Marketing and Primary Benefit

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JOURNAL SUMMARY
“MAPPING YOUR COMPETITIVE POSITION”
(D’AVENI, 2007)

Most companies have to build fresh competitive advantages and destroy others’ advantages faster than they used to. As innovation pervades the value chain, they must migrate quickly from one competitive position to another, creating new ones, depreciating old ones and matching rivals’. The process is disorderly and unstable. Senior executives desperately need new tools to help them systematically analyze their own and other players’ competitive positions in hypercompetitive markets.

One way to do that is to track the relationship between prices and a product’s key benefit over time. However, it isn’t easy to come to grips with either benefit or prices. Most customers are unable to identify the features that determine the prices they are willing to pay for products or services. If customers don’t know what they’re paying for and managers don’t know what they’re changing for, it’s almost impossible for companies to identify their competitive positions.

Seven years ago, the author came up with a way companies could capture competitive positions graphically to serve as the basis for strategy discussions. Drawn by using simple statistical analysis, a price-benefit positioning map provides insights into the relationship between price and benefits and tracks how competitive positions change over time. By creating an accurate map of the competitive landscape, companies can also get everyone in the organization on the same page.

In its simplest form, a price-benefit positioning map shows the relationship between the primary benefit that a product provides to customers and the prices of all the products in a given market. Creating such a map involves three steps; define the market, choose the price and determine the primary benefit, and plot positions and draw the expected-price line.

To define the market, first we need to identify the consumer needs we wish to understand. We should cast a...
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