Marketing Management

Part : 04
Building Strong Chapter-10
Brands

Crafting the Brand Positioning

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MARKETING MANAGEMENT
12th edition

10
Crafting the Brand
Positioning

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Kotler Keller
 Chapter Questions

 How can a firm choose and communicate an effective positioning

in the market?
 How are brands differentiated?
 What marketing strategies are appropriate at each stage of the
product life cycle?
 What are the implications of market evolution for marketing
strategies?

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 Marketing Strategy

Segmentation

Targeting

Positioning

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 Positioning
 All marketing strategy is built on STP (Segmentation,
Targeting and Positioning). A company discovers different
needs and groups in the marketplace, targets those needs
and groups that it can satisfy in a superior way, and then
positions its offering so that the target market recognizes the
company‟s distinctive offering and image.

 Positioning is the act of designing the company‟s offering and

image to occupy a distinctive place in the mind of the target
market.

 The goal is to locate the brand in the minds of consumers to

maximize the potential benefit to the firm.

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 Positioning
 When positioning a product, the marketer wants to convey
the benefit(s) most desired by the target market.

 A classic example of successful positioning is the original

Head & Shoulders shampoo. As the first shampoo positioned
as a „dandruff‟ remedy, the product‟s name implied the
benefit, the medicinal fragrance suggested its potency, and
the colour (blue-green) and consistency (a paste rather than
a liquid) indicated that it was not an ordinary shampoo.

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 Positioning

Head & Shoulders

An example of successful Positioning

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 Positioning Strategy
 There are three steps in a Positioning Strategy.

1. Select the Positioning Concept

2. Design the dimension/feature that most effectively conveys

the position.

3. Coordinate the marketing mix components to convey a

consistent position.

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 Positioning Strategy
Step-01

1. Select the Positioning Concept : To position a

product/service, a marketer needs to first determine what is
important to the target market.

 Marketer can then conduct positioning studies to see how

members of a target market view competing products on the
important dimensions.

 The results of this research can be portrayed in a „Positioning

Map‟ or „Perceptual Map‟. (See Next Slide)

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 Positioning Strategy
Positioning/Perceptual Map for Tea

Traditional
Flavor

* Lipton
* Tapal
* Luzianne * Tetley

Iced Hot

* Lipton Flavored Teas

* Nestea

Unique
Flavor
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 Positioning Strategy
Step-02

2. Design the dimension/feature that most effectively

conveys the position : A position can be communicated
with a brand name, a slogan, the appearance or other
features of the product, the place it is sold, the appearance of
employees, and in many other ways.

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 Positioning Strategy
Step-03

3. Coordinate the marketing mix components to

convey a consistent position : Even though one or two
dimensions may be the primary position communicators, all
the elements of the marketing mix –product, price, place and
promotion-should complement the intended position.

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 Repositioning

 Many product failures are the result of inconsistent

positioning that confuses consumers. For example, Tetley
instant Iced Tea in Britain flopped because the British take
pride in brewing tea.

 Over time a position may erode because of lack of attention,

become less attractive to the market as needs or testes
change, or be usurped by a competitor; hence the positioned
must be regularly monitored and sometimes adjusted.

 The change in position of a product is called “Repositioning”.

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 Product Life-Cycle (PLC)
 PLC is a graphic representation of a product‟s sales history over
time. A company‟s positioning and differentiation strategy must
change as the product, market, and competitors change over the
Product Life Cycle (PLC).

 To say that a product has a life-cycle is to assert four things.

a. Products have a limited life.

b. Product sales pass through distinct stages.
c. Profits rise and fall at different stages of the product life cycle.
d. Products require different marketing, financial, manufacturing,
purchasing, and human resource strategies in each life cycle
stage.

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 Product Life Cycles (PLC) Patterns
 Most PLC curves are bell-shaped. This curve is typically
divided into 4 stages.
a. Introduction
b. Growth
c. Maturity
d. Decline
 Three common alternate patterns are
 Growth-Slump-Maturity Pattern (e.g. with home appliances)
 The Cycle-Recycle Pattern (e.g. with new drugs)
 Scalloped Pattern (e.g. with nylon when new uses are
discovered)

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 Product Life Cycle
Bell-Shaped Pattern

Sales

Time

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 Product Life Cycle
Growth-Slump-Maturity Pattern

Sales

Time

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 Product Life Cycle
Cycle-Recycle Pattern

Sales

Time

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 Product Life Cycle
Scalloped Pattern

Sales

Time

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 Style, Fashion, and Fad Life Cycles

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 Marketing Strategies
a. Introductory Stage
 Sales growth tends to be slow at this stage.

