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Crafting the Brand Positioning

   

Added on  2021-05-25

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297As the success of DirecTV demonstrates, a company can reap the benefits of carving out a unique position in the market-place. Creating a compelling, well-differentiated brand position requires a keen understanding of consumer needs and wants, company capabilities, and competitive actions. It also requires disciplined but creative thinking. In this chapter, we outline a process by which marketers can uncover the most powerful brand positioning.No company can win if its products and services resemble every other product and offering. As part of the strategic brand management process, each offering must represent the right kinds of things in the minds of the target market. Consider how DirecTV has positioned itself.1Crafting the Brand Positioning10Launched a little more than two decades ago, DirecTV now has more than 32 million subscribers in the United States and Latin America. The direct-broadcast satellite service provider faces competition on a number of fronts: from classic cable companies (Comcast and TimeWarner Cable), from other direct broadcast satellite service providers (Dish), and from alternate ways to watch television digitally through downloads and streaming (Hulu, Netflix, and Amazon). The world’s leading provider of digital television entertainment services, DirecTV carries the slogan “Don’t Just Watch TV, DirecTV,” reflecting the unique po-sitioning it has crafted thanks to a combination of features not easily matched by any competitor. Three pillars of that positioning are captured by its claims to “state-of-the-art technology, unmatched programming, and industry leading customer service.” The company puts much emphasis on its comprehensive set of sports packages, its wide array of HD channels, and its broad broadcast platform that lets customers watch programming on their TVs at home and on their laptops, tablets, and cell phones. With its Genie service, users can record as many as five shows at once. In exaggerated fashion, its “Get Rid of Cable” TV ad campaign shows how customers who get mad at cable have their lives turn for the worse through a series of unfortunate events. DirecTV has made a strategic targeting shift to focus on “high quality” subscrib-ers: loyal customers who purchase premium services, pay their bills on time, and call less often to complain.Developing a Brand PositioningAll marketing strategy is built on segmentation, targeting, and positioning (STP). A company discovers differ-ent needs and groups of consumers in the marketplace, targets those it can satisfy in a superior way, and then positions its offerings so the target market recognizes its distinctive offerings and images. By building customer advantages, companies can deliver high customer value and satisfaction, which lead to high repeat purchases and ultimately to high company profitability.UnderstandInG PosItIonInG and ValUe ProPosItIonsPositioning is the act of designing a company’s offering and image to occupy a distinctive place in the minds of the target market.2The goal is to locate the brand in the minds of consumers to maximize the potential benefit to the firm. A good brand positioning helps guide marketing strategy by clarifying the brand’s essence, identifying the goals it helps the consumer achieve, and showing how it does so in a unique way. Everyone in the organiza-tion should understand the brand positioning and use it as context for making decisions.Kotler, Philip, and Kevin Lane Keller. Marketing Management, Global Edition, Pearson Education, Limited, 2015. ProQuest Ebook Central,http://ebookcentral.proquest.com/lib/nottingham/detail.action?docID=5185776.Created from nottingham on 2021-02-24 04:52:50.Copyright©2015.PearsonEducation,Limited.Allrightsreserved.

