Chapter 9 - Group 2

8/6/2019 Chapter 9 - Group 2

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A Framework for Marketing Management A Framework for Marketing Management

Professor: Chen Cheng Hsui

Group 2: Chen Shi Qiong Zhuang (9924602)

Ruan Shi Yu Qing (9924614)

Ruan Bi Xian (9924608)

Li Wen Ping (9924620)



Chapter QuestionsChapter Questions

HowHow cancan aa firmfirm choosechoose andand communicatecommunicate anan effectiveeffective

positioning? positioning?

HowHow areare brands brands andand offeringsofferings differentiated?differentiated?

H

owH

ow cancan aa firmfirm identifyidentify itsits primary primary competitorscompetitors andandanalyzeanalyze their their strategies,strategies, objectives,objectives, strengths,strengths, andand

weaknesses?weaknesses?

HowHow cancan marketmarket leaders,leaders, challengers,challengers, followers,followers, andand

nichersnichers competecompete effectively?effectively?



DEVELOPING AND COMMUNIC ATING ADEVELOPING AND COMMUNIC ATING A

POSITIONING STRATEGYPOSITIONING STRATEGY

PositioningPositioning isis thethe actact of of designingdesigning thethe company¶scompany¶s

offeringoffering andand imageimage toto occupyoccupy aa distinctivedistinctive place place inin

thethe mindsminds of of thethe targettarget marketmarket..

TheThe resultresult of of positioning positioning isis thethe successfulsuccessful creationcreation of of

aa customer customer--focused focused valuevalue proposition proposition::

AA cogentcogent reasonreason whywhy thethe targettarget marketmarket shouldshould

buy buy thethe product product..



Table 9.1 Examples of Value PropositionsTable 9.1 Examples of Value Propositions

Demand States and Marketing TasksDemand States and Marketing Tasks



Competitive Frame of ReferenceCompetitive Frame of Reference

CategoryCategory membershipmembership ² ² thethe products products or or setssets of of

products products withwith whichwhich aa brand brand competescompetes andand whichwhich

functionfunction asas closeclose substitutessubstitutes..

ToTo determinedetermine thethe proper proper competitivecompetitive frameframe of of reference,reference,

marketersmarketers needneed toto understandunderstand consumer consumer behavior behavior andand

thethe considerationconsideration setssets consumersconsumers useuse inin makingmaking brand brand

choiceschoices..



ExampleExample

InIn thethe UnitedUnited Kingdom,Kingdom, thethe AutomobileAutomobile

AssociationAssociation hashas positioned positioned itself itself asas thethe fourthfourth

³emergency³emergency service´service´ ± ± alongalong withwith police, police, firefire andand

ambulanceambulance ± ± toto conveyconvey greater greater credibilitycredibility andandurgencyurgency..



PointsPoints--of of--Parity and PointsParity and Points--of Differenceof Difference

PointsPoints--of of--differencedifference

(PODs)(PODs)

AttributesAttributes or or benefits benefits

thatthat consumersconsumers stronglystronglyassociateassociate withwith aa brand, brand,

positively positively evaluate,evaluate, andand

believe believe theythey couldn¶tcouldn¶t

findfind toto thethe samesame extentextentwithwith aa competitivecompetitive

brand brand..

PointsPoints--of of--parity (POPs)parity (POPs)

AssociationsAssociations thatthat aren¶taren¶t

necessarilynecessarily uniqueunique toto thethe brand brand but but maymay inin factfact be be

sharedshared withwith other other brands brands..

CategoryCategory points points--of of--parity parity

CompetitiveCompetitive points points--of of-- parity parity



POPs and PODsPOPs and PODs

PODs (Points of Difference)PODs (Points of Difference)

Strong, favorable, unique brandStrong, favorable, unique brand

associationsassociations

May be any kind of attribute or benefitMay be any kind of attribute or benefit

Two types of PODsTwo types of PODs

Attribute BasedAttribute Based

Functional, performance related differencesFunctional, performance related differences

Image BasedImage Based Affective, experiential, brand image related differencesAffective, experiential, brand image related differences



POPs and PODsPOPs and PODs

POPPOP (Point(Point of of Parity)Parity)

AssociationsAssociations thatthat areare sharedshared withwith other other brands brands

TwoTwo typestypes

CategoryCategory:: attributesattributes thatthat areare requiredrequired toto includeincludeyour your product product asas aa member member of of thatthat categorycategory

