Positioning–1

Positioning

Positioning concept

Perceptual mapping

Preference mapping

Positioning–2

Key Concepts

Differentiation: Creation of tangible or intangible differences on one or two key dimensions between a focal product and its main competitors.

Positioning: Strategies conceived by firms to ensure that the main differences between the focal product and its competitors occupy a distinct and important position in the minds of current and potential customers.

Mapping: Techniques (using customer-data) that enable managers to develop differentiation and positioning strategies by helping them to visualize the competitive structure of their markets as perceived by their customers. Example data include customer perceptions of existing products (and new concepts) along various attributes, perceptions of similarities between brands, preferences for the products, or measures of behavioral response of customers toward the products.

Positioning–3

Some Positioning Bases

Life style (self-concept) positioning

Attribute positioning

Benefit positioning

Competitive positioning

Time-based (e.g., usage occasion) positioning

Positioning–4

Generic Positioning Strategies

Our product is unique

(eg, Perdue chicken).

Our product is different

(eg, Listerine).

Our product is similar

(eg, Meisterbrau).

Positioning–5

Consumers face increasing number of choices

Over 8,200 mutual funds

Over 150 models of cars

Over 30,000 products in a grocery store

Over 100,000 prescription drugs

If we can figure out in the crowd, we will have a better handle on our future profitability.

Crowded Markets

Positioning–6

Marketing Opportunities Associated with Positioning

Find unmet (or inadequately met) customer needs and wants.

Identify product strengths that are unique and important.

Determine how best to overcome product weaknesses.

Identify market segments for which a particular product or new concept would be appealing.

An Electrical Engineer reads diagrams such as the one here

An organic chemist reads diagrams such as the one here

Positioning 7

Positioning–8

Can You See Patterns in These Customer Data?

Ratings of nine brands of notebook computers on several attributes

B1 B2 B3 B3 B4 B5 B6 B7 B8 New

Attractive 5.1 3.6 3.5 5.4 3.9 4.8 5.2 4.0 5.2 4.0Light 6.0 3.5 5.0 3.9 3.3 5.3 5.0 2.5 5.5 2.5Unreliable 3.4 4.1 4.5 2.1 4.5 2.7 4.5 3.7 2.5 3.8Plain 1.5 4.1 2.9 2.3 4.5 2.7 3.5 4.3 2.2 5.2Battery life 3.3 4.9 4.3 4.1 3.9 3.0 3.5 6.2 3.5 4.0Screen 3.5 5.3 3.4 6.4 5.4 5.2 3.3 6.0 3.3 4.8Keyboard 2.6 3.5 2.5 3.4 3.8 3.3 2.8 5.0 4.3 4.7Roomy 5.5 4.3 5.4 3.1 3.4 3.3 4.7 3.5 4.3 4.2Easy service 4.5 4.9 3.3 5.0 4.4 4.5 3.3 4.7 3.8 4.5Expandability 5.5 4.3 5.4 3.1 3.4 3.3 4.7 3.5 4.3 4.2Setup 5.6 3.5 5.6 5.4 2.5 4.2 5.2 3.3 5.8 2.5Common 4.1 3.5 3.3 2.9 4.0 4.3 2.2 4.2 3.3 4.2Value 3.5 4.8 4.4 3.6 3.6 2.7 3.2 4.7 3.5 4.0Preference 7.4 3.4 4.8 6.6 4.4 7.4 7.1 3.8 6.9 3.3

Positioning–9

Marketers Need to Learn to Read Perceptual Maps!

Positioning–10

1.Company provides adequate insurance coverage for my car.2.Company will not cancel policy because of age, accident experience, or health problems.3.Friendly and considerate.4.Settles claims fairly.5.Inefficient, hard to deal with.6.Provides good advice about types and amounts of coverage to buy.7.Too big to care about individual customers.8.Explains things clearly.9.Premium rates are lower than most companies.10. Has personnel available for questions all over the country.11. Will raise premiums because of age.12. Takes a long time to settle a claim.13. Very professional/modern.14. Specialists in serving my local area.15. Quick, reliable service, easily accessible.16. A “good citizen” in community.17. Has complete line of insurance products available.18. Is widely known “name company”.19. Is very aggressive, rapidly growing company.20. Provides advice on how to avoid accidents.

Does notDescribes it describecompletely it at all| | | | | |0 1 2 3 4 5

Conventional Mapping UsingSnake Charts

Positioning–11

Uses of Mapping Techniques

Check how customer perceptions of your products compare to those of your competitors.

Identify product strengths and weaknesses.

Select competitors to compete against.

Determine exactly how much change is need on key product attributes to move your products to more favorable positions.

Visually determine whether your communications programs are having the desired impact on market perceptions.

Compare perceptions from different demographic, geographic, or psychographic subgroups in your market.