298PART 4 | Building STRong BRAndSA useful measure of the effectiveness of the organization’s positioning is the brand substitution test. If, in some marketing activity—an ad campaign, a viral video, a new product introduction—the brand were replaced by a competitive brand, then that marketing activity should not work as well in the marketplace. A well-positioned brand should be distinctive in its meaning and execution. If a sport or music sponsorship, for example, would work as well if it were for a leading competitor, then either the positioning is not sharply defined well enough or the sponsorship as executed does not tie closely enough to the brand positioning.A good positioning has one foot in the present and one in the future. It needs to be somewhat aspirational so the brand has room to grow and improve. Positioning on the basis of the current state of the market is not forward-looking enough, but at the same time, the positioning cannot be so removed from reality that it is essentially unob-tainable. The real trick is to strike just the right balance between what the brand is and what it could be.One result of positioning is the successful creation of a customer-focused value proposition, a cogent reason why the target market should buy a product or service. As introduced in Chapter 1, a value proposition captures the way a product or service’s key benefits provide value to customers by satisfying their needs. Table 10.1 shows how three companies—Hertz, Volvo, and Domino’s—have defined their value proposition through the years with their target customers.3Positioning requires that marketers define and communicate similarities and differences between their brand and its competitors. Specifically, deciding on a positioning requires: (1) choosing a frame of reference by identifying the target market and relevant competition, (2) identifying the optimal points-of-parity and points-of-difference brand associations given that frame of reference, and (3) creating a brand mantra summarizing the positioning and essence of the brand.Choosing a Competitive Frame of ReferenceThe competitive frame of reference defines which other brands a brand competes with and which should thus be the focus of competitive analysis. Decisions about the competitive frame of reference are closely linked to target market decisions. Deciding to target a certain type of consumer can define the nature of competition because cer-tain firms have decided to target that segment in the past (or plan to do so in the future) or because consumers in that segment may already look to certain products or brands in their purchase decisions.IdentIfyIng CompetItorsA good starting point in defining a competitive frame of reference for brand positioning is category membership—the products or sets of products with which a brand competes and that function as close substitutes. It would seem a simple task for a company to identify its competitors. PepsiCo knows Coca-Cola’s Dasani is a major bottled-water competitor for its Aquafina brand; Wells Fargo knows Bank of America is a major banking competitor; and Petsmart.com knows a major online retail competitor for pet food and supplies is Petco.com.The range of a company’s actual and potential competitors, however, can be much broader than the obvious. To enter new markets, a brand with growth intentions may need a broader or maybe even a more aspirational com-petitive frame. And it may be more likely to be hurt by emerging competitors or new technologies than by current competitors.The energy-bar market created by PowerBar ultimately fragmented into a variety of subcategories, including those directed at specific segments (such as Luna bars for women) and some possessing specific attributes (such table 10.1 Examples of Value PropositionsCompany and ProductTarget CustomersValue PropositionHertz (car rental)Busy professionalsFast, convenient way to rent the right type of a car at an airportVolvo (station wagon)Safety-conscious upscale familiesThe safest, most durable wagon in which your family can rideDomino’s (pizza)Convenience-minded pizza loversA delicious hot pizza, delivered promptly to your doorKotler, Philip, and Kevin Lane Keller. Marketing Management, Global Edition, Pearson Education, Limited, 2015. ProQuest Ebook Central,http://ebookcentral.proquest.com/lib/nottingham/detail.action?docID=5185776.Created from nottingham on 2021-02-24 04:52:50.Copyright©2015.PearsonEducation,Limited.Allrightsreserved.

