MGTC21 Study Notes - CH 3.docx

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12 Apr 2012
- Step 2 of CBBE.. Create Brand Meaning
Identifying & establishing brand positioning
Basic Concepts
Brand positioning - designing a company offering & image so it occupies a distinct
& valued place in consumer minds (heart of marketing strategy)
o Finding a proper location in minds of consumers, so they thing about product in
“right”/desired way to max benefit to firm
o Good brand positioning clarifys what brand is about, how it is unique/similar to
competitors, & why consumers should use it
According to CBBE, deciding on positioning requires:
o Determining fram of reference (identify target market & nature of competition)
o Determine ideal points of parity & points of differnece
Marketers need to know:
target consumer
main competitors
how brand is similar to competitors
how brand is different
Target Market
help identify which brand associations should be strongly held, favourable & unique
market - set of all actual & potential buyers w/ sufficient interest, income & access to
market segmentation - divides market into groups of consumers w/ similar needs &
behaviour (require similar marketing mix)
Market segmentation requires making trade-offs bw cost & benefits – the more finely
segmented the market, the more likely that the firm can implement marketing
programs that meet the needs on consumers in any one segment (^ costs of reduced
Segmentation bases
1. customer-oriented - what kind of person or organization the consumer is
2. product oriented - what do customer think of or uses the product
o behavioural segmentation bases are most valuable in understanding branding
issues bc they have clearer strategic implications
o Eg – 4 main behavioural segments for toothpaste: sensory (taste), sociable (white
teeth), worriers (prevent decay), independent (Low price)
conversion model - measures strength of psychological commitment between brands
& consumers openness to change
o 4 groups of commitment
convertible - highly likely to switch brands
shallow - not ready but considering alternatives
average - comfortable w/ choices - unlikely to switch
entrenched - staunchly loyal - unlikely to change in foreesable future
o also classifies 4 groups of nonusers
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strongly unavailable - strongly prefer current brand
weakly unavailable - prefer current brand - not strongly
ambivalent - attracted to the other brand as current choice
available - prefer other brand but not yet switched
“Funnel” Model - to convince more consumers to consider brand: raise brand salience
or make brand more acceptable in consumers' repertoire
Main advantage of demographic segmentation is the demographics of traditional
media vehicles are generally well known, and it is easier to buy media on that basis
Criteria - number of criterias help guide segmentation
i. Identifiability - easily identify segment?
ii. Size - adequate sales potential in segment?
iii. Accessibility - distribution & communication channels available to reach
iv. Responsiveness - how favourable will segment respond to tailored marketing
Nature of competition
Deciding to target a certain type of consumers often defines the nature of completion
(bc other brands may have/will target the same group, or bc those consumers may
look to other brands in their purchase decisions)
Competitive analysis considers host of factors (resources, capabilities, intentions of
other firms) to help marketers choose markets where consumers can profitably be
Lesson - do not define competition narrowly eg. A high end stereo can impact
decision to take vacation
o competition can occur at benefit level not just attributes
Recognizing the nature of diff levels of competition has important implications for the
desired brand associations
Points of Parity & Points of Difference
proper positioning requires establishing correct points of difference & points of parity
Points of Difference Associations
Points of difference (POD) - attributes or benefits that consumers strongly associate
w/ brand, positively evaluate, & believe they cant find the same w/ another brand
o According to CBBE, classify candidate as wither functional, performance-related
considerations or abstract, imagery-related considerations
unique selling proposition (USP) - focus on how product is unique & beneficial
(focus on what is said in ad, not how it is said )
sustainable competitive advantage (SCA) - ability to achieve & advantage in
delivering superior value in marketplace for extended time
points of difference relates to both concepts - brand must have strong, favourable &
unique associations to differentiate from others
POD may rely on performance attributes (airbags) or performance benefits (consumer
friendly technology). In other cases they come from imagery associations (luxury &
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status of Louis Vuitton)
Some PODs are based on superior quality or low-cost provider - many diff PODS are
Points of Parity associations
Point of Parity Associations (POP) - not unique to brand but may be shared by other
2 types:
o Category points of parity - necessary conditions of brand choice (not
necessarily sufficient)
exists minimally at the generic product level & most likely at expected
product level
eg. bank is truly considered a bank unless it offers a wide range of services
like other banks do
May change over time bc of tech advances, legal developments, & consumer
Important when brand launches brand extension in new category (consumers
might have clear understanding of POD bc of brand, but they need
reassurance as to whether the extension has POP)
o Competitive points of parity - associations designed to negate competitors'
point of difference
If brand can “break even” where competitors are trying to find advantage, &
can achieve advantage in some other area, the brand should be in a strong
competitive position
POPs vs PODs
To achieve POP - large number of consumers must believe brand is good enough
They must feel it can perform sufficiently well as other brands in category (but not
literally equal)
POP is easier than POD - POD requires demonstration of clear superiority
Positioning Guidelines
1. Defining & Communicating the Competitive Frame of Reference
determine category membership is first step - which products do brand compete w/
preferred approach to positioning - inform consumers of brand's category membership
before determining its POD to other category members
o consumers need to know what a product is/function it serves bf they can decide
whether it dominates the competition
o If going for 2 categories at once, consumers may not view the product as a
legitimate player in either category if the POD & POP are not credible in both
3 ways to convey brand membership:
o communicating category benefits
show brand possesses benefits within their category (can use performance &
imagery associations for supporting evidence – eg. cake mix. Great taste.
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