1 MKT 455 MKT 455 Understanding Brand Positioning Understanding - PDF document

MKT 455 Initial Thoughts on Products and Brands Marketing Strategy Product: A “benefit delivery system” MKT 455 What benefits do customers want? What benefits does our product deliver them? Marketing Strategy How does our product deliver the benefits? Core Product Actual Product Brand and Product Strategy Options Augmented Product MKT 455 MKT 455 Initial Thoughts on Products and Brands Initial Thoughts on Products and Brands Marketing Strategy Marketing Strategy Why Branding Products is Important Product: A “benefit delivery system” To the Customer What benefits do customers want? Reduce search and search costs What benefits does our product deliver them? Reduce risk How does our product deliver the benefits? To the Marketer Brand: The promise of the benefit Encourage repeat purchase What benefits does the brand promise? Efficiently communicate product benefits How does the brand promise those benefits? Capitalize on marketing economies of scale Efficiently delineate from competitive brands MKT 455 MKT 455 Initial Thoughts on Products and Brands Initial Thoughts on Products and Brands Marketing Strategy Marketing Strategy Brand Positioning Basics Brand Positioning Basics Product or Brand “Position”: The mental perception a target audience Product or Brand “Position”: The mental perception a target audience holds about a product or brand, relative to its competitors . holds about a product or brand, relative to its competitors . Positioning draws from the organization of memory into “memory schema,” or systems of classifying stored concepts. Successfully positioned product emphasizes differences with key competitors (who you select). Points of differentiation should, optimally, fill “holes” in consumers’ perceptions of marketplace. Position Perceptual Maps Marketers base product positions not on competitors’ product attributes, but on competitors’ claims . 1

MKT 455 MKT 455 Understanding Brand Positioning Understanding Brand Positioning Marketing Strategy Marketing Strategy Position Perceptual Maps Roughly similar in basic function to distance perceptual mapping. Less concerned with “perceived distance” between brands. More concerned with proximity to brand attributes or benefits. Uses a different estimation technique than distance mapping (see web notes). Position Perceptual Maps MKT 455 MKT 455 Understanding Brand Positioning Understanding Brand Positioning Marketing Strategy Marketing Strategy Position Perceptual Maps Position Perceptual Maps Example: Laptop Computers Common Measured on six dimensions: Light Toshiba 1960CT weight: light □ □ □ □ □ heavy Easy Set-up appearance: plain □ □ □ □ □ elegant Slow distinctiveness: common □ □ □ □ □ distinctive Performance setup: easy □ □ □ □ □ difficult Elegant speed: slow □ □ □ □ □ fast Excellent Value IBM 701C value: poor □ □ □ □ □ excellent Look/Styling MKT 455 MKT 455 Understanding Brand Positioning Understanding Brand Positioning Marketing Strategy Marketing Strategy Marketers can position centrally or differentially in the product Marketers can position centrally or differentially in the product category. category. pioneer pioneer category prototype category prototype leader leader centrally centrally me too brand me too brand price price differentially differentially anything that works anything that works 2

MKT 455 MKT 455 Preferences and Product Design Preferences and Product Design Marketing Strategy Marketing Strategy Basics on Conjoint Design Although positioning is psychological, it must be based on something. Select three or four attributes of the product being designed or tested. That “something” will be features of the product or other marketing mix Select two, three or four levels of each attribute being tested. components. Present all possible combinations of attributes and levels to respondents. Conjoint analysis is a statistical technique that helps determine the optimal combination of attributes for a product (within limits). Respondents rate, rank, or select combinations they prefer. Conjoint analysis data can be obtained via survey. Also utilizes elements of experimentation. Many variations on dependent variable, which measures preference or choice. MKT 455 MKT 455 Preferences and Product Design Preferences and Product Design Marketing Strategy Marketing Strategy Basics on Conjoint Design Basics on Conjoint Design Conjoint Design Example Conjoint Design Example Suppose company tests hand held GPS devices. Suppose company tests hand held GPS devices. Wants to know how four attributes affect preference. Respondents evaluate 16 possible combinations (2 x 2 x 2 x 2). Wants to test two levels of each attribute. High Options Low Options Accuracy within 10 feet within 50 feet Display Color color black and white Battery Life 32 hours 12 hours Price $350 $250 MKT 455 MKT 455 Preferences and Product Design Preferences and Product Design Marketing Strategy Marketing Strategy Basics on Conjoint Design Basics on Conjoint Design Accuracy Display Battery Price 1 10ft Color 32hrs $350 Conjoint Design Example Conjoint Design Example Color 32hrs $250 2 10ft 3 Color 12hrs $350 Suppose company tests hand held GPS devices. 10ft Suppose company tests hand held GPS devices. 4 10ft Color 12hrs $250 Respondents evaluate 16 possible combinations (2 x 2 x 2 x 2). Respondents evaluate 16 possible combinations (2 x 2 x 2 x 2). 5 10ft B&W 32hrs $350 32hrs 6 10ft B&W $250 Evaluations should show preference or likely choice. B&W 12hrs $350 7 10ft 12hrs $250 8 10ft B&W 9 50ft Color 32hrs $350 10 50ft Color 32hrs $250 11 50ft Color 12hrs $350 12 50ft Color 12hrs $250 B&W 13 50ft 32hrs $350 B&W 14 50ft 32hrs $250 50ft B&W 15 12hrs $350 16 50ft B&W 12hrs $250 3

MKT 455 MKT 455 Preferences and Product Design Preferences and Product Design Marketing Strategy Marketing Strategy Basics on Conjoint Design Basics on Conjoint Design Conjoint Design Example Conjoint Design Example Suppose company tests hand held GPS devices. Suppose company tests hand held GPS devices. Respondents evaluate 16 possible combinations (2 x 2 x 2 x 2). Respondents evaluate 16 possible combinations (2 x 2 x 2 x 2). Compare the following two model options of the PosiTech Hand held GPS. Compare the following two model options of the PosiTech Hand held GPS. Evaluations should show preference or likely choice. Evaluations should show preference or likely choice. Option 1 Option 2 Option 1 Option 2 Accuracy of location within 50 feet within 50 feet Accuracy of location within 50 feet within 50 feet Map display color black & white Map display color black & white Battery life 12 hours 32 hours Battery life 12 hours 32 hours Price $350 $350 Price $350 $350 How would you rate your Strongly Prefer Strongly Prefer Which of these two options 1 2 3 4 5 Option 1 Option 2 preference for these options Option 1 Option 2 would you select? MKT 455 Preferences and Product Design Marketing Strategy Basics on Conjoint Design Conjoint Design Example Suppose company tests hand held GPS devices. Respondents evaluate 16 possible combinations (2 x 2 x 2 x 2). Evaluations should show preference or likely choice. Results can be interpreted similarly to regression analysis. Intercept 2.7 Accuracy 9.6 Battery 30.4 Display 14.9 Price 40.6 4