Positioning–12

Mapping Techniques

Mapping perceptions Attribute-ratings methods (particularly useful for

functional products)

Overall-similarity methods (particularly useful for image-oriented products)

Mapping preferences Include an overall preference vector in a perceptual map

“External” analysis to fit preferences of individuals on a common perceptual map

Mapping Methods in Marketing

Perceptual Maps Preference MapsJoint Space Maps

(includes both perception & preference)

Similarity-based methods

Attribute-based methods

Ideal-point model(unfolding model)

Vector model

External analysisusing PREFMAP-3

Simple “joint space maps” using modified perceptual mapping methods

Positioning 13

Positioning–14

Perceptual Maps Using Attribute Ratings

Select a set of PDA’s which are of interest to the target group of customers (including the new concept of interest).

Identify a set of key attributes on which these pda’s are evaluated by the target group (e.g., through focus groups).

Ensure that customers are familiar with the products of interest (e.g., through video presentation).

Have customers evaluate the products on the chosen set of attributes.

Example: Positioning of a new PDA concept

Light ...........................… Heavy (A1)Unreliable ..............…............. Reliable (A2)Small …........................... Large (A3)Poor Connectivity …………………... Good connectivity (A4)Poor value ...........…............… Good value (A5)...Definitely wouldnot buy ......................…..... Definitely would buy (Preference)

Positioning–15

Screen quality

Connectivity?

Image ? Common

Large

Easy to use

Successful

Good Communicationcapabilities

Newton 130 Sony PIC 2000

Example Plot of Attributes of PDAson a 2-D Perceptual Map

(Difficult to use)

(Poor Communicationcapabilities)

Positioning–16

Perceptual Map of Beer Market (Example from Book)

Popular with MenHeavy

Special Occasions

Dining Out Premium

Popular with

Women

Light

Pale Color

On a Budget

Good ValueBlue Collar

Full Bodied

PremiumBudget

Light

Heavy

•

Meister Brau

Stroh’s

•

•

•

Beck’s

• Heineken

Old Milwaukee

•

Miller •

Coors•

Michelob•

Miller Lite

• Coors Light•

OldMilwaukee Light

•

Budweiser

Less Filling

Positioning–17

Interpreting Perceptual MapsAnother Example

Positioning–18

Guidelines for Interpreting Perceptual Maps

The arrow indicates the direction in which that attribute is increasing (The attribute is decreasing in the direction opposite to the arrow). Thus, PDAs positioned farther and farther in the South-West direction are considered to offer “good value,” and those positioned in the North-East direction offer poor value.

The length of the line from the origin to the arrow is an indicator of the variance of that attribute explained by the 2D map. The longer this line, the greater is the importance of that attribute in helping you to interpret the map. Thus, “screen quality” and “expandability” are relatively more important than “economical” and “communication capabilities” in explaining how this group of customers discriminates between the PDAs.

Positioning–19

Attributes that are both relatively important and close to the horizontal (vertical) axis help you in articulating the meaning of the axis. Here, the two dimensions along which these customers seem to discriminate between the computers appear to be “Image” for the horizontal axis and “Connectivity” for the vertical axis. This interpretation can be based on attributes most correlated with the axes (Common, value, perceived success, etc. for the horizontal axis), and communication capabilities and connectivity for the vertical axis).

To position a PDA on each attribute, draw an imaginary perpendicular line from the location of that PDA onto that attribute. (These are shown by dashed lines on the map). Thus, Sony PIC 2000 is perceived to be easier to use than the Sharp 5800.

Guidelines for Interpreting Perceptual Maps (contd.)

Positioning–20

Mapping Preferences

Objective—Introduce customer preferences into perceptual maps:

A simple ideal point method (MDPREF): Introduce an “ideal” brand as an additional stimulus evaluated by customers.

1. Combine attribute ratings of ideal brand with the other brands.

2. Compare how similar the ideal brand is to the other brands included in the study.

A simple vector method (MDPREF): Introduce “preferences” as an additional variable in the ratings data

1. Analyze the preference variable simultaneously with evaluations of the cars on each attribute.

Identify which attributes influence consumer preferences the most Identify which brands are most preferred in the aggregate.

2. Analyze preferences separately for each customer.

Identify target segments that prefer the brand of interest the most

Positioning–21

Mapping Preferences cont’d

PREFMAP-3 external unfolding

Develop a perceptual map of competing alternatives by other methods.

Given the fixed positions of the alternatives, map the preferences of customers on the same map (this approach is called external unfolding).

Positioning–22

Two Preference Models

Attribute Attribute

Preference Preference

Ideal-Point Preference Model Vector Preference Model

Ideal Point

IncreasingPreference

DecreasingPreference

(eg, sweetness) (eg, service speed)

Positioning–23

Interpreting Preference Models

(a)A is preferred twice as much as B.

