After reading this chapter, students should:
❑ Know how a firm can choose and communicate an effective positioning in the market
❑ Know how brands are differentiated
❑ Know what marketing strategies are appropriate at each stage of the product life-cycle
❑ Know what he implications are of market evolution for marketing strategies
Deciding on positioning requires determining a frame of reference by identifying the target market and the nature of the competition and the ideal points-of-parity, and points-of-difference brand associations. Determining the proper competitive frame of reference depends on understanding consumer behavior and the considerations consumers use in making brand choices.
Points-of-difference are those associations unique to the brand that are also strongly held and favorably evaluated by consumers. Points-of-parity are those associations not necessarily unique to the brand but perhaps shared with other brands. Category point-of-parity associations are associations’ consumers view as being necessary to a legitimate and credible product offering within a certain category. Competitive point-of-parity associations are those associations designed to negate competitors’ point-of-difference.
The key to competitive advantage is product differentiation. A market offering can be differentiated along five dimensions: product (form, features, performance quality, conformance quality, durability, reliability, reparability, style, design); services (order ease, delivery, installations, customer training, customer consulting, maintenance and repair, miscellaneous services); personnel, channel, or image (symbols, media, atmosphere, and events).
Because economic conditions change and competitive activity varies, companies normally find it necessary to reformulate their marketing strategy several times during a product’s life cycle. Technologies, product forms, and brands also exhibit life cycles with distinct stages. The general sequence of stages in any life cycle is introduction, growth, maturity, and decline. The majority of products today are in the maturity stage.
Each stage of the product life cycle calls for different marketing strategies. The introduction stage is marked by slow growth and minimal profits. If successful, the product enters a growth stage marketed by rapid sales growth and increasing profits. Then it follows a maturity stage in which sales growth slows and profits stabilize. Finally, the product enters a decline stage. The company’s task is to identify the truly weak products; develop a strategy for each one: and phase out weak products in a way that minimizes the hardship to company profits, employees, and customers.
Like products, markets evolve through four stages: emergence, growth, maturity, and decline.
A barrier to effective learning that can be experienced by students in this chapter comes from the concept of “positioning.” Students will be familiar with different products or services, but having them realize what the products and services “position’s are” within their frame of references is challenging to verbalize. The instructor is encouraged to use a number of examples of products or services familiar to the students to get this concept fully across.
Secondly, the understanding of the terms point-of–differences (PODs) and points-of-parity (POPs) can easily be confused. The instructor is encouraged to use a number of similar products (computers, cell phones, pens, PDAs for example) and ask the students to differentiate these products in terms of the product’s POPs and PODs; and why these concepts are so important to the marketing of products.
The third challenge presented in this chapter is an understanding that products and markets have a life cycle and undergo changes throughout that process. Again, the use of product or service examples familiar to the students is...
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