CompetitiveCompetitive:: POPPOP thatthat negatenegate your your competitorscompetitorsPODsPODs

POPsPOPs cancan be be ³good³good enough´,enough´, but but PODsPODs shouldshould be be³superior´³superior´



Establishing Category MembershipEstablishing Category Membership

There are three main ways to convey aThere are three main ways to convey a

brand¶s category membership: brand¶s category membership:

Announcing category benefitsAnnouncing category benefits

Comparing to exemplarsComparing to exemplars

Relying on the product descriptor Relying on the product descriptor



Table 9.2 Key Criteria for PointsTable 9.2 Key Criteria for Points--of of--DifferenceDifference

Desirability CriteriaDesirability Criteria

RelevanceRelevance

DistinctivenessDistinctiveness

BelievabilityBelievability

Deliverability CriteriaDeliverability Criteria

FeasibilityFeasibility

CommunicabilityCommunicability

SustainabilitySustainability



POP AND POD: Cadillac over the yearsPOP AND POD: Cadillac over the years



DIFFERENTI ATION STRATEGIESDIFFERENTI ATION STRATEGIES

CompetitiveCompetitive advantageadvantage ² ² aa company¶scompany¶s

abilityability toto perform perform inin oneone or or moremore waysways thatthat

competitorscompetitors can¶tcan¶t or or won¶twon¶t matchmatch..

FewFew areare sustainable,sustainable, but but aa leveragableleveragable

advantageadvantage cancan be be usedused asas aa springboardspringboard toto newnew

advantagesadvantages..

FocusFocus onon building building competitivecompetitive advantagesadvantages asascustomer customer advantagesadvantages..



FormForm

FeaturesFeatures

CustomizationCustomization

Performance qualityPerformance quality

Conformance qualityConformance quality

DurabilityDurability

ReliabilityReliability

RepairabilityRepairability

StyleStyle

DesignDesign

Product DifferentiationProduct Differentiation



Ordering easeOrdering ease

DeliveryDelivery

InstallationInstallation

Customer trainingCustomer training

Customer consultingCustomer consulting

Maintenance and repair Maintenance and repair

ReturnsReturns

ServiceService DifferentiationDifferentiation



Other Dimensions of DifferentiationOther Dimensions of Differentiation

PersonnelPersonnel

ChannelChannel

ImageImage



Five Forces that DetermineFive Forces that Determine

Marketing AttractivenessMarketing Attractiveness



The threats these forces pose areThe threats these forces pose are



Identifying CompetitorsIdentifying Competitors

HavingHaving goodgood informationinformation aboutabout your your competitorscompetitors willwill::

ensureensure thatthat youyou havehave aa strongstrong position position inin thethe marketmarket..

alsoalso helphelp youyou toto remainremain flexibleflexible andand respondrespond quicklyquickly toto

changeschanges inin thethe marketmarket..

makemake suresure your your prices prices areare competitive,competitive, your your marketingmarketing

isis appropriate,appropriate, andand your your product product isis attractiveattractive..

ResearchingResearching whowho your your competitorscompetitors areare andand understandingunderstanding

thethe differencesdifferences between between their their wayway of of doingdoing business business andand

yoursyours willwill motivatemotivate youyou toto constantlyconstantly improveimprove

andand adjustadjust your your business business strategystrategy..



Identifying CompetitorsIdentifying Competitors

It would seem a simple task for a company to identify itsIt would seem a simple task for a company to identify its

competitors.competitors.

However, the range of a company¶s actual and potentialHowever, the range of a company¶s actual and potential

competitors can be much broader than the obvious.competitors can be much broader than the obvious.A company is more likely to be hurt by emerging competitorsA company is more likely to be hurt by emerging competitors

or new technologies than by current competitors.or new technologies than by current competitors.



Industry and Market Views of CompetitionIndustry and Market Views of Competition

IndustryIndustry ² ² a group of firms that offers a product or class of a group of firms that offers a product or class of

products that are close substitutes for each other. products that are close substitutes for each other.

Classified by:Classified by:

Number of sellers Number of sellers

Degree of product differentiationDegree of product differentiation

Presence or absence of entry, mobility, and exit barriersPresence or absence of entry, mobility, and exit barriers

Cost structureCost structure

Degree of vertical integrationDegree of vertical integration Degree of globalizationDegree of globalization



Key principles of Blue Ocean StrategyKey principles of Blue Ocean Strategy



AN ALYZING COMPETITORS AN ALYZING COMPETITORS

Main CompetitorsMain Competitors

ascertain

Strategies Objectives Strengths Weaknesses



StrategiesStrategies

A A strategic groupstrategic group is a group of firms followingis a group of firms following

the same strategy in a given target market.the same strategy in a given target market.