(dIB = 2dIA)

Ideal-Point Map

Ideal Point (I)

A

B

dIB

dIA

Vector Map

(b)A is preferred to B and B is preferred to C.With reference to A, C is preferred half as

much as B.(dAC = 2dAB)

Preference Vector

A

C

dAB

dAC

B

Positioning–24

MDPREF Vector Method for Representing Aggregate Preferences

Matrix of inputs:

A1 A2 A3 A4 ............... A15, PREFDell 320N 4 3 4 1 2 2

C1 TI Travelmate 6 3 7 2 8 8Toshiba concept 3 6 2 7 6 6 •

• •

Dell 320N C2 TI Travelmate

Toshiba conceptNote: A higher number on PREF indicates higher preference for that brand.

Compute average ratings of each brand on each attribute and the average preferences for each brand.

Submit data to MDPREF to obtain a “joint space” map showing relationships between brands and their evaluations on each attribute.

Interpret the map. The relative locations of the brands are directly provided by the map. The orientation of the attributes (including preference) are determined by drawing vectors from the origin to each attribute. The positionf a brand on an attribute is determined by drawing a perpendiclar line from the brand location to the attribute orientation.

Positioning–25

• Preference

Preference Map Using MDPREF Vector Model

Low battery life

• New Concept

• Toshiba

Unsuccessful

Heavy

Reliable • IBM• Compaq

Keyboard

ExpandabilityElegantDistinctAvant-Garde

Fast operation• Sanyo

• Good design• TI• Dell

• AST Exec

ValueGraphics

Screen quality

• NEC

• SamsungPoor setup

Difficult to use

Positioning–26

Matrix of inputs:

C1 C2 C3 C4 ...............Newton 2 3 9 3

HP200LX 7 7 2 5Canon 3 8 3 5 • •

• An element of this matrix is the stated preference of each consumer (C1, C2, . . .) for each brand. A higher number indicates higher preference for that brand.

Submit data to PREFMAP-3 (in addition to perception data) to obtain a “joint space” map showing relationships between brands and preferences between brands for each consumer.

Interpret the map. The relative locations of the brands are directly provided by the map. The direction in which an individual consumer’s preferences are increasing is determined by drawing a vector from the origin to each consumer’s ID displayed on the map. The relative preference for a brand for an individual consumer is determined by drawing a perpendicular from the brand location to the preference orientation. Identify target segments by examining consumer groupings on the map.

Data for PREFMAP-3 for Representing Individual Preferences

Positioning–27

A Joint-Space Map (This Example Only Shows Preferences and Brands)

Positioning–28

Evaluating Perceptual and Preference Maps

Technical adequacy What percentage of the total information (variance) in the raw data is captured

in the map?

What percentage of the information of each attribute (variance) is captured in the map?

Managerial interpretation (example questions) What underlying dimensions seem to characterize how customers view the

products?

What is the competitive set associated with the target product or new concept?

How well is a target product positioned with respect to the existing products?

Which attributes are related to each other?

Which attributes influence customer preferences positively? negatively?

What improvements will enhance the value of a product or new concept?

Which customer segments have positive perceptions and high preference for the product?

Positioning–29

An Example Positioning Statement

For [target segment], the [concept] is [most important claim] because [single most important support].

Example:

For PC Users, the IOMEGA Zip drive is the best portable storage device because it is most cost-effective system.

Positioning–30

Some Positioning Themes

Apple iPod

BMW

Burger King

Charmin Tissue

Coke

Chevy Trucks

Colgate Total Toothpaste

Disney

GE

Mobil Service Stations

Universal’s Orlando

Visa

Volvo

1000 songsExceptional performance

Have it your waySoftness

Authentic, real, originalTough, strong, durableTotal dental protection

Wholesome family entertainment

Improves the quality of lifeFast, friendly service

Thrills, excitement, escapeAccepted everywhere

Safety

Positioning–31

Initiating Positioning Studies in Companies

Four Questions to Get Positioning Studies Started

Who do we need to target?

What do they think now?

What do we want them to think, now and from now on?

How do we do that?

Positioning–32

Implementing Positioning

Leverage strategically advantaged resources: Product characteristics

features, performance, durability, conformance, reliability, style, etc.

Service attributes

delivery, installation, consultation, customer training, repair, etc.

Personnel

competency, credibility, courtesy, responsiveness, etc.

Brand image

symbols, emotion, personality, etc.

Positioning–33

Limitations

Provides a static model - ignores dynamics of customer perceptions.

Interpretation is sometimes difficult.

Does not incorporate cost or likelihood of being able to achieve a desired positioning.

Does not incorporate a “probability model” to indicate goodness of a map.

Generally, need about 6 to 8 products in a category to make the technique useful.

Positioning–34

Other Software for Perceptual Mapping

Standard statistical packages, such as SPSS, have routines for perceptual mapping (www.spss.com)

Market Visioner: http://www.dssresearch.com/PerceptualMap/default.htm

BrandMap: www.wrcresearch.com/brandmap.htm

HierMaps: This is based on Correspondence Analysis www.intellicomm.com