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SEVEN

Differentiation and
Brand Positioning

McGraw-Hill/Irwin

Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

What is Positioning?
o The place a product or brand
occupies in customers minds relative
to their needs
o Refers to competing products or
brands
o Comprises both competitive and
customer need considerations

7-2

Differentiation
o Differences in scopeBroad or
narrow competitive scope
o Different ways in which companies
can compete for target markets
oDifferentiation in Business Strategies
oDifferentiation among Goods and
Services

7-3

Physical and Perceptual Positioning

o Physical positioning
o Assessing product offering based on a
set of objective physical characteristics

o Perceptual positioning
o Includes product presentation, past
experiences and opinion of others

7-4

Exhibit 7.2

Comparison of Physical and Perceptual Positioning Analysis

Physical Positioning

Perceptual Positioning

Technical orientation

Consumer orientation

Physical characteristics

Perceptual attributes

Objective measures

Perceptual measures

Data readily available

Need for marketing research

Physical brand properties

Perceptual brand positions and

positioning intensities

Large number of dimensions

Limited number of dimensions

Represents impact of product

specs

Represents impact of product

specs and communication

Direct R&D implications

R&D implications need to be

interpreted
7-5

Kinds of Attributes
o Simple physically based attributes
o Directly related to a single physical dimension

o Complex physically based attributes

o Used by consumers to evaluate competitive
offerings

o Essentially abstract attributes

o Are influenced by physical characteristics, but not
related in any direct way

o Price
o Implies high or low quality
7-6

Exhibit 7.4 (1 of 2)

Steps in the Positioning Process

1. Identify relevant set of competitive
products serving a target market.

2. Identify the set of determinant attributes that define

the product space in which positions of current
offerings are located.

3. Collect information from a sample of

customers and potential customers about
perceptions of each product on the
determinant attributes.

7-7

Exhibit 7.4 (2 of 2)

Steps in the Positioning Process

4. Determine products current location
(positioning) in the product space and intensity
thereof.
5. Determine customers most preferred
combination of determinant attributes.
6. Examine the fit between preferences of market
segments and current position of product (market
positioning).
7. Write positioning statement or value proposition
to guide development and implementation of
marketing strategy.
7-8

Tools used to understand the positioning of products

o Positioning grid
o Also called perceptual maps

o Value curve

7-9

Perceptual Map of Womens Clothing Retailers in

Washington, D.C.
Washington 1990 Womens fashion market

Womens-wear fashionability
Conservative versus current versus very latest

The Limited
Neiman
Marcus
Saks

Macys
Bloomingdales

Nordstro
m

Hit or Miss
Dress Barn
Casual corner
Garfinkels

Sassafras

The Gap
L&T

Marshalls
Hecht
s

Britches
Kmart

T.J. Maxx

Sears
JC Penny

Loehmanns

Woodwar
d
&
Lothrop

Talbots

Worst value

Womens-wear value for the money

Best value

Source: Adapted from Douglas Tigert and Stephen Arnold, Nordstrom: How Good Are They? Babson College Retailing Research Reports,
September 1990. as shown in Michael Levy and Barton A. Weitz, Retailing Management (Burr Ridge, IL: Richard D. Irwin, 1992) p. 205.

7-10

Building a value curve

Value Curves for Nieman Marcus, J.C. Penney, Sears
100
90
80
70

O
L
60
Niem an Marcus

50

J.C. Penney
Sears

40

I
H 30
20
10
0
Service

Ambien ce

Category Depth

Fash ion ability

Valu e for Mon ey

7-11

Guiding Development of Marketing Strategy

o Two common approaches:
o Positioning statement
o Identifies the target market
o States unique benefits of the product

o Value proposition
o Similar to positioning statement
o Includes information about pricing relative to
competitors

o Both approaches reflect the unique selling

proposition (USP) of the product
7-12

Positioning Statement for Volvo in North America

o For upscale American families, Volvo is the
family automobile that offers maximum
safety
o Generic format for positioning statements:
For (target market), (brand) is the (product
category) that (benefit offered)

7-13

Value Proposition for Volvo in North America

o Target market: Upscale American families
o Benefits offered: Safety
o Relative price: 20% premium to domestic
family cars
o Generic format for value propositions:
o Target market
o Benefits offered (and sometimes not
offered)
o Relative price
7-14

Some Key Questions Concerning Positioning

Decisions

o For whom are they written?

o In what sort of language?
o Should they focus on features or
benefits?
o How many differentiating attributes
should anchor them?

7-15

A Useful Tool for Positioning Decision Making:

Perceptual Maps

Not Sweet

Sweet
Nutritious

Not Nutritious

Where would you plot your favorite cereals?

Your kids favorites? Your grandmas?
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The Outcome of Positioning: Brand Equity

o Brand equity is the term marketers
use to refer to the value created by
establishing customer preference for
ones brand.
o Brand equity must be managed to
retain and grow its value;

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