CRAfTing The BRAnd PoSiTioning|chapter 10 299as the protein-laden Balance and the calorie-control bar Pria). Each represented a subcategory for which the original PowerBar may not be as relevant.4Firms should broaden their competitive frame to invoke more advantageous comparisons. Consider these examples:•IntheUnitedKingdom,theAutomobileAssociationpositioneditselfasthefourth“emergencyservice”—along with police, fire, and ambulance—to convey greater credibility and urgency.•TheInternationalFederationofPokerisattemptingtodownplaysomeofthegamblingimageofpokertoemphasizethesimilarityofthecardgametoother“mindsports”suchaschessandbridge.5•TheU.S.ArmedForceschangedthefocusofitsrecruitmentadvertisingfromthemilitaryaspatriotic duty to the military as a place to learn leadership skills—a much more rational than emotional pitch that better competes with private industry.6We can examine competition from both an industry and a market point of view.7An industryis a group of firms offering a product or class of products that are close substitutes for one another. Marketers classify industries according to several different factors, such as the number of sellers; degree of product differentiation; presence or absence of entry, mobility, and exit barriers; cost structure; degree of vertical integration; and degree of globalization.Usingthemarketapproach,wedefinecompetitors as companies that satisfy the same customer need.Forexample,acustomerwhobuysaword-processingsoftwarepackagereallywants“writingability”—a need that can also be satisfied by pencils, pens, or, in the past, typewriters. Marketers must overcome “marketing myopia” and stop defining competition in traditional category andindustry terms.8Coca-Cola, focused on its soft drink business, missed seeing the market for coffee bars and fresh-fruit-juice bars that eventually impinged on its soft-drink business.The market concept of competition reveals a broader set of actual and potential competitors than competition defined in just product category terms. Jeffrey Rayport and Bernard Jaworski suggest profiling a company’s direct and indirect competitors by mapping the buyer’s steps in ob-taining and using the product. This type of analysis highlights both the opportunities and the chal-lenges a company faces.9analyzIng CompetItorsChapter 2 described how to conduct a SWOT analysis that includes a competitive analysis. A company needs to gather information about each competitor’s real and perceived strengths and weaknesses.Table 10.2 shows the results of a company survey that asked customers to rate its three competitors, A, B, and C, on five attributes. Competitor A turns out to be well known and respected for producing high-quality products sold by a good sales force, but poor at providing product availability and technical assistance. Competitor B is good across the board and excellent in product availability and sales force. Competitor C rates poor to fair on most attributes. This result suggests that in its positioning, the company could attack Competitor A on product availability and technical assistance and Competitor C on almost anything, but it should not attack B, which has no glaring weaknesses. As part of this com-petitive analysis for positioning, the firm should also ascertain the strategies and objectives of its primary competitors.The U.S. Armed Forces is putting more emphasis on its opportunities for leadership and career development vs. patriotic appeals for serving.Source:©RGBVenturesLLCdbaSuperStock/AlamyThe International Federation of Poker is putting more emphasis on the intellectual rewards from playing poker vs. the thrill from gambling.Source:©BlendImages/AlamyKotler, Philip, and Kevin Lane Keller. Marketing Management, Global Edition, Pearson Education, Limited, 2015. ProQuest Ebook Central,http://ebookcentral.proquest.com/lib/nottingham/detail.action?docID=5185776.Created from nottingham on 2021-02-24 04:52:50.Copyright©2015.PearsonEducation,Limited.Allrightsreserved.

300PART 4 | Building STRong BRAndSOnce a company has identified its main competitors and their strategies, it must ask: What is each competitor seeking in the marketplace? What drives each competitor’s behavior? Many factors shape a competitor’s objec-tives, including size, history, current management, and financial situation. If the competitor is a division of a larger company, it’s important to know whether the parent company is running it for growth or for profits, or milking it.10Finally, based on all this analysis, marketers must formally define the competitive frame of reference to guide positioning. In stable markets where little short-term change is likely, it may be fairly easy to define one, two, or perhaps three key competitors. In dynamic categories where competition may exist or arise in a variety of different forms, multiple frames of reference may be present, as we discuss below.IdentIfYInG PotentIal PoInts-of-dIfference and PoInts-of-ParItYOnce marketers have fixed the competitive frame of reference for positioning by defining the customer target market and the nature of the competition, they can define the appropriate points-of-difference and points-of-parity associations.11poInts-of-dIfferenCePoints-of-difference (PODs) are attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand.Associations that make up points-of-difference can be based on virtually any type of attribute or benefit.12Louis Vuitton may seek a point-of-difference as having the most stylish handbags, Energizer as having the longest-lasting battery, and Fidelity Investments as offering the best financial advice and planning.Strong brands often have multiple points-of-difference. Some examples are Apple (design, ease-of-use, and irreverent attitude), Nike (performance, innovative technology, and winning), and Southwest Airlines (value, reliability, and fun personality).Creating strong, favorable, and unique associations is a real challenge, but an essential one for competitive brand positioning. Although successfully positioning a new product in a well-established market may seem par-ticularly difficult, Method Products shows that it is not impossible.13MethOd PrOductsThe brainchild of former high school buddies Eric Ryan and Adam Lowry, Method Products was started with the realization that although cleaning and household products are sizable categories by sales, taking up an entire supermarket aisle or more, they are also incredibly boring ones. Method launched a sleek, uncluttered dish soap container that also had a functional advantage—the bottle, shaped like a chess piece, was built to let soap flow out the bottom so users would never have to turn it upside down. This signature product, with its pleasant fragrance, was designed by award-winning industrial designer Karim Rashid. Sustainability also became part of the core of the brand, from sourcing and labor practices to material reduction and the use of nontoxic materials. By creating a line of unique eco-friendly, biodegradable household cleaning products with bright colors and sleek designs, Method grew to a $100 million company in revenues. A big break came with the placement of its product in Target, known for partnering with well-known designers to produce standout products at affordable table 10.2 Customers’ Ratings of Competitors on Key Success FactorsCustomer AwarenessProduct QualityProduct AvailabilityTechnical AssistanceSelling StaffCompetitor AEEPPGCompetitor BGGEGECompetitor CFPGFFNote: E = excellent, G = good, F = fair, P = poor.Kotler, Philip, and Kevin Lane Keller. Marketing Management, Global Edition, Pearson Education, Limited, 2015. ProQuest Ebook Central,http://ebookcentral.proquest.com/lib/nottingham/detail.action?docID=5185776.Created from nottingham on 2021-02-24 04:52:50.Copyright©2015.PearsonEducation,Limited.Allrightsreserved.