Figure 9.3 Strategic Group in the Major Figure 9.3 Strategic Group in the Major

Appliance Industry Appliance Industry



Competitor Strengths and WeaknessesCompetitor Strengths and Weaknesses

Share of mind

Share of heart

Share of market



Selecting CompetitorsSelecting Competitors

S trong vs. weak S trong vs. weak ² ² most companies aim at weak most companies aim at weak

competitors.competitors.

C lose vs. distant C lose vs. distant ² ² most companies compete withmost companies compete with

the rivals that resemble them the most.the rivals that resemble them the most. ³Good´ vs. ³bad´³Good´ vs. ³bad ́² ² good competitors play bygood competitors play by

industry rules, make realistic assumptions, setindustry rules, make realistic assumptions, set

reasonable prices, and favor a healthy industry.reasonable prices, and favor a healthy industry.



Competitive StrategiesCompetitive Strategies

Leader

Challenger

Nicher

Follower



MarketMarket--Leader StrategiesLeader Strategies

Expanding the total marketExpanding the total market

Defending market shareDefending market share

Expanding market shareExpanding market share



MarketMarket--Leader Strategy:Leader Strategy:

Expanding t

he Total Market

Expanding t

he Total Market

MarketMarket--penetration strategy: penetration strategy:

new users among buyers who might use thenew users among buyers who might use the

product but don¶t. product but don¶t. New New--market segment strategy:market segment strategy:

those who have never use the productthose who have never use the product

GeographicalGeographical--expansion strategy:expansion strategy:

those who live elsewherethose who live elsewhere




Defending Market ShareDefending Market Share

Position defensePosition defense

Flank defenseFlank defense

Preemptive defensePreemptive defenseCounteroffensive defenseCounteroffensive defense

Mobile defenseMobile defense

Contraction defenseContraction defense




Expanding Market ShareExpanding Market Share

Factors to consider before pursuing:Factors to consider before pursuing:

The possibility of provoking antitrust actionThe possibility of provoking antitrust action

Economic costEconomic cost

Pursuing the wrong marketing activitiesPursuing the wrong marketing activities

The effect of increased market share on actual andThe effect of increased market share on actual and

perceived quality perceived quality



Other Competitive StrategiesOther Competitive Strategies

MarketMarket--challenger strategieschallenger strategies

MarketMarket--follower strategiesfollower strategies

MarketMarket--nicher nicher strategiesstrategies



MarketMarket--Challenger StrategiesChallenger Strategies

Define the strategic objective and opponents.Define the strategic objective and opponents.

Decide who to attack:Decide who to attack:

Market leader Market leader

Market equals that are underperformingMarket equals that are underperforming

Small local and regional firmsSmall local and regional firms



Five attack strategiesFive attack strategies

Frontal attack Frontal attack

Flank attack Flank attack

Encirclement attack Encirclement attack

Bypass attack Bypass attack

Guerilla warfareGuerilla warfare



MarketMarket--Follower StrategiesFollower Strategies

Counterfeiter Counterfeiter

Cloner Cloner

Imitator Imitator Adapter Adapter



MarketMarket--nicher nicher strategiesstrategies

An alternative to being a follower in a larger An alternative to being a follower in a larger

market is to be a leader in a small market, or market is to be a leader in a small market, or

niche.niche.



Specialized Niche RolesSpecialized Niche Roles

EndEnd--user user

VerticalVertical--levellevel

Customer Customer--sizesize

SpecificSpecific--customer customer

GeographicalGeographical

Product or productProduct or product--lineline

ProductProduct--featurefeature

JobJob--shopshop

QualityQuality--price price

ServiceService

ChannelChannel



Balancing Customer and Competitor Balancing Customer and Competitor

OrientationsOrientations

CompetitorCompetitor--centeredcentered

companycompany

Looks at what competitorsLooks at what competitors

are doing and thenare doing and then

formulates competitiveformulates competitive

reactions.reactions.

CustomerCustomer--centeredcentered

companycompany

Focuses more onFocuses more on

customer developments incustomer developments in

formulating its strategies.formulating its strategies.



Questions?Questions?



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Chapter 9 - Group 2

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