Topic:- Developing & Communicating a Positioning Strategy
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1 All marketing Strategy is built on STP :- Segmentation Targeting Positioning Topic:- Developing & Communicating a Positioning Strategy Positioning :- is the act of designing the company s offering & image to occupy a distinctive place in the mind of the target market. Positioning is not what you do the product. Positioning is what you do to the mind of the prospect. Ex:- Domino s brand s essence Delivery speed (30 min), hot pizza, moderate price Differentiation Strategies Brands can be differentiated on the basis of many variables. ex:- Subway differentiates itself in terms of healthy sandwiches as an alternative to fast food. 4 different differentiation strategies :- 1. Product Differentiation 2. Personnel Differentiation 3. Channel Differentiation 4. Image Differentiation 1. Product Differentiation High quality product positioning :- - can charge premium price - can be benefited from more repeat purchase - consumer loyalty - positive word of mouth - not much cost difference in providing more quality. Quality image is also affected by - packaging - Distribution - Advertising - Promotion 1
2 2. Personnel Differentiation Companies can gain a strong competitive advantage through having better-trained people. Ex:- Singapore Airlines :- popular for its flight attendants. McDonald s :- people are courteous IBM :- professional Better trained personnel exhibit 6 characteristics :- (i) Competence (ii) Courtesy (iii) Credibility (iv) Reliability (v) Responsiveness (vi) Communication Retailers in particular, are likely to use their front-line employees as a means of differentiating & positioning their brand. 3. Channel Differentiation Companies can achieve competitive through the way they design their distribution channel s - coverage - expertise - performance Ex:- Avon in cosmetics distinguish themselves by developing & managing high quality direct-marketing channels 4. Image Differentiation Buyers respond differently to company & brand images. Identify & image difference :- Identify :- the company aims to position itself or its product Image:- the way the public perceives the company or its product. Ex:- Marlboro s :- image is macho cowboy 2
3 Sales & Profits (rs) PLC (Product Life Cycle) Marketing Strategies Most product life-cycle curves are portrayed as bell-shaped. This curve is typically divided into 4 stages :- 1. Introduction 2. Growth 3. Maturity 4. Decline Sales Profit Introduction Growth Maturity Decline Time 1. Introduction Stage :- A period of slow sales growth as the product is introduced in the market. Profits are nonexistent because of the heavy expenses of product introduction. Points :- - Profits are negative or low - Promotional expenses at their highest due to -informing potential consumers -inducing product trial -secure distribution in retail outlets - Prices tend to be high as costs are high Pioneer firms :- who are the first entrants in the market. It can be rewarding, risky & expensive. Pioneer Advantage :- sustained market dominance. Pioneer can have more effective marketing spending & enjoy higher rates of consumer repeat purchases. ex:- coca-cola, Hallmark & Amazon.com. 3
4 2. Growth Stage :- A period of rapid market acceptance & substantial profit improvement. Points:- - rapid climb in sales - additional consumers start buying - New competitors enter - New product features & distribution Marketing Strategies in the growth stage:- - Improved quality & add new product features - New models - Enter new market segment - Increase distribution coverage, new distribution channels - Product-awareness advertising to product-preference advertising - Lower prices to attract price-sensitive buyers 3. Maturity Stage :- A slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits stabilize or decline because of increased competition. Points:- - Competitors scramble to find niches - Increase advertising, trade & consumer promotion - Increased R&D Budgets - Weaker competitors withdraw - Abandon weaker products & concentrate on profitable ones - Domination by giant firms quality leader, service leader, cost leader. Marketing Strategies in the Maturity Stage :- - Market Modification Converting nonusers Entering new market segments - Product Modification Quality improvements Feature improvements Style improvements - Marketing Program Modification Prices Distribution 4
5 Advertising Sales promotion trade deals, rebates, gifts etc Personal Selling Services credit facilities 4. Decline Stage :- Sales show a downward drift & profits erode. Points :- - Decline due to technological advances - Shifts in consumer tastes - Increased domestic & foreign competition - Overcapacity Marketing Strategies in Decline stage :- - Increased price cutting - Reduce no. of products to offer - Cut promotion budget - Reduce prices - Withdraw from smaller market segments & weaker trade channels 5
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