 Profits are negative or low in the introduction stage.

 Promotional expenditures are at their highest ratio to sales.

Product-Awareness Advertising is done.

 Companies that plan to introduce a new product must decide

when to enter the market . To be first can be rewarding, but
risky and expensive.

 Speeding up innovation time is essential in an age of

shortening product life cycles.

 Most studies indicate that the market pioneer gains the most
advantage.
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 Marketing Strategies
b. Growth Stage

 The growth stage is marked by a rapid climb in sales.

 Early adopters like the product, and additional consumers

start buying it.

 New competitors enter, attracted by the opportunities.



 Sales rise much faster than promotional expenditures, causing

a welcome decline in the promotion-sales ratio.

 Profits increase at this stage due to falling promotional and

manufacturing costs.

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 Marketing Strategies
b. Growth Stage
 During growth stage, the firm uses several strategies to
sustain rapid market growth.

 To sustain rapid market growth, firm improves product quality

and adds new product features and improved styling.

 It adds new models and flanker products.

 It enters new market segments.

 It increases distribution coverage.

 It lowers price to attract next layer of price-sensitive buyers.

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 Marketing Strategies
c. Maturity Stage
 At some point, the rate of sales growth will slow, and the product
will enter a stage of relative maturity.

 This stage normally lasts longer than the previous stages and
poses big challenges to marketing management.

 Maturity stages divides into three phases (growth, stable and

decaying maturity).

 The sales slowdown creates overcapacity in the industry, which

leads to intensified competition.

 They increase R&D budgets to develop product improvements and

line extensions.

 Some companies abandon weaker products and concentrate on

more profitable products and on new products.
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 Marketing Strategies
c. Maturity Stage
 During maturity stage, the firm can use several strategies to
expand the market of its mature brand.

 Market Modification (sales volume = no. of users x usage rate

per user, entering new market segments, winning
competitor‟s customers)

 Product Modification (Quality Improvements, Feature

Improvements)

 Marketing Program Modification (Like decisions on Price,

Sales Promotion, Personal Selling, Advertising etc.)

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 Marketing Strategies
d. Declining Stage
 Sales decline for a number of reasons including technological
advances, shifts in consumer tastes and increased domestic
and foreign competition.

 As sales and profits decline, some firms withdraw from the

market. Those remaining may reduce the number of products
they offer.

 Unless strong reasons for retention exist, carrying a weak

product is very costly to the firm.

 Some firms abandon declining markets earlier than others;

which depends upon the presence and height of exit barriers
in the industry.

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 Marketing Strategies
d. Declining Stage

The decline might be slow as in the case of sewing machines;

or rapid as in the case of 5.25 floppy disks.
Sales may plunge to zero, or they may petrify at a low level.

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 Marketing Strategies
d. Declining Stage
 According to a study of company strategies in declining
industries, the following strategies are available to the firm.

 Increasing the firm‟s investment.

 Maintaining the firm‟s investment level until the uncertainties
are resolved.
 Decreasing the investment selectively.
 Divesting the business quickly by disposing of its assets
advantageously.

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 The PLC Concept
Critique
 The PLC concept helps marketers interpret product and
market dynamics; it can be used for planning and control,
and as forecasting toll; however PLC theory has its share of
critics. They claim
i. Life-Cycle Patterns are too variable in shape and duration.
ii. Marketers can seldom tell what stage the product is in.
iii. PLC Pattern is the result of marketing strategies rather than
an inevitable course that sales must follow.

 Summary of PLC Characteristics, Objectives and Strategies

(See Table 10.3)

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 Market Evolution
Stages

Emergence Growth

Maturity Decline

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 Market Evolution
Stages
 The PLC yields only a product-oriented picture rather than a
market-oriented picture.
 Like products, markets evolve through four stages.
a. Emergence
b. Growth (If the new product sells well, new firms will enter the
market leading to market-growth stage)
c. Maturity (Eventually, the competitors cover and serve all the major
market segments and the market enters the maturity stage. In
fact, they go further and invade each others‟ segments reducing
everyone‟s profit in the process. As market growth slows sown, the
market splits into finer segments an high Market Fragmentation
occurs. The market fragmentation is often followed by a Market
Consolidation caused by the emergence of a new attribute that has
strong appeal) (The fragmentation is brought by competition, while
consolidation is brought by innovation)
d. Decline
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 Market Evolution
Maturity Strategies

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 Additional Resource
 For “Positioning Strategy”, please refer
“Marketing”, 12th Edition, By

Michael Etzel
Bruce Walker
William Stanton

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 Activity

 New Slogan/Logo of Walmart.

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