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Chapter 7
Subway
Strategic challenges
The success of a product offered to a given target market depends on how well it is positioned within that market segment- that is, how well it performs relative to competitive offerings and to the needs of the target audience. Positioning refers to both the place a product or brand occupies in customers mind relative to their needs and competing products or brands and to the marketers decision making intended to create such a position.
Positioning
Positioning is basically concerned with differentiation. It is creative undertaking whereby an existing brand in an overcrowded market place of similar brands can be given a distinctive position in the minds of targeted prospects. how should a business position its product offering-whether goods or services- so customers in the target market perceive the offering as providing the benefits they seek.
Discussion Questions
Discussion Questions
Exhibit 7.1
Differentiation
Broad Target
Competitive Scope
Narrow Target
Focus Strategy
Source: Adapted from Michael Porter, Competitive Advantage,New York: The Free Press, 1985, p. 12.
7-5
Physical positioning
One way to assess the current position of the product offering relative to competitors is on the basis of the various offerings compare on some set of objective physical characteristics. In many cases a physical comparisons can provide useful information to a marketing manager, particularly in the early stages of identifying and designing new product offerings.
Physical comparisons
Despite being based primarily on technical rather than on market data, physical comparisons can be an essential step in undertaking a positioning analysis. It contributes to a better marketing/R&D interface by determining key physical product characteristics, helps define the structure of competition by revealing the degree to which the various brands compete with one another. It may indicate meaningful product gaps.
Perceptual positioning
Consumer often be completely unaware of the physical attributes of many house hold products. Many consumers do not want to be bothered about a products physical characteristics because they are not buying these physical properties but rather the benefits they provide. For eg, painkiller, tooth paste, juice etc.
Perceptual positioning
The evaluation of many products is subjective because it is influenced by factors other than physical properties, including the way product is presented, our past experiences with them and the opinion of others. For eg some people will pay considerably more for nestle bottled water than for gourmet water, even though they are essentially the same product.
Exhibit 7.3
Perceptual positioning
Consumer orientation Perceptual attributes Perceptual measures Need for marketing research Perceptual brand positions and positioning intensities Limited number of dimensions Represents impact of product specs and communication R&D implications need to be interpreted
Large number of dimensions Represents impact of product specs and price Direct R&D implications
Where would you plot your favorite cereals? Your kids favorites? Your grandmas?
Complex physically based attributes: when physical characteristics are large in number then consumers may use only some attributes for evaluation, therefore it becomes highly subjective in nature. Essentially abstract attributes: these perceptual attributes are influenced by physical characteristics, but they are not directly related. Price: price may infer other attributes such as high or low quality.
Exhibit 7.4
Exhibit 7.4
Step 2
Consumers can use many attributes to evaluate products or brands, but the number actually influencing a consumers choice is typically small, partly because consumers can consider only attributes of which they are aware. More variables used in positioning result in greater confusion and even disbelief. There positioning should be simple and clear at all costs.
Step 3:collect data about customers perceptions for products in the competitive set.
After identifying a set of competing products, the marketer needs to know what attributes are determinant for the target market and the product category under consideration. Then see how these products are viewed on these attributes. Conduct qualitative research and then quantitative.
1. 2.
It is important to develop a clear understanding of the positioning of the products that have been determined to be in the competitive set. There are two methods. Positioning grid Value curve.
Step 6: consider fit of possible positions with customer needs and segment attractiveness
Since differences between customers ideal points reflect variations in the benefits they seek, a market positioning analysis can simultaneously identify distinct market segments as well as the perceived positions of different brands.