MM: Chapter 11

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MM Chapter 11

• Positioning and differentiating the
• Market Offering
• Through the
• Product Life Cycle

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Positioning

• the act of designing the companys offering and
  image to occupy a distinctive place in the target
  markets mind

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4 major positioning errors
underpositioining
overpositioning
doubtful positioning
confused positioning
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4 major positioning errors

• Underpositioning a vague idea of the brand e.g.,
  Siam University
• Overpositioning a too narrow image of the brand
  e.g., ABAC
• Confused positioning a confused image of the
  brand coz of too many claims
• Doubtful positioning a hard-to-believe claim of
  the brand e.g., ABACs medicine faculty

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Different Positioning Strategies
Quality/Price Positioning (Rejoice)
Attribute Positioning (Biyok Tower)
Benefit Positioning (Smooth E)
Product category Positioning (Mistine)
Use or Application Positioning (Aspirin)
Competitor Positioning (DTAC)
User Positioning (Vermicelli)
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What is Differentiation?

• A process of adding a set of meaningful and
  valued differences to distinguish a companys
  offering from competitors offerings.

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How to Differentiate

• 3 steps
• Defining the customer value model listing all
  pdt or service factors
• Building customer value hierarchy
• Deciding on the customer value package combining
  important factors to make your product outperform
  competitors

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Differentiation Tools 1

• As differentiation opportunities varies with the
  type of industry, we need to identify type of
  industry.
• Volume industry
• Stalemated (commodity-type) industry
• Fragmented industry
• Specialized industry

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Differentiation tools 2
Channel -Coverage -Expertise -Performance

• Image
• Symbols
• Media
• Atmosphere
• Events

• Services
• - Ordering
• ease
• - Delivery
• - Installation
• Customer
• Training
• Customer
• Consulting
• - Maintenance
• and Repair
• Miscell.

Product -Form -Features -Performance -Conformance
-Durability -Reliability -Reparability -Style -Des
ign

• Personnel
• -competence
• Courtesy
• Credibility
• Reliability
• Responsiveness
• Communication

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Product Life Cycle

• Products have a limited life.
• Product sales pass through different stages,
  posing different challenges.
• Profits rise and fall at different stages.
• Products require different marketing, financial,
  manufacturing, purchasing and HR mgmt in each
  stage.

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Stages of Product Life Cycle

• Introduction
• Growth
• Maturity
• Decline

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Types of PLC

• Product categories carbonated drinks
• Product forms soft drinks
• Product cola
• Branded products Coke

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Shapes of PLC

• Growth-slump-maturity pattern Microwave
• Cycle-recycle pattern TV, drugs
• Scalloped pattern Baking Soda

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Strategies for each Stage of PLC
Maturity Stage
Growth Stage
Declining Stage
Introduction Stage
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Introduction Stage

• Slow sales growth
• Heavy distribution and promotion expenses
• Negative profits
• 4 possible strategies -
• 1. Rapid skimming
• 2. Slow skimming
• 3. Rapid penetration
• 4. Slow penetration

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Introduction Stage

• Pioneer advantage
•   1. Highly rewarding, risky and expensive
• 2. Early users will favor the pioneers
• brand if they try it and find it to be
• satisfactory.
•     3. Pioneers builds the standard of
• required attributes a product class
• should process.
•      4. Economies of scale, technological
• leadership, ownership of scarce assets
• and creation of entrance barriers.

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Growth Stage

• Rapid sales growth
• Decline in promotion-sales ratio
• Improved product quality, new product features
• New models
• Enters new mkt segment
• Increased distribution coverage
• Primary dd ? selective demand
• Lower prices for price-sensitive buyer

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Maturity Stage

• Dominated by a few firms.
• Some firms abandon weaker products.
• Modification strategies -
• Market modification
• Product modification
• Marketing-mix modification

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Decline Stage

• Sales drops because of
• Technological advances
• Shift in consumer tastes
• Increased domestic and foreign competition
• Drop weak product except in case it sustains the
  sales of other products.
• Ways to cope with declining industry
• Increasing investment
• Maintaining investment
• Decreasing investment selectively
• Harvesting
• Divesting

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Comments on PLC Concept

• Benefits
• It helps marketer interpret product and mkt
  dynamics.
• It helps characterize the main mkt strategies.
• It can be used to measure product performance
  against similar products.
• Disadvantages
• In reality, PLC does not have a fixed sequence.
• In reality, PLC is the result of mkting
  strategies rather than a course the sales must
  follow.