Positioning and Differentiating the Market Offering Through the Product Life Cycle

1. 11 Positioning and Differentiating the Market Offering Through the Product Life Cycle

2. Kotler on Marketing Watch the product life cycle; but more importantly, watch the market life cycle.

3. Chapter Objectives • In this chapter, we focus on the following questions: • How can the firm choose and communicate an effective positioning in the market? • What are the major differentiating attributes available to firms? • What marketing strategies are appropriate at each stage of the product life cycle? • What marketing strategies are appropriate at each stage of the market’s evolution?

4. Developing and Communicatinga Positioning Strategy • Positioning • Value position

5. Table 11.1: Examples of Value PropositionsDemand States and Marketing Tasks

6. Developing and Communicatinga Positioning Strategy • Positioning According to Ries and Trout • Strengthen own current position • Grab an unoccupied position • De-position • Re-position • Product ladders • Positioning According to Treacy & Wiersema • Value disciplines • Product leader • Operationally excellent firm • Customer intimate firm

7. Developing and Communicating a Positioning Strategy • Treacy and Wiersema propose that a business should follow four rules for success • Become best at one of the three value disciplines. • Achieve an adequate performance level in the other two disciplines. • Keep improving one’s superior position in the chosen discipline so as not to lose out to a competitor. • Keep becoming more adequate in the other two disciplines, because competitors keep raising customers’ expectations.

8. Developing and Communicatinga Positioning Strategy • Positioning: How many ideas to promote? • Unique selling proposition • Four major positioning errors • Underpositioning • Overpositioning • Confused positioning • Doubtful positioning

9. Figure 11.1: Perceptual Map

10. Developing and Communicatinga Positioning Strategy • Theme park’s positioning possibilities: • Attribute positioning • Benefit positioning • Use or application positioning • User positioning • Competitor positioning • Product category positioning • Quality or price positioning • Which Positioning to Promote?

11. Table 11.2: Method for Competitive-Advantage Selection See text for complete table

12. Developing and Communicatinga Positioning Strategy • Communicating the Company’s Positioning • Positioning statement Mountain Dew’s Web site supports its positioning

13. Adding Further Differentiation • Differentiation • Differentiation criteria: • Important • Distinctive • Superior • Preemptive • Affordable • Profitable

14. Adding Further Differentiation • Exceed customer expectations with a three-step process • Defining the customer value model • Building the customer value hierarchy • Basic • Expected • Desired • Unanticipated • Deciding on the customer value package

15. Table 11.3: Differentiation Variables See text for complete table

16. Differentiation Tools • Product Differentiation • Form • Features

17. Table 11.4: Measuring Customer Effectiveness Value

18. Differentiation Tools • Performance Quality • Conformance Quality • Durability • Reliability • Reparability • Style • Design: The Integrating Force • Services Differentiation • Ordering Ease

19. Differentiation Tools • Delivery • Quick response system • Installation • Customer Training • Customer Consulting • Maintenance and Repair HP’s online support page

20. Differentiation Tools • Miscellaneous Services • Personnel Differentiation • Competence • Courtesy • Creditability • Reliability • Responsiveness • Communication

21. Differentiation Tools • Channel Differentiation • Image Differentiation • Identity • Image • Symbols, Colors, Slogans, Special Attributes • Physical plant • Events and Sponsorship • Using Multiple Image-Building Techniques

22. Product Life-Cycle Marketing Strategies • To say that a product has a life cycle asserts four things • Products have a limited life. • Product sales pass through distance stages, each posing different challenges, opportunities, and problems to the seller. • Profits rise and fall at different stages of the product life cycle. • Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life-cycle stage.

23. Figure 11.3: Sales and Profit Life Cycles

24. Figure 11.4: Cost Product Life-Cycle Patterns Product Life-Cycle Marketing Strategies

25. Figure 11.5: Style, Fashion, and Fad Life Cycles Product Life-Cycle Marketing Strategies

26. Figure 11.6: Long-Range Product Market Expansion Strategy (P = Product; M = Market) Product Life-Cycle Marketing Strategies • Marketing Strategies: Introduction Stage • The Pioneer Advantage • Inventor • Product pioneer • Market pioneer

27. Figure 11.7: Stages of the Competitive Cycle Product Life-Cycle Marketing Strategies • The Competitive Cycle

28. Product Life-Cycle Marketing Strategies • Marketing Strategies: Growth Stage • Improve product quality and add new product features and improved styling • Add new models and flanker products • Enter new market segments • Increase distribution coverage and enter new distribution channels • Shift from product-awareness advertising to product-preference advertising • Lower prices to attract next layer of price-sensitive buyers

29. Product Life-Cycle Marketing Strategies • Marketing Strategies: Maturity Stage • Market Modification • Expand number of brand users by: • Converting nonusers • Entering new market segments • Winning competitors’ customers • Convince current users to increase usage by: • Using the product on more occasions • Using more of the product on each occasion • Using the product in new ways

30. Product Life-Cycle Marketing Strategies • Product modification • Quality improvement • Feature improvement • Marketing-Mix Modification • Prices • Distribution • Advertising • Sales promotion • Personal selling • Services

31. Product Life-Cycle Marketing Strategies • Marketing Strategies: Decline Stage • Increase firm’s investment (to dominate the market and strengthen its competitive position) • Maintain the firm’s investment level until the uncertainties about the industry are resolved. • Decrease the firm’s investment level selectively by dropping unprofitable customer groups, while simultaneously strengthening the firm’s investment in lucrative niches • Harvesting (“milking”) the firm’s investment to recover cash quickly • Divesting the business quickly by disposing of its assets as advantageously as possible.

32. Table 11.5: Summary of Product Life-Cycle Characteristics, Objectives, and Strategies See text for complete table