CRAfTing The BRAnd PoSiTioning|chapter 10 301prices. Because of its limited advertising budget, the company believes its attractive packaging and innovative products must work harder to express the brand positioning. Social media campaigns have been able to put some teeth into the company’s “People Against Dirty” slogan and its desire to make full disclosure of ingredients an industry requirement. Method was acquired by Belgium-based Ecover in 2012; its strong European distribution network will help launch the brand overseas.Three criteria determine whether a brand association can truly function as a point-of-difference: desirability, deliverability, and differentiability. Some key considerations follow.•Desirable to consumer. Consumers must see the brand association as personally relevant to them. Select Comfort made a splash in the mattress industry with its Sleep Number beds, which allow consumers to adjust the support and fit of the mattress for optimal comfort with a simple numbering index. Consumers must also be given a compelling reason to believe and an understandable rationale for why the brand can deliver the desired benefit. Mountain Dew may argue that it is more energizing than other soft drinks and support this claim by noting that it has a higher level of caffeine. Chanel No. 5 perfume may claim to be the quintessen-tially elegant French perfume and support this claim by noting the long association between Chanel and haute couture. Substantiators can also come in the form of patented, branded ingredients, such as NIVEA Wrinkle Control Crème with Q10 co-enzyme.•Deliverable by the company. The company must have the internal resources and commitment to feasibly and profitably create and maintain the brand association in the minds of consumers. The product design and marketing offering must support the desired association. Does communicating the desired association require real changes to the product itself or just perceptual shifts in the way the consumer thinks of the product or brand? Creating the latter is typically easier. General Motors has had to work to overcome pub-lic perceptions that Cadillac is not a youthful, modern brand and has done so through bold designs, solid craftsmanship, and active, contemporary images.14The ideal brand association is preemptive, defensible, and difficult to attack. It is generally easier for market leaders such as ADM, Visa, and SAP to sustain their positioning, based as it is on demonstrable product or service performance, than it is for market leaders such as Fendi, Prada, and Hermès, whose positioning is based on fashion and is thus subject to the whims of a more fickle market.•Differentiating from competitors. Finally, consumers must see the brand association as distinctive and superior to relevant competitors. Splenda sugar substitute overtook Equal and Sweet’N Low to become the leader in its category in 2003 by differentiating itself as a product derived from sugar without the associated Method cleaning products has met with great success from being uniquely positioned on the basis of sustainability and attractive and functional product designs.Source:MethodProducts,PBCKotler, Philip, and Kevin Lane Keller. Marketing Management, Global Edition, Pearson Education, Limited, 2015. ProQuest Ebook Central,http://ebookcentral.proquest.com/lib/nottingham/detail.action?docID=5185776.Created from nottingham on 2021-02-24 04:52:50.Copyright©2015.PearsonEducation,Limited.Allrightsreserved.

