Marketing Chapter 10 Homework The Target Market Decision Helps Define Competitors

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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. How do firms communicate their positioning?

5. What are some alternative approaches to positioning?

6. What are the differences in positioning and branding for a small business?

SUMMARY

1. To develop an effective positioning, a company must study competitors as well as

2. Developing a positioning requires identifying a frame of reference—by locating the

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. These differences may be based directly

5. Points-of-parity are those associations not necessarily unique to the brand but perhaps

shared with other brands. They help to negate any potential weaknesses for the brand.

6. Emotional branding is becoming an important way to connect with customers and

7. Several different alternative approaches exist to position a product or service. These

C H A P T E R

CRAFTING THE BRAND

POSITIONING

8. Although small businesses should adhere to many of the branding and positioning

principles larger companies use, they must place extra emphasis on their brand

elements and secondary associations, be more focused, and create buzz for their brand.

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

should arrange to meet with local PBS management to elicit information on what

challenges their local station(s) is/are having in increasing their viewership/listeners.

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

marketer must also plan for appropriate marketing strategies for each stage of the

product life cycle. As you continue your work to develop Sonic’s marketing plan for

launching Sonic 1000, consider these questions about differentiation and life-cycle

strategies:

• 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?

ASSIGNMENTS

Most campus communities have their own radio and/or television broadcasting stations.

If one is present on your campus, students are to define the college or university’s

station(s) in terms of positioning and differentiation strategy. What stage in the product’s

life cycle are the station(s)? What can be done to reposition the station(s) to attract more

viewership? What is the competitive advantage present in their operations?

Consultants Michael Treacy and Fred Wiersema, in their book, The Disciplines of Market

Leaders (Reading, MA: Addison-Wesley, 1994) proposed a positioning framework called

value disciplines. Within its industry, a firm could aspire to be the product leader,

operationally excellent firm, or customer intimate firm. Choosing an industry, each

student is to identify one or more firms operating within that industry that fits each of

these three value disciplines. Students should define their reasoning for selecting each

firm and its placement as either the product leader, operationally excellent or customer

intimate.

Points-of-differences and points-of-parity are two important concepts of brand

development and are driven by two differing strategies—inclusion and differentiation.

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 points of differentiation; that points of differences are associations and are strongly

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.

• Choices and convenience: variety in our shopping but sized for convenience (has the right

mix of products but is not too big—convenience stores).

• Close but not too close—shopping centers and large mega–stores close enough but “not in

my backyard.”

Marketing Excellence: Louis Vuitton

Questions:

1) How does an exclusive brand such as Louis Vuitton grow and stay fresh while

retaining its cachet?

2) Is the counterfeiting of Louis Vuitton always a negative? Are there any circumstances

in which it could be seen as having some positive aspects?

Suggested Answer: Counterfeiting of LV products increases the brand’s emotional

Marketing Excellence: American Express

Questions:

1. Evaluate American Express in terms of its competitors. How has its positioning

changed over time? Where does American Express face the most competition?

2. Evaluate American Express’ integration of its various businesses. What recommendations

would you make in order to maximize the contribution to equity of all its business units? Is the

corporate brand sufficiently coherent?

Suggested Answer: Student answers will vary but good students will note that AE has a strong

DETAILED CHAPTER OUTLINE

Opening vignette: A company can benefit if it has a compelling, well-differentiated brand

position, but it can only uncover the most powerful brand positioning with awareness of

its capabilities, competition, and its consumers’ needs and wants.

I. Developing a Brand Positioning

A. Marketing strategy is built on segmentation, targeting, and positioning (STP)

B. Positioning is the act of designing a company’s offering and image to occupy

a distinctive place in the minds of the target market

i. Brand substitution test: if a brand were replaced by a competitive

C. Positioning requires that marketers define and communicate similarities and

differences between their brand and its competitors

i. Choose a frame of reference by identifying the target market and

relevant competition

ii. Identify the optimal points-of-parity and points-of-difference brand

associations given that frame of reference

iii. Create a brand mantra summarizing the positioning and essence of the

brand

II. Choosing a Competitive Frame of References

A. A competitive frame of reference defines which brands a brand competes with

—the focus of competitive analysis

B. The target market decision helps define competitors

2. Degree of product differentiation

4. Cost structure

6. Degree of globalization

iv. Competitors are companies that satisfy the same customer need

v. Marketing myopia is near sightedness/a narrow focus where you miss

substitutes

C. Map the buyer’s steps in obtaining and using a product to profile direct and

indirect competitors

i. Analyze competitors real and perceived strengths and weaknesses

D. Identify potential points-of-difference

i. Points of difference (PODs) are attributes attributes or benefits that

consumers strongly associate with a brand, positively evaluate, and

believe they could not find to the same extent with a competitive

brand.

ii. Strong brands often have multiple points-of-difference.

iii. Creating strong, favorable, and unique associations is a real challenge,

but an essential one for competitive brand positioning.

iv. Three criteria determine whether a brand association can truly function

as a point-of-difference: desirability, deliverability, and

differentiability.

1. Desirable to the consumer: personally relevant and there must

2. Deliverable by the company: The company must have the

internal resources and commitment to feasibly and profitably

3. Differentiating from competitors. Consumers must see the

brand association as distinctive and superior to relevant

competitors.

