Topic:- Developing & Communicating a Positioning Strategy All marketing Strategy is built on STP :Segmentation Targeting Positioning 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. 2. 3. 4. Product Differentiation Personnel Differentiation Channel Differentiation 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. 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 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 & Profits (rs) Sales Introduction Profit 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 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 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