302PART 4 | Building STRong BRAndSdrawbacks.15In the crowded energy drink category, Monster has become a nearly $2 billion brand and a threat to category pioneer Red Bull by differentiating itself on its innovative 16-ounce can and an extensive line of products targeting nearly every need state related to energy consumption.16poInts-of-parItyPoints-of-parity (POPs), on the other hand, are attribute or benefit associations that are not necessarily unique to the brand but may in fact be shared with other brands.17These types of associations come in three basic forms: category, correlational, and competitive.Category points-of-parity are attributes or benefits that consumers view as essential to a legitimate and credible offering within a certain product or service category. In other words, they represent necessary—but not sufficient—conditions for brand choice. Consumers might not consider a travel agency truly a travel agency unless it is able to make air and hotel reservations, provide advice about leisure packages, and offer various ticket payment and delivery options. Category points-of-parity may change over time due to technological advances, legal developments, or con-sumertrends,buttouseagolfinganalogy,theyarethe“greensfees”necessarytoplaythemarketinggame.Correlational points-of-parity are potentially negative associations that arise from the existence of positive associa-tions for the brand. One challenge for marketers is that many attributes or benefits that make up their POPs or PODs are inversely related. In other words, if your brand is good at one thing, such as being inexpensive, consumers can’t see itasalsogoodatsomethingelse,likebeing“ofthehighestquality.”Consumerresearchintothetrade-offsconsumersmake in their purchasing decisions can be informative here. Below, we consider strategies to address these trade-offs.Competitive points-of-parity are associations designed to overcome perceived weaknesses of the brand in light of competitors’ points-of-difference. One good way to uncover key competitive points-of-parity is to role-play competitors’ positioning and infer their intended points-of-difference. Competitor’s PODs will, in turn, suggest the brand’s POPs.Regardless of the source of perceived weaknesses, if, in the eyes of consumers, a brand can “break even”in those areas where it appears to be at a disadvantage and achieve advantages in other areas, the brand should be in a strong—and perhaps unbeatable—competitive position. Consider the introduction of Hyundai Motor Company—thebiggestcarmakerinSouthKoreaandoneofthetoptenglobalautocompanies.18hyundai carsIn recent years, Hyundai Motor Company has succeeded in boosting its presence in the world car market by setting up overseas production bases and engaging in aggressive marketing. As South Korea’s larg-est and the world’s fifth largest automaker, Hyundai has driven its sales growth through improvements in quality and design. While its rivals are using reliability and fuel economy to build market share, Hyundai has taken the formula further with a focus on making its cars more attractive and often at lower prices. The brand’s goal is to entice customers with the speed and appeal of luxury European models, but at non-premium prices. To win the hearts of car buyers, Hyundai engages cred-ible and attractive spokespersons, like Bollywood actor Shah Rukh Khan and German football celebrity Jürgen Klinsmann, to help communicate its value proposition. To improve its overall brand perception, the company has a long-term commitment with FIFA to sponsor the FIFA World Cup until 2022.poInts-of-parIty Versus poInts-of-dIfferenCeFor an offering to achieve a point-of-parity on a particular attribute or benefit, a sufficient number of consumers must believe the brand is “good enough”on that dimension. There is a zone or range of tolerance or acceptance with points-of-parity. The brand does not literally need to be seen as equal to competitors, but consumers must feel it does well enough on that particular Hyundai Motor Company has pioneered the car market by successfully establishing a point-of-difference on low prices and a point-of-parity on quality and design.Source:GustavoFadel/ShutterstockKotler, Philip, and Kevin Lane Keller. Marketing Management, Global Edition, Pearson Education, Limited, 2015. ProQuest Ebook Central,http://ebookcentral.proquest.com/lib/nottingham/detail.action?docID=5185776.Created from nottingham on 2021-02-24 04:52:50.Copyright©2015.PearsonEducation,Limited.Allrightsreserved.

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