E. Identify Points-of-Parity (POPs)

i. Points-of-Parity are attribute or benefit associations that are not

1. Category points-of-parity are attributes or benefits that

consumers view as essential to a legitimate and credible

2. Correlational points-of-parity are potentially negative

3. Competitive points-of-parity are associations designed to

overcome perceived weaknesses of the brand in light of

competitors’ points-of-difference.

a. One good way to uncover key competitive points-of-

iii. Often, the key to positioning is not so much achieving a point-of-

difference as achieving points-of-parity

F. It is not uncommon for a brand to identify multiple frames of reference

i. Some POPs and PODs will be unique to one competitive frame of

reference; others might be shared

iii. If the competition is too diverse, it may be necessary to prioritize

competitors and then choose the most important set of competitors to

serve as the competitive frame

iv. Try to be all things to all people—that leads to lowest-common-

denominator positioning, which is typically ineffective.

v. It may be useful to either develop the positioning at the categorical

level for all relevant categories or with an exemplar from each

category

G. Straddle positioning: a company straddles two frames of reference with one

set of points-of-difference and points-of-parity

i. The points-of-difference for one category become points-of-parity for

H. Choosing Specific POPs and PODs

i. Competitive advantage is a company’s ability to perform in one or

more ways that competitors cannot or will not match

iii. A leverageable advantage is one that a company can use as a

springboard to new advantages

iv. Marketers typically focus on brand benefits in choosing the points-of-

vi. Means of Differentiation

1. Any product or service benefit that is sufficiently desirable,

2. The most compelling means of differentiation for consumers

are benefits related to performance

3. Often a brand’s positioning transcends its performance

4. To identify possible means of differentiation, marketers have to

match consumers’ desire for a benefit with their company’s

1. They provide quantitative pictures of market situations and the

2. By overlaying consumer preferences with brand perceptions,

marketers can reveal “holes” or “openings” that suggest unmet

2. Authenticity also has functional value

3. Emotional brands can also provide financial payoffs

I. Brand Mantras: three- to five-word articulations of the heart and soul of the

brand

i. Closely related to other branding concepts like “brand essence” and

2. Three key criteria for a brand mantra:

a. Communicate—clarify what is unique about the brand.

b. Simplify—memorable; short, crisp, and vivid in

III. Establishing a Brand Positioning

A. A brand bull’s–eye provides content and context to improve everyone’s

understanding of the positioning of a brand in the organization

i. The inner two circles is the heart of the bull’s-eye—key points-of-

parity and points-of-difference as well as the brand mantra

1. Points-of-parity and points-of-difference should be made as

specific as possible without being too narrow

2. Points-of-parity and points-of-difference should be constructed

3. Points-of-difference should also be stated in positive,

aspirational terms

ii. In the next circle out are the substantiators or reasons-to-believe

(RTB)—attributes or benefits that provide factual or demonstrable

support for the points-of-parity and points-of-difference.

iii. Finally, the outer circle contains two other useful branding concepts:

1. The brand values, personality, or character—intangible

2. Executional properties and visual identity—more tangible

components of the brand that affect the way customers see it

iv. Three boxes outside the bull’s-eye provide useful context and

interpretation.

1. One includes the consumer target and a key insight about

2. One box provides competitive information about the key

3. One box offers a “big picture” view of the output—the ideal

consumer takeaway if the brand positioning efforts are

successful

B. Often a good positioning will have several PODs and POPs, but two or three

C. Brands need to communicate category membership, which may or may not be

obvious

i. The typical approach to positioning is to inform consumers of a

brand’s membership before stating its point-of-difference.

ii. There are three main ways to convey a brand’s category membership:

2. Compare to exemplars—Well-known, noteworthy brands in a

category can also help a brand specify its category membership

3. Rely on the product descriptor

D. One common challenge in positioning is that many of the benefits that make

2. Linking the brand to a person, place, or thing that possesses the

3. Convincing consumers that the negative relationship between

attributes and benefits, if they consider it differently, is in fact

positive.

E. It is important to regularly research the desirability, deliverability, and

differentiability of the brand’s POPs and PODs in the marketplace to

understand how the brand positioning might need to evolve or, in relatively

rare cases, be completely replaced.

i. In assessing potential threats from competitors, three high-level

variables are useful:

1. Share of market

3. Share of heart

Companies that make steady gains in mind share and heart share will inevitably make

gains in market share and profitability

IV. Alternative Approaches to Positioning

A. Brand Narratives and Storytelling: rather than outlining specific attributes or

benefits, some marketing experts describe positioning a brand as telling a

narrative or story.

ii. Five elements of narrative branding:

1. The brand story in terms of words and metaphors

2. The consumer journey or the way consumers engage with the

4. The manner in which the narrative is expressed experientially

or the brand engages the senses

5. The role the brand plays in the lives of consumers

iii. Framework for a brand story:

1. Setting: time, place, and context

2. Cast: The brand as a character, including its role in the life of

3. Narrative arc: The way the narrative logic unfolds over time,

4. Language: The authenticating voice, metaphors, symbols,

themes, and leitmotifs

B. Primal branding views brands as complex belief systems

i. Seven assets make up this belief system or primal code: a creation

story, creed, icon, rituals, sacred words, a way of dealing with

nonbelievers, and a good leader

C. Cultural Branding suggests that for companies to build iconic, leadership

brands, they must assemble cultural knowledge, strategize according to

cultural branding principles, and hire and train cultural experts

V. Positioning and Branding for a Small Business

A. Building brands is a challenge for a small business with limited resources and

budgets

i. Focus and consistency in marketing programs become critically

important

ii. Creativity is also paramount—finding new ways to market new ideas

about products to consumers