Product Market Boundaries Are Constantly Changing

OBSERVATIONS

·  Positioning is a good diagnostic procedure – a “snapshot.” Positioning strategy involves several snapshots (changes in taste, preferences, number of competitors).

·  Product market boundaries are constantly changing

·  The multi-product company must simultaneously develop several positioning strategies (or develop a corporate positioning).

·  There exists a synergy between position and dropp/add decisions within a product line and between lines.

·  In a situation of corporate mergers the end result might be too many items on one line and a gap in other lines.

·  Essentially, consumer goods are commodities. Positioning can assist in changing a commodity into a brand. Note—A brand can lose its identity and become a commodity.

·  All marketing mix variables should be incorporated into a positioning strategy.

Product Positioning Using Perceptual Maps

A key to positioning is the perceptions of consumers. Companies can obtain 3 types of data from consumers/target market(s):

1.  Evaluations of the important attributes for a product class.

2.  Judgments of existing brands with the important attributes.

3.  Ratings of an “ideal” brand’s attributes.

From these data, it is possible to develop a perceptual map, a means of displaying or graphing in two dimensions the location of brands in the minds of consumers.

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1.  MDS positioning based on similarity of brands

e.g. rank/rate all brands according to their similarity to an anchor brand and rotate the brands until all brands have served as an anchor.

2.  MDS positioning based on the brand’s position on the relevant dimensions or various product attributes

i.e. identify the position of each brand on the major dimensions (frame of reference along which brands are compared perceptually)

3.  MDS positioning based on both perceptions and preferences

i.e. the ideal point approach to product positioning

Approaches to Product Positioning

I.  General Approaches:

1.  head-to-head

2.  differentiation

II.  Ways to Position a Product:

1.  Positioning by attribute/benefits

e.g. Volvo – “durability”

2.  Positioning by price/quality

e.g. Mobile vs. “no name” gas station

3.  Positioning by use/application

4.  Positioning by product user

e.g. The Pepsi Generation

5.  Positioning by product class

Parkay Margarine is advertised as tasting just like butter.

6.  Positioning by the competition

7-Up the Uncola

7.  Positioning by combination of ways (hybrid positioning)

Product Optimization

Using magnitude estimation consumer senory reactions and experimental/brand product liking are estimated and evaluated.

Sensory reaction (perception =

Level of input

Or incredient

e.g. dark coffee or

yellow lemon-lime

soft drink

The model is linear.

Sensory reaction (preference) = f(level of input)

The function is curvilinear