a brand’s ability to achieve mystery, sensuality, and intimacy.
1. Mystery draws together stories, metaphors, dreams, and symbols. Mystery adds
to the complexity of relationships and experiences because people are naturally
drawn to what they don’t know.
win intense loyalty as well as the small perfect gesture.
In general, the firm should monitor three variables when analyzing potential threats posed
by competitors:
1. Share of market—The competitor’s share of the target market.
buy the product.”
Companies that make steady gains in mind share and heart share will inevitably make
gains in market share and profitability.
Alternative Approaches to Positioning
The competitive brand positioning model we’ve reviewed in this chapter is a structured
Brand Narratives and Storytelling
Rather than outlining specific attributes or benefits, some marketing experts describe
positioning a brand as telling a narrative or story.
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Randall Ringer and Michael Thibodeau see narrative branding as based on deep
metaphors that connect to people’s memories, associations, and stories.
They identify five elements of narrative branding:
1) the brand story in terms of words and metaphors;
2) the consumer journey in terms of how consumers engage with the brand over time
and touch points where they come into contact with it;
5) the role/relationship the brand plays in the lives of consumers. Based on literary
convention and brand experience, they also offer the following framework for a brand
story:
• Setting: The time, place and context
• Cast: The brand as a character, including its role in the life of the audience, its
relationships and responsibilities, and its history or creation myth
He outlines seven assets that make up this belief system or primal code:
1. a creation story,
2. creed,
3. icon,
4. rituals,
Brand Journalism
When he was CMO at McDonald’s, Larry Light advocated an approach to brand
positioning that he called brand journalism. Just as editors and writers for newspapers and
Cultural Branding
Oxford University’s Douglas Holt believes for companies to build iconic, leadership
brands, they must assemble cultural knowledge, strategize according to cultural branding
principles, and hire and train cultural experts.
POSITIONING AND BRANDING A SMALL BUSINESS
Building brands for a small business is a challenge because these firms have limited
resources and budgets.
1) Creatively conduct low-cost marketing research. There are a variety of low-cost
2) Focus on building one or two strong brands based on one or two key associations.
3) Employ a well-integrated set of brand elements. Tactically, it is important for small
businesses to maximize the contribution of each of the three main sets of brand equity
drivers.
a) First, they should develop a distinctive, well-integrated set of brand elements
that enhances both brand awareness and brand image. Brand elements should be
memorable and meaningful, with as much creative potential as possible.
Innovative packaging can be a substitute for ad campaigns by capturing attention
at the point of purchase.